Construction Liens on Leased Commercial Premises

In general, a contractor or supplier is entitled to file a lien against a commercial property if they have performed work or provided materials pursuant to a written contract with the owner. These lien claims must be filed within 90 days of the last date of providing materials or services for the project.

On the other hand, if a contractor or supplier is providing materials or services for a tenant of a commercial property, the rules are different. The differences as to what the lien may attach to are discussed in detail below.

If the tenant of the property entered into a contract for the improvement of the property and the owner directly authorized the improvement in writing, the lien may attach to the real property. The proper way to ensure that a lien may attach to the real property is to have the owner of the property sign off on and approve any contract for the improvement of the real property.

As a contractor or supplier, it is suggested that you obtain the owner’s authorization which would thereby allow you to assert a lien claim against the property itself in the event of non-payment. This can become a very powerful tool on collecting an unpaid balance, as an action to foreclose upon the lien could be brought. This would place a great deal of pressure on the tenant to pay the outstanding balance.

Conversely, if the owner of the property does not sign off on or agree to the improvement to the real property, a lien claim would only attach to the lease hold interest of the tenant. Under these circumstances, the lien claim would not attach to the real property itself, but instead, solely to the lease hold interest held by the tenant.

The question then becomes what would be the value of the lease hold interest.

Depending upon the use of the property by the tenant, the lease hold interest could be quite valuable, or it may be close to worthless. Obviously, if the tenant is fully invested in the property the lien claim may carry substantial value, as it may force the tenant to satisfy the claim. Then again, if the lease hold interest is solely an office or two within a commercial property the lien claim may not possess significant value.

The above provides a general overview as to a lien claim on a commercial property which is occupied by a tenant. It is suggested, as a contractor or supplier, that you have the owner sign off for improvements. This gives you greater leverage when attempting to collect on a lien claim, and also, could force the sale of the property to satisfy same.

This post was written by Paul W. Norris of STARK & STARK.,COPYRIGHT © 2017
For more Construction & Real Estate legal analysis, go to The National Law Review

California Supreme Court Rules Homeowners Forfeited Right to Challenge Coastal Development Permit Conditions By Undertaking Work Authorized By Permit

The California Supreme Court ruled on Thursday in Lynch v. California Coastal Commission that two homeowners who obtained a coastal development permit (CDP) from the California Coastal Commission (Commission) to construct a new seawall forfeited their right to challenge mitigation conditions attached to the permit because they accepted the benefits conferred by the permit by undertaking the work authorized.

Key procedural takeaway: With exceptions noted below, if a permit applicant accepts a proffered CDP and acts on that permit – even while expressly reserving its asserted right to challenge the legality of the permit – the permittee has forfeited its right to subsequently challenge the permit in court.

Key takeaway on the merits of the claim: None. Since the Supreme Court ruled that the permittees had forfeited their right to challenge the CDP by undertaking the authorized construction, it found no need to address the underlying merits of the permittee’s challenge. In particular, the Court left unaddressed the contention that the mitigation conditions were unconstitutional, including the condition that limited the life of the seawall to 20 years unless reauthorized at the end of the term.

Homeowners Challenge CDP Conditions

The homeowners, Barbara Lynch and Thomas Frick, sought a CDP (more precisely, an amendment to the 1989 CDP authorizing construction of the existing seawall) to authorize demolition of an existing seawall, construction of a replacement seawall and rebuilding of a lower stairway providing access from the bluff to the beach. The Commission granted the CDP allowing seawall demolition and reconstruction but imposed several permit conditions.

The homeowners filed an administrative writ petition in superior court challenging the following three permit conditions: (1) a prohibition on reconstruction of the lower stairway; (2) a 20-year expiration period on the seawall permit and a prohibition on relying on the seawall as a source of geologic stability or protection for future blufftop redevelopment; and (3) a requirement that prior to expiration of the 20-year period, the homeowners must apply for a new permit to remove the seawall, change its size or configuration, or extend the authorization period.

Around the same time, the homeowners recorded deed restrictions on their property stating that the CDP conditions were covenants, conditions and restrictions on the use and enjoyment of their properties, satisfied all other permits conditions, obtained the permit and demolished and reconstructed the seawall.

Lower Court Rulings

The trial court issued a writ directing the Commission to remove the three challenged conditions from the CDP and found that the conditions prohibiting reconstruction of the stairway and imposing a 20-year expiration period were not valid. The appellate court reversed the trial court, determining that plaintiffs had waived their claims and, in any event, both conditions were valid.

