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Well, the NJ Court of Appeals has handed down its long-awaited decision in the Twin Rivers case - although it is far from the final act in this long-running drama.  For those of you who have not been following this case as it has wound its way through the NJ court system, the basic contention is that the Twin Rivers Community Association is not a corporation, but a government, and is thus subject to the limitations on governmental action defined in the NJ State Constitution related to freedom of expression, voting, rule-making, etc.

In its decision, the Appeals Court found for the plaintiffs on several issues, particularly related to freedom of expression, and for the association on several issues, including voting rights and rule-making.  For a quick summary of the decision, a copy of the full appellate court opinion, and some additional analysis by CAI members in NJ, you can check out:  http://www.caionline.org/govt/news/twin_rivers.cfm . 

Why is this important to those who live and work in associations?  First and foremost, associations are corporations just like Google and the local hardware store.  No court would ever find that Google is a governmental entity and subject to such constitutional restrictions.  Why should associations be treated any differently?  Second, treating an association as a government is not the path to efficiency and effectiveness.  The reality is that corporations are inherently more efficient than governments.  The law of unintended consequences would seem to indicate that making associations comply with governmental restrictions will raise costs, decrease efficiency, and lead to even more complaints about rising assessments and how funds are allocated.  Finally, how far should this go?  Will board members have to make their personal finances and backgrounds public, as do many elected officials?  Will we have the nation's partisan political atmosphere infect our associations?  Let's hope not.

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This is far from the last we will hear about this case.  The Appeals Court remanded the case back to the lower court for rehearing and there is still the potential for an appeal to the State Supreme Court on this and any future rulings. 

As they used to say in TV-land, don't touch that dial.

Recently, a blue ribbon advisory panel presented the President with a set of recommendations regarding revising the income tax in the United States.  While probably well researched and documented, (I don't think anyone would argue that our income tax system is perfect) one of the reports major recommendations has caught the attention of almost everyone, including me.  That is the proposal to eliminate the income tax deduction for mortgage interest on owner occupied homes.

While I am sure that some economists would be able to explain to us all why the mortgage interest deduction is not appropriate in creating a tax structure, what the committee fails to consider here is that they are not "creating" a new tax structure, they are "modifying" an existing one.  The one on which millions of families have based their most important and significant financial decision-making.

The fundamental truth is that the mortgage interest deduction has helped create a country with among the highest home-ownership rates in the world and changing the rules of the game at this point has the potential to create massive dislocation for individual families and our economy. 

The leverage that the deduction provides enables more families to buy their own home - to achieve part of the American dream.  Just as rising interest rates can slow home sales, the elimination of the deduction would reduce the activity in one of the most important segments of the economy.  The ripple effects through the economy could be staggering, affecting lenders, builders, supplies, and even the local governments who depend on new development and increasing home prices to fund ever increasing tax revenues.

I guess this is a bad idea whose time has, hopefully, not yet come.  Luckily for those of us paying taxes it doesn't appear that the idea has much traction here in D.C. and many of the strongest industry trade associations including the National Association of Realtors and National Association of Home Builders have taken strong positions against it.

CAI's 27th Annual Community Association Law Seminar will be held January 27 and 28 in Las Vegas, Nevada.  Over 400 attorneys and other industry leaders will be participating in this forum to explore future trends and practices in the law of homeowner and condominium associations and residential cooperatives.  To learn more about Law Seminar and how to attend please visit:  www.caionline.org/events/lawsem/ .

Covering everything from recent case law to community security and disaster planning, the Seminar is presended by CAI's College of Community Association Lawyers (CCAL).  CCAL acknowledges member attorneys who have distinguished themselves through contributions to the evolution or practice of community association law.  To learn more about CCAL and membership please visit:  www.caionline.org/ccal/index.cfm .  To view a searchable database of CCAL members by state visit: http://www.caionline.org/directory/nbccam_Search.cfm .

