Matthew Winton's Condo & HOA Blog

Bankruptcy reform and assssments

On Thursday, the United States Senate passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256). This bill has received much press due to the credit card company lobby seeking to limit the dischargeability of consumer debts. What has received less press is the important language in the bill pertaining to condominium and homeowner association assessments. Language in the bill, specifically Section 412 of the Act would amend Section 523(a)(16) of the Bankruptcy Code, would provide that a debtor would not receive a discharge of certain community association assessments. Specifically, the bill provides a discharge does not limit a debtor's liability:

(16) for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor's interest in a unit that has condominium ownership or in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case;

The House will next take up the measure, which President Bush stated he will sign. We will stay tuned to see if the quoted language above makes it through.

Neighborhood Associations- What are they?

I am sometimes asked about the differences between "community associations" and "neighborhood associations." First, Oklahoma does not have a standardized terminology pertaining to community associations. So, one person might call a homeowners association a real estate development association, a community association, a deed restricted community, etc. Generally, a community association refers to a real estate development containing some common areas, such as greenbelts or recreational areas, that are owned and operated by a corporate entity whose members are the owners of real property within the development. In my usage, a neighborhood association refers to an entity comprised of voluntary members whose purpose is to provide some value to the development. Often, neighborhood associations will collect dues paid voluntarily by its members. While communities having a neighborhood association may also have covenants filed against the real property within the development, the covenants rarely refer to the association and rarely vest any authority over the owners in the association.

That being said, many neighborhood associations exist and work "behind the scenes" to increase community in their development. I have found voluntary associations whose voluntary membership consistently reaches 95% of the entire development, which is an astounding testament to the importance of associations in real estate development. Fortunately or unfortunately depending on your point of view, scant legislation exists to help neighborhood associations operate and organize. Because of the general lack of formality attendant with neighborhood associations, the success or malaise of a particular neighborhood association usually rests on the few motivated board members of the association.

Oklahoma flag and political sign legislation

The Oklahoma legislature has two bills pending that should be of interest to condominium and homeowner associations. In what appear to be similar measures, HB1560 and SB0812 pertain to flag and political sign displays within condominium and homeowner associations. Generally, the measures if passed would expressly allow the display of flags and political signs on private property, despite architectural and structural restrictions limiting such displays.

The genesis of flag display bills probably comes from the spate of covenant enforcement litigation in states other than Oklahoma where a condominium or homeowner association has sued an owner for displaying a flag or political sign in contravention of a covenant prohibiting such display. These and other bills' status may be tracked at the Oklahoma legislature.

Oklahoma condominium law

It may surprise you, but the word "condominium" never appears in Oklahoma's condominium act. That is because early condominium legislation referred to condos as "unit ownership estates." Thus, Oklahoma's condo act is called the Unit Ownership Estate Act. The Act was passed in the 1960's and has been left relatively untouched over the past thirty years.

Parliamentary procedure resources

Most, if not all, associations will conduct some form of a meeting. Boards and committee meet. Members meet on an annual basis. Many associations use some form of parliamentary procedure to organize their meetings. You may be most familiar with "Roberts Rules of Order" but there are numerous different forms an association could adopt. The American Institute of Parliamentarians may be helpful.

Two informative websites for associations

Here are links to two extremely informative and helpful websites: the Community Associations Network at http://www.communityassociations.net/index.html and the Community Associations Institute at http://www.caionline.org/. Both sites have articles, law, and forms that would be helpful to any association.

Escrowing of assessments

HUD has announced that it is taking comments on whether to adopt a rule allowing mortgage companies to escrow association assessments. Read the proposed rule here: http://hudclips.org/sub_nonhud/cgi/pdf/24989.pdf. Community Associations Institute (CAI) has submitted its comments. You may read CAI’s comments to the proposed rule at http://www.caionline.org/govt/regulatory/escrowing_assessments.pdf

Welcome to the Oklahoma community association blog

This marks the initial publication of the Oklahoma community association blog - an online resource for information relating specifically to Oklahoma condominium and homeowner associations. My goal is to provide a meaningful resource for community associations, condominium associations, homeowner associations, voluntary neighborhood associations, and the people and professionals who live and work with them.