California Supreme Court Ruling

Though the Court affirmed the appellate court’s reversal of the trial court decision, it did so on a different basis. The appellate court’s ruling rested on the concept of waiver while the Court found that the homeowners forfeited their right to challenge by accepting the benefits of the permit. The Court explained that forfeiture differs from waiver in that forfeiture results from a failure to invoke a right and waiver denotes an express relinquishment of a known right. The Court identified the crucial point as being that the homeowners “went forward with construction before obtaining a judicial determination of their objections.” By accepting the benefits of the CDP and undertaking the permitted project, the homeowners effectively forfeited the right to maintain their otherwise timely objections.

The Court rejected the homeowners’ argument that because the challenged permit conditions did not affect the design or construction of the seawall, it was possible to challenge the conditions while the project was being built. Such a rule, the Court said, would effectively expand the Mitigation Fee Act (Gov. Code, §§ 66000 et seq.), which establishes a procedure for developers to proceed with a project and still protest the imposition of “fees, dedications, reservations, or other exactions.” Not included in this list, however, are land use restrictions. The Court stated that only the Legislature has the power to declare that permits may be accepted and acted upon, even while the underlying land use restrictions imposed as a condition of that permit are being challenged in court.

The Court did note that there are potential remedies available to permit applicants. Responding to the homeowners’ protest that imposing a forfeiture under the circumstances present here – where the seawall was in danger of collapsing into the sea thus allowing no time to delay repairs until resolution of the litigation – the Court offered two solutions. First, property owners can address imminent dangers by obtaining an emergency permit from the Commission under Public Resources Code section 30624. Second, property owners can try to reach an agreement with the permitting agency to allow construction to proceed while a challenge to permit conditions is resolved in court, which the court noted could prevent a finding of equitable forfeiture. Neither remedy appears to have been pursued in this case.

Insights

Developers and property owners should view the unanimous Court’s holding as applying beyond CDPs and should thus proceed with extreme caution when faced with objectionable permit conditions. By refusing to extend the Mitigation Fee Act’s “pay and protest” option beyond fees and exactions, this decision gives permitting agencies leverage to impose potentially controversial permit conditions, knowing that permit applicants are often constrained in terms of time and money when choosing between moving forward with objectionable permit conditions or going to court. Legislative action on this issue could provide some relief, but may not be likely for the foreseeable future.

This post was written by Courtney A. Davis and James T. Burroughs  Allen Matkins Leck Gamble Mallory & Natsis LLP.

The Zoning and Land Use Handbook

The ABA presents The Zoning and Land Use Handbook by Ronald Cope.

zoning land useZoning law has a major impact on the development of our cities and villages, and where we live and work; it also plays a major role in numerous business and real estate transactions. The Zoning and Land Use Handbook is a reference guide for zoning and related land use issues.

This book will help the busy general practitioner answer the most frequently asked questions and provide guidance on basic zoning procedures, property rights, and the nature of zoning litigation. In addition, this handbook provides an introduction to zoning law for land use practitioners, and will be helpful to laypersons and professionals not familiar with land use or zoning law.

Click here to purchase the book.

About the author:

“Ron Cope is the most authoritative and impressive source of knowledge about the legal aspects of land use, urban planning, and zoning. During my 45 years of planning practice, he has remained my go-to expert for every complex issue I have had regarding land use, planning, and zoning law. The Zoning and Land Use Handbook is a must-have resource that condenses Ron’s practical knowledge into a comprehensive guide.”
Allen L. Kracower, Chairman, Allen L. Kracower & Associates, Inc.

“Ron Cope is the dean of Illinois zoning lawyers. He is legally erudite and knowledgeable in all areas of real estate law and combines those with practical common sense.”
— J. Samuel Tenenbaum, Director, Investor Protection Center, Bluhm Legal Clinic, Northwestern University School of Law

Developer-in-Chief: How the New U.S. President May Affect the Construction Industry

construction industryEven before the start of Donald J. Trump’s presidential campaign, the Trump brand was in lights across the nation. From the original Trump Tower in New York City to the Trump International Hotel in Las Vegas, it is a name, a brand and a font recognized by nearly everyone. Long before his inauguration, the new U.S. president had made himself one of the most visible — if not the most visible — real estate developers in the world.

