Tips for Navigating a Condo Association Insurance Casualty

Sometimes bad things happen when you’re a homeowner.  Scary things like hail, fire, tornados, acts of God – the long list of dangers you see in your homeowner’s insurance.  When something bad happens, the good news is that you probably have some form of insurance! The bad news is that if it’s a Condo Association insurance casualty, things are not as straightforward as they would be in a single family home.  These tips will help you navigate a challenging issue.

Immediately Get Your Insurance Involved

Your first reaction: Where’s my unit? Your first action: call your insurance.

Condo Association insurance casualties get complicated quickly.  Depending on the cause of the casualty, the state you live in, and the coverage of your Condo master insurance policy and your own policy, there can be multiple outcomes.  Remember, your Condo Association Board has a fiduciary duty to the Association – not to you. You need to get your own insurance involved ASAP. Your insurance won’t want to pay a dime more than they have to, and they can fight it out with your Condo Association more effectively than you can.  Make sure to get them involved quickly.

Be Patient

There are multiple factors that can lead to a Condo Association insurance casualty taking a long time to resolve.  First, the Condo’s insurance must complete an investigation. Upon completion, the findings will be provided to you.  If it was a large incident – think hurricane damage or a big fire – it could take some time. Next, the Condo needs to get a repair company on contract.  This can take some time. Finally, you need to coordinate the Condo’s activities with your own insurance. Even more time.

It sucks, but don’t expect immediate gratification.  Resolving a Condo Association insurance casualty is not a fast process.

Look Out for Yourself

Your best ally is yourself. Take nothing for granted.

During a Condo Association insurance casualty, all parties are going to be looking out for themselves.  Insurance will want to pay as little as possible. The Condo Association will be protecting its own finances.  If the incident is large, your Management will have to deal with many units.

Make sure you’re looking out for yourself and following up with everyone you need to constantly.  Take nothing for granted. Ask Management, the Board, and your insurance company for regular updates.  Don’t assume silence is a good thing. Don’t be rude or obnoxious, but do check in weekly or as is appropriate.

Condo Association Insurance Casualty Issues are Challenging

Dealing with casualty issues is a challenge.  Your home is damaged or destroyed, along with your personal belongings.  In and of itself, this is an extremely upsetting and disruptive event. Your top priority is going to be getting things back to normal.  Make sure you set realistic expectations and stay politely persistent, and you’ll navigate a tough situation and lead a better Condo life.

Is California’s Expensive Housing Scaring Away Job Seekers?

Recruiter Matt Stone calls job seekers from his desk at the Hollywood office of Proven Recruiting, May 1, 2018. (David Wagner/KPCC)

Plenty of workers still move West each year for a new job in California. But the state’s high cost of housing may be deterring many other job seekers from moving into the state.

Business leaders up and down the state say California’s expensive housing makes it challenging to recruit new workers — and to keep existing employees here.

“You’re competing, now, with a low unemployment rate in California, and people have options,” said Mary Leslie, president of the Los Angeles Business Council. In April, the state’s unemployment rate hit a record low of 4.2 percent.

“If we don’t have the affordable housing, we’re not as competitive,” Leslie said.

Job recruiters see California’s housing crisis from both sides. They work with employers feeling pressure to raise wages, and they talk with job seekers scared off by median home prices that top $1 million in parts of the Bay Area, and over $500,000 in Los Angeles and San Diego counties.

But Matt Stone, a Los Angeles recruiter with Proven Recruiting, said plenty of workers are still drawn to sunny California.

“Living near the beach, having that active lifestyle, being able to see the Hollywood stars every once in a while,” Stone said. “Those are the reasons for the people who aren’t from here.”

And he should know. Stone is a transplant himself, moving from upstate New York in 2016. He’s able to walk job seekers through the perks of taking a new job in California, and guide them away from the neighborhoods that could lock them into a terrible commute.

During a call with a certified public accountant in North Carolina, Stone asked, “Have you been out to L.A. before?”

“I have,” said the candidate, who we’re not naming to protect his job with his current employer. “There’s always downsides to everywhere that you go. And I know that there, it’s the crowds and traffic,” he said.

And, of course, California’s sky-high housing costs. The median price of a California home — now $538,640, according to the California Association of Realtors — is more than double the national median home price.

The kind of financial workers Stone recruits could always find work in a less expensive part of the country. They do get a pay bump in California, but their annual salary alone is often not enough to afford a house in urban, coastal Southern California.

“A hundred thousand dollars here isn’t going to go nearly as far as in Kansas or Missouri or any of those states,” Stone said.

