In 2008, an owner in a 2000 single-family home association in Illinois was driving through the community at 34 miles per hour. The posted speed limit was twenty-five miles per hour. The HOA's private security officer pulled the owner over with flashing lights and issued him a fine. The Rules also provided that if the owner had not pulled over, he could have been fined an additional two hundred dollars. The owner fought back and challenged the stop in a lawsuit that ultimately made it to the Illinois Supreme Court. The Illinois Supreme Court held that the Association had the right to pass rules allowing for security personnel to stop owners, to use radar guns and flashing lights on vehicles, and to issue fines for exceeding speed limits. The Court's opinion can be viewed here.
The latest in a never-ending stream of HOA embezzlement stories involves a management company accounts payable employee stealing $180,000 in condominium association funds. For over four years (2009-2013), the employee wrote checks to herself and cashed them at banks and stores. This story, along with all of the others we hear about, highlights the need for vigilance in reviewing financial statements for managers as well as board members. Serious consideration should be given to requiring board members to sign checks and for regular audits or reviews. Finally, it is always important to review the crime/dishonesty insurance policy and any fidelity bonds of any management company retained by the association. Morris Sperry is preparing training specifically on this topic and will be making that training available to board members and managers in the fall of 2013.
Everyone at Morris Sperry took a break Friday for some great fun at Lagoon. It was a well-deserved retreat and the weather and day could not have been better.
In a very aggressive action, a Florida Condominium Association has prevailed in collecting $98,000 in assessments, late fees, and collection costs (in addition to attorney fees), from Federal National Mortgage Association (FNMA) after a bank foreclosure. The case is now on appeal and could take a year or more to get finally resolved. Look to Morris Sperry for cutting edge community association law news and services.
By demonstrating competence and skill in the service of our clients, Sydney Allen has been advanced to a legal assistant position at Morris Sperry. She has demonstrated reliability, dedication, and a strong intellect and we intend to fully utilize those capabilities to efficiently and promptly serve our clients. Morris Sperry congratulates Sydney on this quick advancement and looks forward to challenging her in her new position.
The attorneys and staff of Morris Sperry had a wonderful time hosting our guests at the Morris Sperry open house. Thank you so much to all who attended and made the evening enjoyable. Many family members, clients and friends attended and were treated to great hor d'oeuvres and service from the Blended Table. Thank you again to all who attended and we hope you had as much fun as we did.
The Federal Housing Administration (FHA) recently decided that a common provision in condominium declarations violates Section 513 of the National Housing Act. It is, therefore, refusing to provide FHA approval to condominium associations with this provision. Declarations commonly restrict short term occupancy (hotel and transient occupancy) of less than 30 days. Occasionally, you will also have an exception to this provision for lenders who take title through foreclosure. The FHA has targeted the lender exception and decided it violates Section 513. No condominium association with this exception will get or remain FHA approved and the FHA has flatly taken the position that any such exception must be amended out of the declaration to get or retain FHA approval. According to the Community Association Institute (CAI), associations around the country are being denied FHA approval based on this decision. CAI continues to lobby nationally to try to resolve this problem without amendments to declarations, but the FHA decision stands for now. If your condominium association wants become or remain FHA approved, Morris Sperry can quickly determine whether you have this provision and if you do, prepare an amendment allowing your condominium association to remain FHA approved. According to CAI, FHA has no intention of taking away FHA approvals already granted, but will strictly apply this decision in any future renewal or first-time application.
In a very interactive session, several managers from Advanced Community Services participated in training with the attorneys at Morris Sperry. As usual, the lively discussion was helpful for everyone involved and reflects both ACS's and Morris Sperry's dedication to quality HOA management through intensive training. Anyone looking for a good HOA manager or a good HOA lawyer should start by looking at those people who dedicate serious time to sharpening their skills and expanding their knowledge. Morris Sperry and the managers they provide training to demonstrate that commitment.
Several managers and assistant managers from FCS Community Services were treated to two hours of training on community association rules by the attorneys at Morris Sperry. The interaction and discussion was helpful for everyone. A second session is planned in the future to discuss in further detail various issues that arise in the drafting and interpretation of rules.
In December, 2012, a lawsuit was brought against a Condominium Association and client of Morris Sperry. The plaintiff claimed over $700,000 in damages. The Morris Sperry team, working aggressively in defense of the lawsuit, prevailed on summary judgment in a hearing before Judge Andrew Stone on May 6, 2013. The judge ruled in favor of Morris Sperry's client based on theories advocated and advanced in a cross-motion for summary judgment brought early in the case. This brought a prompt end to a lawsuit brought against a Morris Sperry client.