I am off later this week to attend the National Association of Home Builders - International Builders Show.  Several of our members will be conducting a joint presentation with NAHB members on transitioning a community from developer to homeowner control.  Effective transition practices can encourage cooperation between between the developer and homeowner, ensure continuity in the community, and reduce friction in the transition period.

This presentation is based on a best practices report that we completed in partnership with NAHB last year, which is just one of seven such reports available on the Foundation for Community Association Research web site at:  http://www.cairf.org/research/bp.html

Another year is upon us.  To all our members, please accept my best wishes for a happy, healthy, and prosperous New Year. 

CAI recently completed a nation-wide survey of community association residents to assess their satisfaction with their communities.  This survey demonstrated, once again, that the vast majority of Americans living in condominiums, homeowners associations, and co-ops are satisfied with their communities, are confident that their boards serve them well, and believe that expanded government regulation of associations is not needed.

Perhaps most strikingly, 71% of residents had positive opinions of their associations, while only 10% had negative perceptions.  The remaining 19% were ambivalent, neither positive or negative.

Conducted for CAI by Zogby International, the survey sampled homeowners from across the country and has a confidence interval of +- 3.5%.  You can see a more detailed abstract of the survey results at:  http://www.caionline.org/about/survey.cfm

National Community Leadership Forum - We are back in the office from another successful Leadership Forum, this year in Altanta, Georgia.  Special thanks to the Georgia Chapter for being such wonderful and generous hosts and to all of our members who attended.  Not surprisingly, much of the talk around the meeting was related to the horrendous hurricane season experienced on the Gulf Coast this year and how communities plan for and deal with such mega-challenges.

Future Conferences - Last fall, the CAI Board of Trustees approved changing from two national conferences per year to a single event.  I am pleased to announce that we have been able to expedite the implementation of this process and beginning in 2006 will host a single national conference.

For 2006, the CAI National Conference will convene in Palm Springs, California on May 4 - 6.  The primary conference hotel will be the Westin Mission Hills.  More information is available at  http://www.caionline.org/events/conference/index.cfm

I hope to see many of you there.

Since the 2003 hurricane season, CAI has been working to change a number of FEMA regulations regarding disaster recovery.  Perhaps most importantly, we have been working to change the rule that prevents FEMA reimbursement to community associations for removal of debris on roads and public areas in their communities. 

Under the current rules, FEMA provides reimbursement for roads maintained by governments, but not for clearing roads maintained by associations, even if they are public thoroughfares and necessary for the provision of emergency services.  Practically, this impacts public safety, and philosophically it is another example of community association taxpayers receiving a lower level of service from government.

Happily for those on the Gulf Coast, FEMA has suspended its rules on reimbursement for debris removal due to Katrina and Rita.  Community associations will be able to apply for reimbursement to clear their roads.  While that doesn't help all the victims of previous disasters, we hope that it indicates FEMA's direction on assisting community assocations and all citizens recover from disasters. 

CAI is continuing to work on legislation that will make these rule changes permanent.  You can read more about it at: http://www.caionline.org/news/detail.cfm?PRNumber=99100605

I continue to get emails from across the country as CAI members organize responses to the Hurricane Katrina victims. I am constantly amazed by the generosity of our members and their willingness to step up and offer help to those in need.

In Texas, Houston Community Management Services and Greatwood HOA collected 12 truckloads of supplies to support the relief efforts and provide for gulf coast residents being housed in the Houston area.

In Nevada, Excellence Community Management organized a Hurricane Katrina Victim Relief Benefit last Sunday.  Working with numerous other organizations, they raised over $50,000 for the American Red Cross.

In California, Action Community Management is collecting and matching employee donations to "Giving Children Hope".

Update: Thursday September 15

CAI members across the country continue to demonstrate their generosity.

In Maryland, The Brickman Group, a national landscape firm has pledged to match all employee contributions to the Red Cross 2 for 1 and has made an initial contribution of $250,000 from Brickman family members.

