Thursday, December 22, 2016

Recent posting on our sister blog - The Crossings at Willow Creek

As part of the work I’m involved with to effect HOA legislative change in Arizona, one of our team members is blessed with some amazing insights into the Pontius Pilate attitudes of local government who benefited greatly by tax burden shifting when HOA’s were created. The believe they have no responsibility at all.
To some extent that’s true because municipalities under the City Council/Town Manager system, which bifurcates policy and operational decisions, benefit from sovereign immunity when acting in a public body with respect to policy decisions.
The recent Riley vs The City of Prescott case, even though sadly lost, reaffirmed there was no sovereign immunity for the Mayor. The City’s appeal was dumb because that ended up being reaffirmed in the 9th Circuit of Appeals, down one only from the US Supreme Court.
The lesson - when elected officials usurp the role of the City Manager by meddling, in smoke filled rooms or not, then there is liability for operational decisions. This should not happen if elected officials felt comfortable delegating day to day stuff to staff. But there is little trust and doing a “good ole boy” a zoning favor becomes highly tempting – but dangerous.
In the case of the Crossings, backroom dealings changed a plat approved in City Council with no road going through it. That’s because when the plat was recorded, a deal had been done with the developer to reroute a major highway from his adjacent business subdivision through his, and eventually our, residential one – without going back to Council for approval publicly.  Their logic - ordinary folk don’t count, and if they object, retribution will follow.

So as the Crossings unfolds, we may have a lesson in teaching a City who needs something red hot stuck up its rear end a lesson which has been a long time coming. As the Crossings HOA now is in legal name only, instead of us being the lone holdout of 79 lots, we are now 1 of 1 with the power to enforce via a derivative suit to force compliance with easements carrying all the City’s water.  

Happy Holidays

Saturday, December 10, 2016

Senator - What's in your wallet?

The letter below was sent to Arizona State Senate President Yarbrough with regards to HOA legislative proposals in the upcoming legislative session. There's also a link to a radio interview aired today on the whole issue of money in HOA's - and where is it? Click HERE to listen to it.
What it tries to do is reduce the complexity of HOA finance down to a simple question - why would an HOA and the Management Company refuse to give out read only user names and passwords to the bank accounts so members can see their money at work on their iPhone? 
And if they are being refused - WHY?
Especially in the light of the fact that CAI Central Arizona has that simple ability on its own bank accounts as can be seen by clicking HERE