It currently takes an annual household income of $112,930 to afford a median-priced Los Angeles home, according to a recent report from the California Association of Realtors. Homes in other parts of the state are significantly cheaper — like the Inland Empire east of Los Angeles — but in San Francisco, homebuyers need to earn as much as $333,270 to keep up with median monthly home payments.

When a candidate does get an offer, Stone sometimes goes outside his job description to help them complete the move. One worker he successfully recruited from the Washington, D.C., area didn’t have much time to find a place to live. So Stone scouted apartments for him.

Stone said he toured the apartments using his phone’s Facetime app, “just letting him know a little bit about the areas the apartment was in as well.”

Even in today’s tight labor market, Proven recruiters said they still find plenty of job seekers living in California who are open to new opportunities.

But recruiting people from out of state is more difficult. In recent years, only 7 percent of Proven’s California placements have been filled with people from out of state. Ingram Losner, the firm’s co-founder, said that number was lower than he expected.

“When you look at it on paper, and you see the cost differential between living in California and living outside of California, you can’t live on the promise of a dream,” Losner said. “And that’s clearly where people decide to remove themselves from the process.”

It’s not just Proven Recruiting having a tough time luring people to California.

In a 2016 Silicon Valley Leadership Group survey, local CEOs said the area’s high cost of housing was their number one business challenge.

It’s something a lot of employers in Southern California struggle with, too. A 2017 University of Southern California survey found that housing costs were concerning to 75 percent of large employers in Los Angeles.

The survey also asked if companies were losing workers due to unaffordable housing. Some weren’t sure, but among those who did answer, 70 percent said yes.

USC public policy professor Raphael Bostic said if housing costs continue to push certain workers out of state, California’s economic growth could be affected.

“If the pressures continue, do they just say this California isn’t the California I thought it was?” Bostic asked. “I don’t think it’s in California’s interest to have more and more people facing that choice.”

The possibility of losing workers has even led some employers, like the Los Angeles Unified School District, to develop housing for certain workers who may not have any other affordable options nearby.

Meanwhile, San Francisco has for years discussed the possibility of building teacher housing within the city, and in April announced the selection of an affordable housing developer to carry out the project.

Tech giants like Google and Facebook also have plans to create new housing near their Bay Area headquarters in the coming years.

Surveys have found some evidence that employers are taking cost of living into account when negotiating hiring packages to lure top-level workers to California. But lower-wage workers are not getting as much help to offset rising rents. If these trends continue, the future could hold more inequality and stagnant growth, said USC professor Gary Painter.

“The kind of economy that California might grow into is one where there’s a few people earning a lot, and then a bunch of lower-wage workers,” said Painter. “And that has never been a recipe for long-term quality of life and economic growth in the United States.”

After Housing Bill’s Defeat, Scott Wiener Vows to Keep Pushing

At 6-foot-7, first-term state Sen. Scott Wiener (D-San Francisco) certainly stands out in a crowd, though he often comes off as reserved and soft-spoken. But he’s the first to say people shouldn’t be fooled by his quiet disposition.

“I think at times people underestimate my passion because I am mellow in my demeanor,” he said. “I don’t raise my voice, I don’t yell at people, I don’t bounce off the walls. ”

Still, the former San Francisco supervisor has been making a name for himself in the state Capitol, taking on high-profile issues and sparking fierce policy debates.

For instance, Wiener started a statewide conversation this year when he introduced Senate Bill 827. It would have pushed more high-density housing developments near transit stops. The bill generated fierce opposition from local governments and even some housing advocates.

Dean Preston, with the group Tenants Together,said Wiener failed to consult with communities that would have been affected by the bill.

“Sen. Wiener has some strong ideas about what the housing landscape would look like,” Preston said. “But he appears to be completely unconcerned with displacement and gentrification in our urban areas in California.”

Other critics have said Wiener moved too fast on a proposal that would have radically altered California’s housing landscape.

The measure was ultimately defeated in its first committee hearing, with several Democrats voting against it. But Wiener makes no apologies for coming out aggressively on housing.

“You have to be willing to challenge the status quo,” Wiener said, “and the status quo in California is badly damaging our state.”

He points to the more than 2,000 homeless San Francisco Unified school students and an estimated 15,000 unaccompanied kids who live on California’s streets.

“That really makes me mad,” he said. “It makes me mad that California has decided that views and parking are more important than children having a home to live in.”

In the race for governor, Wiener has endorsed Lt. Gov. Gavin Newsom. But he gives credit to both Newsom and former Los Angeles Mayor Antonio Villaraigosa for their plans to build 3.5 million homes if they are elected. Still, Wiener says those should be in high-density developments, not just single-family lots.

