HOA threatens to fine members over negative social media comments

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hoa

Living in a community with a homeowners’ association is not always for the faint of heart. My husband and I attended our very first (and what turned out to be our last) annual meeting when we bought a new property several years ago.

A kindly looking older gentleman raised his hand to ask what appeared to us to be an innocuous question, and the president immediately threatened to have him escorted from the meeting. There were audible gasps…two from the Mannings in attendance. There was never a public explanation of what had just happened, but there was a lot of post-meeting gossip and sniping.

We’ve learned a lot about the personalities of the other property owners since that meeting. One thing we know for sure is to never step between this kindly looking gentleman and his kindly looking female neighbor across the street. It’s not a safe place to be. We don’t even drive our golf cart down the street that separates their houses. (I’m kidding, but we do laugh about that meeting when we drive down that road.)

One lesson we learned for sure is that retired folks who formerly had high-powered jobs up north can be prickly when it comes to their properties. And they have lots of time on their hands to manage things.

We decided we would be good neighbors. We would pay our assessments on time, keep our property clean and up to neighborhood standards, join in clean-up efforts and generally be happy and friendly neighbors.

But we decided we would never actively participate in the governance of the owners’ association.

Some homeowners in a community in Phoenix, Arizona have probably decided on the same course of action. Apparently, board elections got heated in the Val Vista Lakes community, and the neighbors engaged in a heated debate on social media, specifically on the association’s Facebook page. The debate included topics concerning the qualifications of the individual candidates and how the association was spending money.

The administrator of the Facebook page has apparently been instructed to take down the negative comments. But, more drastically, the Val Vista Lakes owners’ association sent out a letter threatening to fine residents as much as $250 per day for posting negative comments on social media.

Some residents have claimed this action would result in censorship.

What do you think, lawyers? Would this fine be enforceable in South Carolina? Would we need to read the formative documents to determine whether the association has the power to levy this fine? Would any of us want to live in that community?

A glimpse into the future of residential real estate sales

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Here’s what may happen when iBuyer companies enter our market place

iBuyers

I read an interesting article from Forbes recently by John Wake entitled “The Surprising Way Real Estate Agents are Adapting to ‘iBuyers’ Buying Houses Directly From Sellers.” I invite you to read the article in its entirety here.

The article focuses on residential real estate sales in the Phoenix market which the author calls “ground zero for the iBuyer explosion.” What does he mean by that? Apparently, the largest iBuyer companies, Opendoor, OfferPad and Zillow Offers, either started their operations in Phoenix or concentrate their efforts there. He estimated five to six percent of houses that change hands in that market are sold to iBuyers.

The article focuses, as its title suggests, on how real estate agents are adapting to this disruption in their market. But I find the article instructive to South Carolinians on the topic of how these internet sales are orchestrated and how they might affect sellers in our market when this disruption migrates east to us.

The author says that a homeowner who seeks to sell a house via an internet company must first complete an online form. An offer is typically made within two or three days. If the homeowner accepts the offer, inspectors will be sent to the house and will come back with a list of repairs and estimated costs for the repairs that the buyer requests before the closing.

As in our current process, the seller can agree to make the repairs, to reduce the price of the house to cover the cost of the repairs, or to terminate the contract.

The author suggests that real estate agents commonly complain that iBuyers tend to offer less and to ask for more repairs than traditional buyers. In other words, the seller makes more money in traditional sales involving local real estate agents.

The flip side of that coin is, of course, that closing with one of the iBuyer companies is more convenient than the process in our marketplace. A seller doesn’t have to get the house ready to sell, stage it, keep it clean for showings, or leave home for showings and open houses. The closing date may be more flexible, and there probably will not be contingencies for appraisals and financing.

How are real estate agents in Phoenix adapting? According to Mr. Wake’s article, real estate agents are assisting sellers by obtaining multiple iBuyer offers, analyzing and explaining the offers, discussing the options of accepting one of the iBuyer offers or beginning to market the home in the traditional manner, and coordinating everything with the iBuyer or traditional buyer, including repairs.

In short, real estate agents are attempting to become iBuyer experts in addition to traditional home sale experts.

Real estate lawyers, we need to be ready for this disruption when it hits us. We will want to be able to explain the changes in the market to our clients as well as to educate our real estate agents on how to stay in the game. Let’s keep our eyes and ears open! I’ll help!