*********************************************************************************
To: Arizona State Senator Yarbrough - December 10,2016 
Dear Senator Yarbrough
I'm part of a talented diverse citizens group working with Senator Farnsworth on legislation to transform the Arizona HOA industry, the fourth and lowest level of government after Federal, State and Municipal.  This country has the world's best military and private sectors but one of the world’s worst public sectors. Based on the weeks since November 8, I’m convinced government at all levels has no idea of the true “shock and awe” to come. Our group represents a new model of public-private partnership which Tony Blair once described as the third way, and which can help manage some of this.
My 30 yrs. on Wall Street, 10 yrs. of working with local governments across the Mountain States, and wrestling with HOA issues, convince me that, unless action is taken, we face a potential perfect storm with aspects of Enron, subprime and the near meltdown of the money payment system in 2008. This emanates from the $75Billion of payments annually and the $50Billion of cash reserves in the HOA system, part of a fundamentally flawed national housing system. I’m convinced this will be transformed with the new Washington Team. Fannie and Freddie are already being primed for what should have happened 30 yrs. ago. Arizona, much like the Veterans scandal, can be the engine of national HOA industry change as part of that.
Your staff can review the documented facts on my blog at www.arizonahoa.blogspot.com In my business, he/she who connects the most dots wins and there’s no place for anecdotal evidence. Just the facts. Just the facts.
One fact we know is that in Arizona alone in 2008, $1Billion of taxpayer’s money was lost with two banks enabled by HOA Management Companies. But even this pales in comparison to the potential I see for terrorist incursion due to failed enforcement of Patriot Act anti-Money Laundering procedures, risks to the ACH payment system, and a financial meltdown of FirstService, the largest HOA Management Company nationally. This could result, in a worst case, in millions of homeowners being current on their mortgages, yet faced with foreclosure.
I believe the current federal and state banking regulations, with or without Frank Dodd, are sufficient to bring certain bad actors to heel, including banks such as US Bank, Mutual of Omaha and Western Alliance. And this will not be the first time I have played a part in that. But all we are doing is exposing the problem, without providing the solution, which only smart legislation and regulation can bring.  I implore you therefore to make this a high priority. I should add one other thing:
I worked in suicide prevention in the UK. With 50,000 hits now on my blog, the feedback I can never disclose, makes me feel I’m back there. These are not isolated examples but acts of legal terrorism as I’ve previously testified. Hence my favored legislative fix, if I had to pick one, and having defeated a SLAPP suit myself, is to extend Arizona’s anti-SLAPP protections to the “right to petition” HOA Board Members. 
But there are other essential fixes. HOA Management Companies for instance are running a shadow banking system with people hardly equipped to deal with landscaping issues. And Realtors are effectively underwriting faulty HOA disclosure by those same Management Companies, none of whom are licensed by anybody.
Achieving public awareness on financial issues is not easy, until 2008 happens. So, we are conducting an experiment. We’d ask every legislator to participate by asking their HOA and Management Company, to provide user names and passwords on a read only basis to access your HOA bank account online. You may be shocked by their refusal.
I’d be happy to meet. Thank you for your service.
Respectfully
                                        
John Sellers


Copies:
Governor Ducey
All Arizona Senators
All Arizona State Representatives
Trump Transition Team
Dennis Charlton, Arizona Department of Financial Institutions
Martin J. Gruenberg, FDIC Chairman,
Thomas J. Curry, U.S Comptroller of the Currency
Richard Cordray, Director, Consumer Financial Protection Bureau
John C. Williams, President and CEO, Federal Reserve Bank of San Francisco
Senator Farnsworth Working Group
Various industry participants

Sunday, December 4, 2016

Records Request to the Southern Arizona Chapter of CAI

From: John Sellers [mailto:jasellers123@gmail.com]
Sent: Sunday, December 4, 2016 10:17 AM
To: director@soazcai.org
Cc: support@azreservestudy.com; pbj@azhoalaw.net; carolyn@gshoalaw.com ; bob@batespaving.com; carlaya@arcadia-landscape.com; ralph@azentrysystems.com; tracey.everett@dunnedwards.com; km@cactusasphalt.com; g.catalan@hoa-capital.com; info@titanrestore.com; carolinereilly@tierraantigua.com; daryl.villas-west@qwestoffice.net; fede214@msn.com; jason.smith@carpenterhazlewood.com; Jena.Carpenter@associa.us; kthygersen@cadden.com; Smclaughlin@mahoneygroup.com; +14808937775@myfax.com

Subject: Records request pursuant to ARS 10-11602

To: Kathy Thygerson, President Southern Arizona Chapter of CAI 
Dear Ms. Thygerson
As the authorized representative of Debborah Sellers, a CAI member for 6 months as of yesterday, can you please supply the following pursuant to ARS 10-11602:
  1. Copies of the Annual Statements of the Chapter
  2. Copies of all Board Minutes and minutes of all committees including the legislative Action Committee for the last three years

Pursuant to ARS 10- 11602.C., the request, as a CAI CAZ Member for longer than 6 months, is in good faith and for a proper purpose, and describes the records we desire to inspect. We seek them to determine if the conduct of the Legislative Action Committee, with its commonality with AACM, a for-profit corporation, is consistent with preserving the non-profit status of the Chapter
Regards
John Sellers
Cc: James Christensen as Statutory Agent by fax to +14808937775@myfax.com