President Trump may be the new commander-in-chief, but he is unlikely to forget his long history in real estate. While the world prepares to learn how his policies will affect the larger economy, real estate developers and contractors are similarly focused on the impact his policies will have on the construction industry. Is the president’s (likely) pro-development stance cause for excitement in real estate circles, or is caution warranted? In the following, we explore subsets of the construction industry and the potential impacts of the new administration on these sectors and issues.

An additional note: It is no exaggeration to state that Mr. Trump’s presidency and many of his official actions, to date, have been contentious. Our goal is to provide a clear-eyed and nonpartisan review of the new President’s possible initiatives.

Infrastructure

The nation’s infrastructure was a major talking point for both candidates during the presidential campaign. There is no doubt it is aging and requires investment. So perhaps it was no surprise that Mr. Trump had something to say about infrastructure investment during his acceptance speech on the Wednesday after the general election:

“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none and we will put millions of our people to work as we rebuild it.”1

This is a statement that will likely excite many contractors. It also appears to be a strategy that will build on former President Obama’s policies. It was estimated that the controversial American Recovery and Reinvestment Act of 2009 (a.k.a. the Recovery Act or “stimulus package”) would ultimately cost $831 billion between 2009 and 2019, the bulk of it consisting of investments in infrastructure, education, health and renewable energy.2 Mr. Trump has estimated that projects launched under his direction will inject $1 trillion into infrastructure investment using federal tax credits to generate private-sector involvement.3

Republicans who often opposed Mr. Obama’s infrastructure spending may now be reluctant to support Mr. Trump in similar efforts. Private-sector involvement may be key to overcoming Republicans’ prior reticence to spend government money or increase taxes. However, if the private-sector involvement turns out to be illusory, his plans may be stymied by Congress (regardless of which party is in control).

Single-Family Homes

The Obama administration was effective in reducing risk in lending practices and protecting consumers via the Dodd–Frank Wall Street Reform and Consumer Protection Act.4 It also helped homeowners in difficult financial situations refinance their mortgages through the Home Affordable Refinance Program (HARP).5 As a result of affordable mortgage rates, employment gains and income improvement, the single-family home industry has steadily recovered from the recession.6

Despite this, homeownership — which was 63.5 percent during the third quarter of 2016 — is at its lowest level since the 1960s.7 Constraints do not appear to be on the demand side of the equation; they are on supply, where builders are faced with shortages of lots, labor and lending.

Since demand is high, this may be an area in which the new administration can affect the single-family home industry. Mr. Trump has said, “No one other than the energy industry is regulated more than the home-building industry. Twenty-five percent of the cost of a home is due to regulation. I think we should get that down to about two percent.”9 

Mr. Trump has also made clear his affinity for the residential real estate industry, noting that his father was a home builder: “A home builder taught me everything I know. There is no greater thing you can do. If you can build a home, you can build anything.”10

Taken at face value, Mr. Trump’s statements made on the campaign trail paint a positive picture. Combined with the current state of the industry, it may provide his administration with the opportunity to spur new-home construction. As of this publication, however, no clear blueprint for the industry has been put forward.

Energy

Mr. Trump believes the energy industry is the most heavily regulated industry in the nation. And his stated goals for deregulation will likely affect this industry, as well.

The Obama administration invested heavily in renewable energy.11 Mr. Trump, on the other hand, has appointed several cabinet members with strong ties to oil and gas, and he has been abundantly clear in his support for coal. Does this spell dire straits for the renewable energy industry?12

The answer to this question is, as yet, unclear. At a campaign rally in California, Mr. Trump told supporters, “I know a lot about solar — I love solar. Except there’s a problem with it. It’s got a lot of problems with it. One problem is it’s so expensive.”13 Whether he is correct in his assessment is one question. Whether he will invest in solar power to bring its deemed high price down or  scrap the tax credits the industry relies on is a separate — and still outstanding — question altogether.14  If Mr. Trump does cancel the tax credits, some analysts expect that the industry will turn to the U.S. states or even overseas for the subsidies it relies on.15

Mr. Trump’s prior claims that climate change is a hoax perpetrated by the government of China may suggest where he stands on this issue; if taken at face value, it may indicate that he is less likely to promote the renewable energy industry and more likely to defer to advisors with interests in oil and gas. However, some believe that the industry has sufficient momentum to maintain itself. Economics, instead of presidential policy, are now the driving factor behind the industry and, with companies already investing billions of dollars in renewable energy, the momentum may be too great for Mr. Trump to have a meaningful effect.16 He may not promote it, but he may not be able to stop it, either.