In Georgia, Metlock Bridge, has welcomed several families from the Gulf Coast.  In addition to hosting familes in their homes, one family has been given a vacant home for their use which has been fully furnished and equipped by the community.

In Texas, Magnolia Property Management is working with Jobworkz to help find new jobs for workers displaced by the storm. 

In Texas again, SCM Real Estate Services is providing several facilities to the relief efforts including a 30,000 square foot warehouse that is being used to store and distribute donations of food, clothing, and other items and a 15,000 square foot commercial building for temporary shelter and business relocation services.

In Arizona, residents of the Ocotillo Community Association have arranged for a new apartment, food, clothing, furniture, and job opportunities for a New Orleans family.

In Virgina, the Wellesley Whitecaps, the youth swim team in the Wellesley Homeowners Association, held a car wash and bake sale to raise over $3,000 for the Red Cross.

In Georgia, AtHomeNet, a community web services company, will make a contribution to the Red Cross on behalf of every new community they bring online.

Just amazing everyone.  This is what we mean when we all talk about building community. 

As the situation continues to worsen along the Gulf Coast, CAI members are stepping up to help  from across the country. 

Just this morning I heard from John Lawton, CEO of HRW, Inc. a management company in Raleigh, NC.  John is collecting contributions from his employees to the Red Cross Disaster Relief Fund and HRW will match all of their individual contributions.  He also informed me that one of his communities, Southern Village, has transformed their Labor Day community picnic into a fundraiser for hurricane relief.

This is what community is about.  I am so proud of these individuals and organizations who not only talk the talk about community, but walk the walk as well. 

If you or your organization are helping raise funds for the victims of Hurricane Katrina I would like to hear about it.  Just click on the "Send us comments" link at the right and send me an email.

UPDATE:  We have been getting a number of calls from members who are working to adapt their rules to enable their communities to assist in the relief efforts for victims of Katrina, including housing those displaced by the storm.  We urge all of our members to be flexible and reasonable in assessing how to apply their rules under these unprecedented circumstances.  For more information, take a look at our statement at: http://www.caionline.org/news/detail.cfm?PRNumber=98091305

We at CAI may understand community, but we can’t begin to imagine the sense of loss, frustration and desperation created by Katrina along the Gulf Coast.  I found myself mesmerized by the pictures on the news last night and this morning, and wondering how well I could manage the stress that the citizens of Louisiana, Mississippi, and Alabama are facing.

Our thoughts and prayers are with those who have lost the most important parts of their lives—family, neighbors and friends.  The loss of homes and other property is beyond the comprehension of those not living this tragic reality, especially on such a horrific and widespread scale, but this is when people can and should come together, not only those directly affected, but also the millions of others who can contribute, financially and otherwise, to the recovery.

The recuperative powers of mutual support, community, volunteerism, sharing, and giving can be truly astounding and powerful.  We only need to consider the hurricanes in Florida , the tsunami in Asia, and the fires in California all within the past year.  The critical lesson is that as individuals and communities we find a way to survive, rebuild, and most importantly help one another.

Whether in a formal homeowner or condominium association or not, there is no better way to build a sustainable sense of community than by working together – with public and private partners – when everything seems to have fallen apart.  We’ve written about recovery from natural disasters in our magazine, Common Ground, and the stories are uplifting and reassuring—a sense or normalcy does eventually return.  Such stories may be unfathomable right now in Alabama, Louisiana and Mississippi, but they will be written.

For those in need of help you can contact the Federal Emergency Management Agency at 1-800-621-FEMA (3362) or by going to www.fema.gov.

If you want to help, you can make a donation to help disaster victims through the American Red Cross at 1-800-HELP NOW (435-7669).  Many other charities are also collecting funds to assist victims of this massive storm.