“We have to get at low-density zoning in our job centers near transit,” Wiener said. “That’s a hard conversation because for those of us who are lucky enough to live in these areas, it’s tempting to say I don’t want more people here.”

Wiener plans to try putting his bill forward again. But he knows there will always be people who oppose it.

Friend and fellow San Francisco representative, Assemblyman David Chiu (D-San Francisco), said Wiener will likely be ready for the battle.

“The Scott Wiener I know is a fighter,” Chiu said. “He’s willing to push the envelope, but also knows how to negotiate and mediate and figure out how to strike the deal when it needs to be struck.”

Wiener said he needs to act fast on his priorities. He points out he’s limited to 12 years in the Senate, and he has a lot he wants to take on.

“We really do have a poverty problem, which is driven in part by our housing crisis,” he said. “These things are all real. And if you’re not willing to break glass and sometimes shake people to say we need to do something about this, then you’re not going to get it done.”

He said there’s a lot of pressure to nibble around the edges with housing. But he said now is the time for California to fundamentally change how it approaches the issue.

What $500,000 Buys You Around California – and How It Shapes Where We Move

San Jose Realtor Holly Barr sold this burned-out home for more than $900,000.San Jose Realtor Holly Barr sold this burned-out home for more than $900,000. (Matt Levin/CALmatters)Technically, California has seen higher prices before. During the housing boom of the mid 2000s, the median statewide price nearly broke the $600,000 barrier (and that’s without adjusting for inflation). Many parts of California are still cheaper now than they were a decade ago.But Silicon Valley is not one of those places.The median price of a single family home in Santa Clara County — home of Apple and Google — hit $1.4 million in March of this year, according to data from the California Association of Realtors. That’s an all-time high.The region’s housing market has transformed any piece of available land into a veritable gold mine. No matter what sits on top of it.Real estate agent Holly Barr says she’s never had a listing generate as much attention as the one on Bird Avenue in the San Jose neighborhood of Willow Glen. The house caught fire two years ago during a remodeling job. What was left was a burned-out husk of a California bungalow sitting on 5,800 square feet of land.When Barr put the property on the market in April for $800,000, the listing made international headlines. It sold for over $900,000 — in less than a week. The burned down house will be razed and a new property will be built there that will likely sell for far more.“I wasn’t surprised,” said Barr. “It’s not about the house, it’s about the land and location.”It’s also not a surprise that with unliveable wrecks selling for that much, residents are starting to look for other places to live.According to data from the California Department of Finance, Santa Clara County lost 17,000 more residents to other parts of the state or country than they gained last year. That’s the second biggest net domestic migration loss of any county in the state.Los Angeles: A Fixer-Upper, or a House Smaller Than Your Expectations

A fixer-upper east of downtown Los Angeles is on the market for more than $500,000. (Courtesy of Jenn Cahill)Los Angeles County saw the largest drop in net domestic migration, losing 58,000 more residents than it brought in. The region tops the list partly because it’s simply so huge. More than 10 million people call it home, which means any population shift in L.A. County is likely to dwarf other parts of California.But the rising cost of housing is also playing a role. The county’s median home price broke the $600,000 barrier late last year. In a region famous for sprawl, prices are getting prohibitively expensive in and around L.A.’s downtown core.Los Angeles real estate agent Jenn Cahill specializes in neighborhoods east of downtown Los Angeles like Boyle Heights. She says she gets approached by young families with budgets of $500,000 all the time. Which means a lot of her role is adjusting expectations.“You walk into a bedroom, and they immediately think it’s a closet,” says Cahill. “And you’re like, no, no ,no, it’s a bedroom, with a little shoebox closet in the corner.”Cahill says options are limited if you want to stay relatively close to downtown — you could find a fixer-upper closer to your job, or you could choose to go farther out and commute.A recent study found that Southern California commutes were the most stressful in the country.Sacramento: A Large Suburban Home That’s Luring More and More CaliforniansA house in the Elk Grove suburb of Sacramento priced at nearly $500,000.

