Published on: August 1, 2016
Board members who suspect that at least some of the owners requesting “emotional support animals” don’t really qualify for them, will find confirmation in a recent New Yorker magazine article noting the ease with which pet owners can document their right to bring animals into residential and commercial properties where they aren’t otherwise allowed.
“The Fair Housing Act says that you and your [support animal] can live in housing that prohibits pets,” the author, Patricia Marx, notes. The Air Carrier Access Act, similarly, entitles owners to fly with their ESAs at no extra charge. Both laws require a letter from a health professional documenting the need for the animal, which, Marx found, it is almost laughably easy to obtain.
A Google search for ‘emotional-support animal’, she notes, will produce “hundreds” of professionals willing to generate the letter owners need. “Through a site called ESA Registration of America, I found a clinical social worker in California who, at a cost of a hundred and forty dollars, agreed to evaluate me over the phone” to discuss the essential support her EMS would provide, Marx reports. At thedogtor.net, she was able to complete an on-line medical form by answering 74 questions, and receive her verification letter in only two days at a cost of $190.
Some of the organizations that train support and service animals –the ones that actually provide legitimate services to people who legitimately need them – are beginning to complain.
Corey Hudson, CEO of Canine Companions (a nonprofit that trains assistance animals) obtained more than 28,000 signatures on a petition asking the Department of Justice to establish an official registry, “to test and certify assistance dogs and to regulate the sale of identification vests, badges, and the like.” Hudson, who says he has “declared war” on fake assistance animals, told Marx he wasn’t gratified by DOJ’s response. “They [said they] think the [existing] law is adequate.”
The Federal Housing Administration has proposed new regulations for federally insured reverse mortgages. Administration officials say the rules are designed to strengthen consumer protections for the popular program, but condominium industry executives see the proposal as a thinly disguised continuation of the agency’s attack on the condominium priority lien.
The reverse mortgage program allows seniors to tap the equity in their homes while deferring payment on the funds borrowed until after the home is sold, the borrower moves or dies. The new rules and previous changes increase disclosure requirements for consumers and tighten underwriting standards, targeting concerns that have limited consumer demand for the loans.
But the FHA’s proposed rules would bar reverse mortgages in the 21 states (and the District of Columbia) that have enacted priority lien statutes that give unpaid condominium fees priority over a first mortgage in a foreclosure action. The net effect would be to make seniors living in condominium communities ineligible for the loans.according to the Community Associations Institute (CAI), which estimates that 4 million seniors would be affected.
“It is extremely disappointing that the Federal Housing Administration (FHA) is discriminating against our country’s aging population to target [super lien laws],” Dawn Bauman, CAI’s senior vice president for government and public affairs, said in a press statement.
“Perhaps what is most worrisome,” she added, “is how FHA officials are bowing to the wishes of the banking industry by using seniors as a blatant ploy to attack state laws that protect homeowners from banker negligence.” Priority lien laws, she said, protect condo owners from the “financial burdens” they incur, when lenders “refuse to maintain or foreclose on vacant or abandoned homes.”
First time buyers, notable by their absence from the housing recovery thus far, returned to the market in force in June, spurring a stronger than expected 3 percent year-over-year increase in existing home sales ─ the strongest performance since February of 2007. First time buyers represented 33 percent of purchasers – the highest proportion in four years, while the share of investors declined to 11 percent – the lowest since July 2009, according to data compiled by the National Association of Realtors.
New home sales were even stronger , reaching an annualized rate of 592,000 – an eight-year high – as low mortgage rates and job gains continued to boost the market.
“The grinding recovery continues,” Brett Ryan, a U.S. economist at Deutsche Bank Securities Inc. , told Bloomberg News. “The fundamental underpinnings are still really supportive for housing, so it should be a steady contributor to growth over the next year or so.”
Despite the robust sales figures, Lawrence Yun, chief economist for the NAR, sounded a cautionary note. Pending sales and foot traffic reported at open houses have both declined, he pointed out, and a continuing inventory shortage “will depress purchases even if demand remains strong.” Given those constraints, Yun cautioned, “we may just have hit peak levels.”
DOING A LOT
Large-scale community associations are providing a broad range of amenities homeowners want, taking over responsibility for many of the services municipal governments traditionally provide. That’s according to a report produced by the Foundation for Community Association Research in conjunction with CAI’s Large-Scale Managers Committee, exploring current trends in LSAs and assessing their impact on land development and local governments.
Researchers surveyed more than 400 community association managers nationwide to obtain information about the “current scope, diversity, management and governance” of LSAs. The report defines LSAs as communities that have 1,000 or more lots and budges of “several million dollars.”
Respondents indicated that these communities provide an “extraordinary” range of services that are “typically considered municipal duties,” among them: recreation, stormwater management, roadway maintenance, and neighborhood security. Managers reported that their associations maintain an average of 9.5 median miles compared with 1.6 median miles maintained by local governments.
Among the other findings:
- More than half (51.7 percent) of residential LSAs impose restrictions to protect conservation areas 71.2 percent of private club communities impose restrictions to protect their wetlands and waterways.
- A large majority (66 percent) report of the associations report high levels of interaction with local governments and more than a third describe those interactions as positive.
- More than one-third (36 percent) permit political signs in the community; 60 percent of residential LSAs host forums on “relevant issues.” and nearly two-thirds (60 percent) of age-restricted LSAs have a polling place within the association.