 

It is somewhat rare that I find myself in personal agreement with the conservative element of the Supreme Court, but this is one of those times.  Recently, the Court upheld a Connecticut court decision (Kelo et al v. City of New London, 04-108) over the taking of a number of private residences to amass the land necessary for a new commercial development. 

Traditionally, governments have only been empowered to exercise eminent domain under the Fifth Amendment in support of some "public use" such as a road, bridge, school, etc.  This decision extends the definition of "public use" to anyone and anything that might provide a greater economic benefit - and the definition of the economic benefit is in the hands of the government and the acquirer of the property, not the current owners.  I guess that this means that no one really owns property, they just have a limited license to use it until someone decides they can find a better use for it and can convince a city or county government that they are right.

Justice Sandra Day O'Connor, in her dissent, noted that this decision abandoned the traditional definitions and principles of individual property rights and enhanced the influence and power of the wealthy and well-connected at the expense of the individual land-owner.  I am sure going to miss her voice of reason and moderation on the Court.

In our industry, we frequently deal with similar claims that community associations deprive owners of their property rights.  I, however, see a big difference in the circumstances. 

 Individuals buying a home in a community association enter into a contract which spells out the specific relationships, requirements, and limitations they are agreeing to.  They are, or certainly have the opportunity to be, informed before they buy.  An eminent domain taking on the other hand can occur at any time, for any purpose, based on this Supreme Court decision.  The individual owner has no expectations, limited warning, and now, apparently, very little recourse.  Perhaps this was the correct legal decision, but I am not sure it was the equitable one.

Of course that is just my opinion.

Over the coming holiday weekend, CAI will be implementing a new technology platform to serve our members.  With over a year of planning and preparation (and a little luck) we will be up and running on July 5th.  For most members, you won't see much of a change immediately, as the initial roll-out will primarily support our administrative operations. 

But in the coming months we will be implementing a wide variety of new members-only web services supported by the system.  Eventually, members will be able to update their contact information online, access enhanced members-only areas of the web site, and utilize expanded and enhanced information exchange tools.

Our goal, as always, is to provide even better tools, information, and service to our members.

I can't resist a brief entry on the revelation that FBI agent Mark Felt has been identified as Woodward and Bernstein's inside source throughout the Watergate scandal.  Handicapping who Deep Throat was has been a popular parlor game, at least for those of us who live in Washington, DC, and follow politics, for many years. 

I guess that I had always assumed that it would turn out to be a political type who had a political agenda regarding Nixon White House policies.  It was surprising to have it be someone from law enforcement after all. 

So what does this have to do with community associations?  Well, one of the great lessons of Watergate was the notion that no matter how high your position, we are all bound by the same set of laws, rules, and ethics.  I think that is an important concept to keep in mind in the governance of community associations. 

The fair, consistent, and equitable application of the rules makes for a better run community.  Many of the horror stories that we hear about in the press have come about because a community's leaders have lost sight of this simple truth. 

CAI's 54th National Conference in Tucson was a fantastic success.  More than 750 attendees participated in a wide variety of education programs, were inspired by two fantastic general session speakers, and enjoyed the amenities of the wonderful Westin La Paloma Resort.  The conference was the most well attended in many years.

Education, insight, and understanding are critical components of any successful conference.  The conference featured more than 30 sessions on such wide ranging topics as risk management, flag issues, and using technology in your community.  We even held a 2 part session on foreclosure issues and invited representatives from outside groups that support seniors and others to participate in a town hall meeting.  The dialogue was certainly lively, but I believe that it was critical to expressing and understanding a wide variety of points of view on this challenging issue.

Just as important, though, are the networks and connections people make at conference and the friendships that are made and reinvigorated there.  Conference is the chance for many of our members to connect with others in the industry, get together with old friends or make some new ones, and have some fun in the process.  I hope that everyone enjoyed the events as much as I did and I hope to see many of you at our next national event, the Community Association Leadership Forum in October in Alanta, GA.