Down through the years, the best businessmen have realized that good ethics is good business.
Colbert Coldwell believed in this when he started out in San Francisco after the disastrous earthquake of 1906. Would there be a Coldwell Banker today if he had not lived by principle?
Today, the realtors of NRT-Cendant-Coldwell Banker-Century 21 and ERA have an opportunity to continue that great tradition of honesty and openness.
Across the U.S., over 45 million Americans live in over 220,000 homeowner associations from coast to coast. The numbers grow daily. Most of you have probably sold a home that was in a homeowner association.
While some associations run smoothly, there is so much disturbance in so many homeowner associations, that they have now become a national problem.
In Arizona, a homeowner, distraught at treatment that he had received from his board of directors, entered a homeowner association meeting with guns blazing. In seconds, three people were dead.
In Las Vegas, Channel 3, (an NBC affiliate) did a poll in homeowner associations, and 48% of homeowner stated that they had experienced problems with their association.
In Harris County, Texas, 4000 homeowners have lost their homes because of fines levied by their associations.
On web sites and radio shows, in newsletters, interviews and newspaper columns, homeowners across the country are rising up against homeowner associations.
In Nevada, Arizona, Florida, Texas and California several groups, some with their own radio programs, have declared a total boycott against them.
The author of homeowner association law in California (the Davis Stirling Act) recently admitted that the act was a mess - a product of trying to fulfill the mandate of keeping all the lobbyists happy.
There is clearly a problem - and you can help.
NRT - to which you belong - has over 32,000 sales associates. It could be a powerful force for good. Here are a couple of suggested ways:
1. Advocate homeowner association laws that put homeowners first - not lawyers, management companies or any other vendor. Homes are for homeowners - not cash registers for lawyers.
In California, lawyers quietly lobbied for a law that would allow homeowner association reserves to be used to pay their fees. Lobby especially that severe caps be placed on lawyer's fee, and that the state-mandated insurance not cover wrong acts by board members.
2. Like Colbert Caldwell, be utterly open and frank to all potential buyers.
Let them know the significant risks involved in purchasing a home in an association - that boards of directors have vast powers to fine, lien and foreclose on a home without going through a court, that the association can be sucked into devastating law suits, that there might be hitlers on the board, that their freedom and individuality are significantly curtailed, that the CID (common interest development) lobbyists are constantly pushing for laws that benefit themselves, and disadvantage homeowners - and that politicians are all too eager to accept their campaign contributions and do their bidding.
(In California, Gov. Gray Davis, - after whom the Davis-Stirling Act is named - collects on average about $37,000 in campaign contributions every day and has stashed $26 million dollars in his bank account.)
Disclosures on the sale of a home in a homeowner association should include at a minimum:
a. that a vast regulatory scheme covers homeowner associations in addition to the particular state law (e.g. Davis Stirling in California) that governs them In most states, this would include the Corporations Code and the Business and Professions Code.
b. how many lawsuits and association has had and/or is currently in.
c. detailed financial information covering not only present assets and liabilities, but also the likelihood of special assessments in the future.
d. Engineering and other similar reports on the property.
e. Subdivision records and studies
f. Hazards in the area such as landslides, floods etc.
g. Encumbrances and liabilities on the property, e.g. the various vendor contracts such as for lawyers, management companies, landscape firms, insurance policies - especially Director's and Officers and General Liability.
h. Pending legislation that might impact the property
If you do the above, not only will you be living up to the ethical and legal obligations of your profession and earning the trust of your clients, but you will also be helping to preserve the American home were citizens can be free, creative and proud.
For more information, you can access the American Homeowner Resource Center at : http://www.ahrc.com.
Your ideas, suggestions and records of your experience will be gratefully accepted by email at realtors@ahrc.com.
We hope that NRT will not only be the largest in size globally, but also the leader in acting ethically and responsibly on behalf of all homeowners.
We wish you well in your efforts, and look forward to receiving your responses to our request. Thank you.
Elizabeth McMahon
Director
American Homeowners Resource Center
P. O. Box 97
San Juan Capistrano, CA 92693
(949)366-2125