A house in the Elk Grove suburb of Sacramento priced at nearly $500,000. (Courtesy Veronica Nelson)Where are housing refugees from the Bay Area and Los Angeles going? Many are heading to the Sacramento area, where $500,000 still gets you pretty nice digs.Sacramento saw the largest population growth of any major city in California last year, breaking 500,000 residents for the first time. Where did they come from? Topping the list were L.A. and Santa Clara counties.Why? A five-bed, three-bath home in Elk Grove, an affluent Sacramento suburb, goes for $490,000. Realtor Veronica Nelson specializes in showing what middle class Bay Area families can get 90 miles East.“I’ve had teachers, Kaiser employees. They commute [to the Bay],” says Nelson. “Spend a night or two with a relative in the Bay Area, and make the best of it.”Nelson says she often talks with other Sacramento real estate agents about the influx of residents from costlier parts of the state. She worries that Sacramento is becoming unaffordable to Sacramentans — and knows some clients that are pushing even farther East.Reno, Nevada: A Big Home, But Maybe Not as Big as You ThinkA five bed, three bath house in Reno is listed at $498,000. “

Delinquency and the HOA

The timely collection of fees and assessments is the lifeblood of any HOA, condominium association, co-operative, or timeshare. However, unit owners are not always able to pay their fees and assessments on time. Depending on the state you live in and the penalties for late payments ascribed in the governing documents, delinquency is handled in one a few different methods. This article describes some of the best practices common interest community associations can use to keep their delinquencies to a minimum and their collection efforts on track to keep the revenue flowing while the delinquency is remedied.

Most HOAs have rules about when payments are late and what steps the association should take to collect delinquent funds. Consult with your association’s governance documents to see how delinquencies are handled at your HOA. If the documents are silent or the penalties are not strong enough to encourage compliance, it may be time for new rules and a document revision to help ensure that there are adequate penalties and remedies in place for late payments. Generally speaking, a fine ($25 or so) is imposed for payments that are 10 days or more in arrears. Additionally, there are collection efforts at 30, 60, and/or 90 day intervals when payments are missed.

At 30 days, a letter of demand is usually issued. This letter details the delinquency, reaffirms the fine that went out 10 days after the payment was missed and details what further collection activities await if the payment is not made in timely fashion. At 60 days, the matter is generally turned over to the association’s attorney or collection agent for legal proceedings. The legal costs are generally paid by the association and assessed to the delinquent unit owner as outlined in the association’s governing documents. The simple desire to avoid all of these additional costs is usually enough incentive for the unit owner to make good on the debt at this time. The addition of the attorney’s fees on top of the unpaid common fees and fine really drive up the debt. It is not uncommon for these fees to top $500 or more depending on the part of the country you live.

Finally, if the delinquent unit owner is unable or unwilling to pay the delinquent fees, the association can begin foreclosure proceedings against the unit owner. Again, laws vary from state to state but, generally speaking, delinquency can be remedied via foreclosure action, although unit owners have very specific rights from state to state. That is why it is best for associations to work closely with legal counsel during this phase of collection procedures. Laws also vary from state to state about the right of priority (who gets paid first) when foreclosure occurs as there are usually multiple claimants in the foreclosure proceeding. It is a drastic and final measure for just this reason.

There are times when HOAs, condominiums, timeshares, and cooperatives simply need more money than they have collected for capital improvement projects that are needed. HOALendingXchange.comis the easy choice for community associations and HOAs seeking money. Getting started with your own HOA loan is easy. Simply fill out the HOALendingXchange inquiry form and HOA loan experts will get busy preparing their very best HOA loan concepts for your consideration.

In San Francisco’s Housing Lottery, It’s the Luck of the Draw

By EMILY BADGER AND INYOUNG KANG
The Natalie Gubb Commons in San Francisco in February. Last fall, 6,580 people applied for 95 apartment units. Jim Wilson/The New York Times
Good morning.
People told Isabel Sanchez that the housing lottery was a waste of time. The odds were too long. Her family would never win. Happy endings are rare in San Francisco’s housing market for anyone who can’t afford luxury rents.
But she and her family were facing a no-fault eviction last fall; the house where they rented an in-law unit had been sold to new owners, who wanted their mother to move in. So Ms. Sanchez applied for the city-run lottery for Natalie Gubb Commons, a new 95-unit affordable housing development downtown open to households making up to 50 percent of the area median income.
Ms. Sanchez and her family were among 6,580 households that applied for the property, whose lottery and aftermath The New York Times chronicled through this spring. Such lotteries are a regular feature of housing policy in high-cost cities. Far more people need — and qualify for — public housing, housing vouchers or below-market-rate apartments than the assistance available. And so cities, housing authorities and developers often dole out what they have by drawing numbers.
Ms. Sanchez pulled No. 16. In April, her family moved into a new three-bedroom apartment renting for a fraction of market rate. That they won the first lottery they ever entered — while some people apply, and fail, for years — shows how utterly random the results are.
Lotteries don’t reward the neediest families, or the most persistent applicants, or those closest to eviction. Although luck still lands on households that fit these descriptions.
The larger problem, in California and elsewhere, is that scarce housing assistance makes these distinctions relevant. In a situation where everyone in need can’t have help, the fairest solution is arguably to set aside the impossible task of deciding who merits help the most, and simply draw winners at random.