In the more traditional energy sectors, oil and natural gas have seen an increase in production over the past decade as a result of better fracking technology, despite efforts by the Obama administration to slow down the extraction of resources via this controversial method.17 The Trump administration is expected to open up federal land, previously identified by the Obama administration as off limits, for oil and gas production.18 If this becomes the case, the result will likely be a boon for the industry and any construction that comes with it.

Environmental

Environmentalists are preparing for battle against the Trump administration. But how will the president’s perceived negative attitude towards environmental regulations affect the construction industry? Deregulation would no doubt make real estate development less expensive and, therefore, easier and more appealing. And if Mr. Trump opens up federal land for oil and gas production, against environmentalists’ wishes, construction will likely accelerate.

Construction Costs

On the campaign trail, Mr. Trump discussed some of his potential stances on foreign policy, including trade policy and immigration. With respect to trade policy, he has indicated that the United States should withdraw from the Trans-Pacific Partnership (TPP) and renegotiate — or even withdraw from — the North American Free Trade Agreement (NAFTA).19 If these new policies impede trade or place more control on imports, materials prices may increase.20 

Mr. Trump has taken a similarly hard stance on immigration, repeating his plan to erect “an impenetrable physical wall” on the border with Mexico and issuing an executive order limiting entry into the United States of people from certain countries.21 While the latter order is currently less likely to play a role in the construction industry, the former may have a significant impact. Labor is already at a premium and, in an industry that relies heavily on a foreign-born workforce, strict immigration policies may raise wages and increase the cost of construction.22

As with all of the issues listed previously, the construction industry must take a wait-and-see approach to the effects of Mr. Trump’s foreign policy stances. Legal and illegal immigration were strong, regular themes during his campaign and surprises are unlikely in this area, in particular.

Conclusion

It is possible that some of Mr. Trump’s policies and promises will become a boon for the construction industry. Deregulation may reduce project costs and increase the availability of funding for homebuyers and contractors alike.23 Tax cuts for the wealthy may mean that there will be more money to build projects.24 And his promises to spend large amounts of money on infrastructure could result in a flood of projects for contractors.25 

But if Mr. Trump follows through on his immigration policy, the current labor shortage will likely get worse and the costs of available labor will increase.26 Similarly, strained relationships abroad may increase the cost of materials.27

There is certainly reason for hope that Mr. Trump’s real estate experience will spur growth in the construction industry. Although he  has an opportunity to effect significant change,  we may have to wait for several years to see how his policies ultimately reshape the construction industry.


1 Donald Trump’s Presidential Acceptance Speech
2 Recovery and Reinvestment Act of 2009
3 Donald Trump Infrastructure Spending
4 Dodd-Frank Wall Street Reform and Consumer Protection Act
5 Home Affordable Refinance Program
6 Home Sales Estimates Historically Soft
7 Ibid.
8 Key Takeaways From the Latest Housing Market Reports
9 Trump Vows to Cut Burdensome Regulations in Address to Home Builders
10 Ibid.
11 Obama Has Done More for Clean Energy Than You Think
12 Renewable Energy Sector Remains Optimistic Amid Trump Policy Outlook
13 Ibid.
14 Ibid.
15 Ibid.
16 Economics Will Keep Wind And Solar Energy Thriving Under Trump
17 Trumps Energy Policy 10 Big Changes
18 Ibid.
19 Donald Trump Trade Policy
20 How Will Trump Affect the Construction Industry
21 Donald Trump Immigration Policy
22 How Will Trump Affect the Construction Industry
23 Ibid.
24 Ibid.
25 Ibid.
26 Ibid.
27 Ibid.

Real Estate Promoter Carlton Cabot Arrested – Is He the Worst Fraudster in Modern History?

The name Carlton Cabot was once synonymous with tenant in common (TIC) real estate projects. Cabot claimed to have raised hundreds of millions of dollars and public records show that he promoted approximately 18 large real estate projects nationwide.

The entire concept of TIC financed projects began in 2002 after the IRS issued a revenue ruling allowing investors to defer capital gains from the sale of real estate involving an “exchange” of properties. (These are sometimes called 1031 exchanges because of section 1031 of the Internal Revenue Code.) For the first time, the IRS said individuals could pool their gains and invest in larger projects.

Unfortunately, along with legitimate developers came a number of scam promoters. Overnight, a new industry was born. Obviously, not all TIC projects are scams but many were.