I’M OK – ACTUALLY, YOU AREN’T
Surveys indicate that consumers generally think their finances are in good shape; the statistics suggest otherwise. A Federal Reserve analysis identified a number of weak points, among them:
- Most Americans have little or no savings. Nearly half of the 5,700 survey respondents said they would have to sell something or borrow money to cover a $400 financial emergency. MMM
- More than 20 percent said they are having trouble meeting medical expenses.
- Nearly one-third of non-retired adults reported that they have no pension and no retirement savings. Although 75 percent of older workers (aged 45 and above) reported at least some savings (compared with half of those between 18 and 29), 14 percent of working adults 60 or older were in the ‘no savings’ category.
- Only 15 percent of the respondents with retirement savings said they were “very confident” about their ability to make the right investment decisions for those funds.
- Approximately 12 percent of the respondents who have recently purchased a new car financed it with a loan that has a repayment period longer than they expect to own the vehicle. That is “potentially dangerous” both for borrowers and lenders, Fed analysts pointed out, noting that auto loans represent the third largest form of consumer debt, behind home mortgages and student loans.
IN CASE YOU MISSED THIS
The U.S. Supreme Court has sided with property owners in a decision affirming their right to seek judicial review of decisions by the U.S. Army Corps of Engineers under the Clean Water Act. The 8-0 decision (United States Army Corps of Engineers v. Hawkes) emphasized the need to curb the statute’s “ominous reach.”
Here’s a cautionary tale for millenials (and others) who live, breathe and act (up) on social media sites. According to a 2014 survey from CareerBuilder, 43 percent of employers use social networking sites to research job candidates. Of those, 51 percent reported that they refused to hire a candidate based on content found on social media. Forty-five percent of employers also use search engines such as Google to research potential job candidates.
A House committee has approved a compromise version of the Amateur Radio Parity Act, eliminating or modifying key provisions that CAI contended unreasonably restricted the authority of condo associations to enforce rules governing the location and design of ham radio towers in common areas.
A surge in cash-out refis, one of the danger signs preceding the housing market crash eight years ago, is not problematic in the current environment, analysts say.
Baby boomers have had an outsized impact on the housing market since they first entered it as first-time buyers — and they aren’t done yet. “When a population this large expects to move into less expensive rental housing, we have to expect it will create significant new pressure on both the supply and cost of existing affordable rental housing,” David Brickman, Freddie Mac’s executive vice president for multifamily, warns in a recent report.
THE TEXTS THAT BIND
The age-old caution about oral contracts (“not worth the paper they’re written on”) still applies. But what about text messages? They aren’t “written” on paper, in the traditional sense. But the Massachusetts Land Court has ruled that text messages may nonetheless create a legally binding real estate contract.
This case of first impression (St. John’s Holdings, LLC v. Two Electronics, LLC) grew out of extended negotiations between two real estate brokers – one representing Two Electronics, the owner of a property, the other representing St. John’s Holdings (SJH), which proposed to buy it.
After a series of e-mail and text exchanges between the two agents discussing the terms of the purchase, the buyer’s agent (Cefalo) sent a binding letter of intent (BLI) to the seller’s broker (Barry), detailing the terms under which St. Johns would purchase the property. The letter noted the purchase price, the due diligence period, the deposit and the proposed closing date.
Following another exchange of messages, Barry, representing the seller, sent Cefalo a text saying Two Electronics “is ready to do this,” but he also noted that the owner had three outstanding issues he wanted to address. Cefalo responded by sending a final letter of intent, which increased the deposit SJH would provide but did not address any of the other concerns Barry had mentioned.
Barry subsequently sent Cefalo a text message asking Cefalo to deliver the letter of intent (signed by SJH) and the deposit, which he did. But Two Electronics received a better offer in the interim, and refused to sign. St. Johns sued, arguing that even though Two Electronics had never signed the final letter of intent, through the exchange of text messages by their agents, the two parties had executed a binding contract requiring Two Electronics to sell to St. Johns.
The key question: Can a text message constitute a “signed” contract sufficient under the Statute of Frauds to bind the seller to the agreement?
To support its argument that no binding contract had been created, Two Electronics cited a 2003 Land Court decision, concluding that emails “by their quick and casual nature, tend to lack in many instances the cautionary and memorializing functions a traditional signed writing serves under the Statute of Frauds.”
But Land Court Justice Robert Foster noted that electronic communications have “advanced immensely,” since that decision and have become “commonplace.” More recent decisions, he said, “acknowledge that emails may be writings that satisfy the Statute of Frauds and create a binding contract.”
Arguing strongly in favor of St. Johns, in the court’s view, was the extensive and through nature of the e-mail and text communications between the two brokers. Under the Statute of Frauds, Justice Foster noted, “multiple writings relating to the subject matter of the agreement may be read together as long as the writings, when considered as a single instrument, contain all the material terms of the contract and are authenticated by the signature of the party to be charged.” The communications preceding the text messages accompanying the binding letter of intent reflected “meticulous attention to provisions that would govern the agreement to purchase the Subject Property,” Justice Foster said.
“If we want to prioritize closing the gap for low-income households, we’re going to need more funding from public subsidy.” ― Erika Poethig, director of urban policy initiatives at the Urban Institute, in a report describing the obstacles to producing affordable housing.