By EMILY BADGER AND INYOUNG KANG
The Natalie Gubb Commons in San Francisco in February. Last fall, 6,580 people applied for 95 apartment units. Jim Wilson/The New York Times
Good morning.
People told Isabel Sanchez that the housing lottery was a waste of time. The odds were too long. Her family would never win. Happy endings are rare in San Francisco’s housing market for anyone who can’t afford luxury rents.
But she and her family were facing a no-fault eviction last fall; the house where they rented an in-law unit had been sold to new owners, who wanted their mother to move in. So Ms. Sanchez applied for the city-run lottery for Natalie Gubb Commons, a new 95-unit affordable housing development downtown open to households making up to 50 percent of the area median income.
Ms. Sanchez and her family were among 6,580 households that applied for the property, whose lottery and aftermath The New York Times chronicled through this spring. Such lotteries are a regular feature of housing policy in high-cost cities. Far more people need — and qualify for — public housing, housing vouchers or below-market-rate apartments than the assistance available. And so cities, housing authorities and developers often dole out what they have by drawing numbers.
Ms. Sanchez pulled No. 16. In April, her family moved into a new three-bedroom apartment renting for a fraction of market rate. That they won the first lottery they ever entered — while some people apply, and fail, for years — shows how utterly random the results are.
Lotteries don’t reward the neediest families, or the most persistent applicants, or those closest to eviction. Although luck still lands on households that fit these descriptions.
The larger problem, in California and elsewhere, is that scarce housing assistance makes these distinctions relevant. In a situation where everyone in need can’t have help, the fairest solution is arguably to set aside the impossible task of deciding who merits help the most, and simply draw winners at random.

Is It Time To Sell Your Apartment Investment?

by  Lee Kiser 

As a multifamily real estate investor, you probably get calls from brokers all the time telling you now is the perfect time to sell. The reality is that there is no perfect time. Because there are numerous parameters, the decision to sell is beyond anyone’s knowledge but yours. After analyzing clients’ decisions over the years, four key buckets stand out in determining if it is time to sell: macroeconomic trends, microeconomic trends, asset-specific factors and personal factors.

Ask yourself the following questions to determine the status of your property. Whenever you feel you are in two or more of these buckets, it is more than likely a good time to sell. If you find yourself in all four buckets, sell the property.

Bucket 1: Macroeconomic Trends

Alternative use of capital (stock market, etc.), interest rate changes, job growth, GDP, fair housing changes — all these are examples of macroeconomic trends that could impact your desire to keep your multifamily investment. The easiest example of a macroeconomic decision tree is interest rates. Have you factored rising interest rates into your investment hold? If you have a term loan, when is it due and what impact will interest rates have on your refinance? What does your return on capital look like on a refinance versus obtaining acquisition financing for an alternate property — and does it make sense to move the equity from your current investment into a new one by selling?

Bucket 2: Microeconomic Trends

Changes often occur in the city, county and state where your investment is. Is the market improving? Are new jobs coming in? Is there a growing tech and startup scene? How are renewals treating you? Seasonality is always a factor, but are you experiencing more or less vacancy than last year and the year before? Is the city imposing new restrictions on multifamily or affordable housing, which change the nature of your investment? What is the long-term fiscal outlook for the state in which your apartment property is located — and should you consider an alternative in another product type of neighboring state?

 

Bucket 3: Asset Specific Needs

How old are your roof, boiler, kitchens, baths, etc.? What does your building need, expense wise? Beyond just running your building, what are the capital expenditures you have realized versus those still remaining? How close are you to having obsolete structures and systems? What capital would be needed to bring these items current — and does it make sense to invest that additional capital in the building or release the equity from the investment through a sale and redeploy it in another property?

What does your investment look like? What is your total capital in it the apartment? Because of depreciation or appreciation, what portion of the value of your property is equity? How is that equity working for you? Does it make sense to keep the equity here? After a careful analysis, many times the most sensible thing to do is sell the property and purchase a replacement on a different basis.

Bucket 4: Personal Changes

There are so many things you have control over, but there are also things you don’t have control over. Death, divorce, retirement, career changes, relocation and so many more events can happen in your personal life that may make it the right time to sell. I weigh the personal bucket the highest of all the other indicators.

Too often owners make the decision to sell too complicated. Is it time to sell? Take a step back and look at your investment from the perspective of these four buckets and the decision becomes clearer.