The first few years of operations saw Cabot building his empire. A golf course in Georgia, a shopping center in Green Bay and an office park in Connecticut are but a few of Cabot’s many TIC financed projects.

The pooled money of the newly created TICs was used to make a down payment and the balance was financed. The borrowers were the TICs but most were told the loans were nonrecourse meaning the lender was only looking to the value of the property and not relying on the TIC members’ credit.

Unfortunately, stockbrokers who had no understanding of the complex loan documents and tax law behind 1031 exchanges sold many of these TIC investment interests including the TIC interests behind Carlton Cabot’s projects. The brokers relied on rosy projections and glossy brochures and other slick marketing materials. Few, if any, read the 1000+ page offering documents. Much higher than average sales commissions didn’t hurt their enthusiasm, either.

Two more factors made these TIC projects the recipe for disaster. First, Carlton Cabot was the master tenant in each of the projects. That gave him the ability to collect rents on behalf of the TICs. Cabot also set up the loan documents so that the mail addressed to the TIC investors was sent to him.

By 2012, we believe that Carlton Cabot was skimming rents. Mortgage payments therefore began being missed. Had the TIC investors known these things, they could have easily cured any default and removed Cabot as the master tenant. Many of the projects had sufficient reserves that could have been used to pay a missed mortgage payment or two.

Unfortunately, Cabot didn’t tell the TICs about his misdeeds. Nor did the lenders, loan trustees or loan servicers. Instead, the TICs often received phony financial statements from Cabot. Even though defaults were occurring everywhere, the TICs had no idea.

By the time the TICs found out, the loans had been accelerated and were in serious default. The TICs went from being investors to owing tens of millions on defaulted mortgages.

The criminal complaint against Carlton Cabot and his manager Timothy Kroll claims that $17 million was stolen from the projects. The feds say some of that money went into Carlton Cabot’s pocket while some was used to pay off and silence the few investors who were beginning to ask questions. We are sure that the money wasn’t going to the mortgage payments, however.

Theft of $17 million is already a serious charge. Because the TICs were forced into default, the problem is much larger. The TICs lost not only the rent payments but also their equity in the property and their investments. For many Cabot victims, the money they lost was their life savings. Worse, they may still be on the hook for any shortfall or deficiency upon foreclosure.

Many of the investors are also quite elderly. Some have died since the various lawsuits began. For those folks, they will never see any justice. The Justice Department says both Carlton Cabot and Timothy Kroll were arrested at their homes. Both men are charged with seven felony crimes including wire fraud, securities fraud, money laundering and conspiracy. Both men face 105 years if convicted on all counts.

We suspect that absent an immediate plea, the charges will increase as the IRS and U.S. Postal Inspection Service continues its investigation.

In announcing the arrests, U.S. Attorney Preet Bharara said, “As alleged, Carlton Cabot and Timothy Kroll conspired to defraud investors out of millions of dollars by misappropriating investor funds, in part to pay for personal luxuries, and they falsified financial statements in an attempt to cover their tracks.  The investigative work of the Postal Inspection Service and the IRS put an end to the alleged scheme.”

Is there hope for investors? Maybe. Investors who purchased from a stockbroker or other financial professional may have a claim against the person who sold or recommended the investment.

Unfortunately, there was such a wave of TIC frauds that many of the broker dealers selling TIC investments are already out of business.

Investors facing foreclosure or the lost of their investment may have valid claims against the servicers, loan trustees, property managers and others who turned a blind eye or actively participated in the crimes. Suing Carlton Cabot is probably not a great idea. We suspect that getting money from him is nearly impossible. Any justice from Cabot will be had if he is convicted and forced to face his victims at sentencing.

In summary, what was once billed as the investment of a lifetime has turned into a life sentence for many victims.  Even if you lost everything, don’t give up. A good fraud recovery lawyer may be able to help defend you against suits from lenders and may even be able to get back some of your lost money from third parties.

ARTICLE BY Brian Mahany of Mahany Law
© Copyright 2015 Mahany Law

What You Need To Know: Boston and Cambridge Energy Use Disclosure Ordinances

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On July 28, 2014, Cambridge, Massachusetts enacted an energy use disclosure ordinance, joining Boston and several other cities.  The Cambridge ordinance is similar to its Boston counterpart, but contains several differences.  Property owners in each municipality should be familiar with these ordinances.

1.  Properties Covered By Each Ordinance

Cambridge:

  • Municipal buildings of 10,000 square feet or larger;
  • Non-residential buildings of 25,000 square feet or larger; and
  • Multi-family residential buildings with 50 or more units.

Boston:

  • City buildings (those the City owns or for which the City regularly pays energy bills);
  • Non-residential buildings (those located on a parcel of land with one or more buildings of at least 35,000 square feet and of which 50% or more is used for non-residential purposes, and which are not City buildings); and
  • Residential buildings (i) (a parcel with one or more buildings with 35 or more dwelling units that comprise more than 50% of the building, excluding parking, or (ii) any parcel with one or more buildings of at least 35,000 square feet and that is not a City building or a non-residential building, or (iii) any grouping of residential buildings designated by the Commission as an appropriate reporting unit).

2.  Obligations of Owners and Tenants of Covered Properties

Both ordinances broadly defined “Owner” to include owners of record or a designated agent, and net lessees for a term of at least forty-nine years.

Cambridge:

No later than May 1st of each year, all covered properties must disclose energy consumed by such property during the prior year, together with other information required by an EPA Benchmarking Tool:  (i) address; (ii) primary use type; (iii) gross floor area; (iv) energy use intensity; (v) weather normalized source energy use intensity; (vi) annual greenhouse gas emissions; (vii) water use; (viii) energy performance score; and (ix) compliance or noncompliance with ordinance.

Tenants (those who lease, occupy, or hold possession) of a covered property must comply with an owner’s request for information within thirty days or risk a fine.

Boston:

No later than May 15th of each year, owner of each covered non-city building shall accurately report previous calendar year’s energy, water use, and any other building characteristics necessary to evaluate absolute and relative energy use intensity of each building through Energy Star Portfolio Manager.

Owners must request information from tenants separately metered by utility companies in January for the previous year, and tenant must report information to owner no later than end of February, though a tenant’s failure to respond does not relieve an owner’s duty to report.

Enforcement and Penalties

Cambridge:

Failure to comply with the ordinance or misrepresentation of any material fact may result in a written warning on the first violation, and a fine of up to $300 per day for any subsequent violation.

Boston:

The Air Pollution Control Commission may issue written notice of violation, including specific delinquencies, to those failing to comply, giving thirty days within which an owner may cure the violation or request a hearing.  The Commission also may seek injunctive relief requiring an owner or non-residential tenant to comply with the ordinance.

Boston provides a sliding scale fine schedule for failure to comply with a notice of violation, depending on the type of property, which ranges from $35 per violation up to $200 per violation.  Each day of noncompliance is a separate violation, but owners or non-residential tenants may not be liable for a fine of more than $3,000 per calendar year per building or tenancy.

Both cities are actively developing programs to address climate change and adaptation.  Property owners should monitor these efforts as well as similar initiatives by federal and state agencies.

ARTICLE BY

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“Is this the airport, Clark?”: Home Owner's Associations and Holiday Decorations

McBrayer NEW logo 1-10-13

Your guests have arrived and you’ve just spent that last ten hours Griswolding your home and now you and your company are standing in the front yard ready to bask in the warm glow of a million tiny lights, when your neighbor strolls over and says, “I wouldn’t do that. The homeowner’s association won’t allow it. Oh, and you can’t park there.” What? But you nearly died placing those reindeer on the roof! And where are all these people supposed to park??

Holiday Lights

Beloved by some, and loathed by others, homeowners associations or HOAs seem to be misunderstood and ubiquitous these days. If you live in a community subject to a homeowners association or are thinking of moving into one that does, it’s a good idea to get a lay of the land before you make your move…or try to clamber up on the roof with those reindeer.

Some things to think about are:

  1. Have you read a copy of the rules and restrictions?

  2. Does the homeowners association require advance notice or written approval for certain activities?

  3. Are there parking restrictions that could lead to trouble for you or your guests?

  4. Are there any limitations about the type of signage or decorations you may display in your yard? Must signs or decorations be approved by the HOA in advance?

  5. Are there any provisions prohibiting special activities in or around your home (i.e., no burning the yule log out back)?

  6. Are you subject to possible fines for non-compliance?

By understanding in advance what sort of things may and may not be allowed, homeowners or potential homeowners can reduce the possibility of misunderstandings and disputes that can arise from some of the activities we are often accustomed to doing without a thought. You can’t always control whether you live next to the Chesters, or the Griswolds for that matter, but you can at least understand your rights.

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