The Real News

March, 2018
Fake HOA Files Real Liens

Tony Navarro, a resident of Missouri, was told by his neighbors to ignore the HOA invoices he receives in the mail. He was told the invoices are a scam, and the neighborhood does not have an HOA. However, right before Christmas last year, a $445 lien was filed against his property, as well as over 30 of his neighbors. The lien claimed it was because he didn't pay his dues to the Summerfield Homeowners Association (SHOA). SHOA has no board and provides no services.
People called the phone number listed for SHOA. Instead of a company, they get a person unfortunate enough to have his phone number stolen. He's been getting calls for over five years from people demanding SHOA stop sending them invoices. He has no association with SHOA, and probably wishes they'd stop more than anyone else so he can stop receiving so many phone calls.
There is no law in Missouri against filing a fake lien. It's becoming a major problem and people are looking to enact legislation making it a felony. It's easy to file a fake claim. The Recorder's Office of each county claims they do not have the manpower to verify the legitimacy of each claim. They receive the document, verify it's filled out correctly, and file it. This is true in most states throughout the country as well. In California, for example, the Recorder's office is required to file a document presented to it for recording as long as it meets all the legal requirements of a validly recordable document irrespective and without verifying the accuracy of the contents.
Homeowners in Summerfield enlisted the help of the local news station, FOX4 Problem Solvers. Problem Solvers contacted Karen Sue Lovell. She is the person who filed the liens and is listed as the manager of SHOA. She wouldn't open her door, and speaking behind a window of her home, she stated she had no comment. Lovell's attorney sent a letter to Problem Solvers stating that Lovell believed there should be an HOA to pay for the upkeep of the lot containing the neighborhood's drainage basin. It's an odd request, since she doesn't live in in the Summerfield neighborhood. Instead, she lives far away in the town of Independence.
Problem Solvers caught up with the second person behind SHOA, Al Roberts. Roberts is a retired Kansas City school teacher and he formed the company behind SHOA. He is also the individual who sent out the initial invoices. Roberts was very difficult to reach, since he's currently living in federal prison. He was convicted of $3 million in mortgage fraud. A relative of Roberts claims he's still running SHOA from his prison cell. The attorney representing SHOA denies that claim.
The good news is the liens have been dismissed. The bad news is there is currently nothing preventing new fake liens being filed.
Case of the Month
Irena Hauser v. Ventura County Board of Supervisors

Irena Hauser applied for a conditional use permit (CUP) to house her five cats. The Ventura County Planning Commission and Board of Supervisors denied her request. So, she sued them, and lost at the trial court. Not to be swayed, she then appealed the trial court's decision. Oh yeah, and by the way, her five cats are full grown tigers. And her 19-acre property is located in an unincorporated area of Ventura County, California near the City of Malibu. Five tigers caged up within a half-mile of 57 residential lots, 28 of which are occupied and 46 homes within one mile from the project...what could possibly go wrong?

In her CUP application, she stated that Hauser and her sister both completed an 8-day training course on animal husbandry, safety, and training. What she failed to mention was, according to the training company's website, "There is no written exam nor any reading necessary for completing this course. All students receive Certificates of Completion." She also included that a family member would be present on the property at all times. The County noticed that only two of them received training, so how does having other family members present, that have no training whatsoever, reduce the risks?

Hauser uses the animals in the entertainment industry. They have been used in movies, commercials, and still photography. The plan was to transport the animals to locations using a sport utility vehicle or truck up to 60 times per year. The neighbors are not as excited about this plan as Hauser is. They presented a petition containing 11,000 signatures opposing the CUP.

Hauser made several arguments in her favor during the trial. The appellate court noted that the trial court did not have an obligation to view the presented argument as favorably as Hauser does. She argued that Ventura County never established a cutoff point for residential density for areas allowing tigers. The courts agreed that it is clearly a residential area and no cutoff point needs to be determined. She argued her property is an "open space". However, she failed to prove how the open space designation applies to a "tiger compound". Hauser argued there are other locations with higher population densities where tigers are kept. The courts pointed out that each situation has to be analyzed separately. Opponents mentioned the unfortunate circumstance when a tiger escaped from its enclosure at the San Francisco Zoo, killing one person and mauling two others. The enclosure at the San Francisco Zoo is much more substantial than the one proposed by Hauser. The opponents also discussed the situation where a highly experienced Las Vegas entertainer was mauled and nearly died from the experience. Both situations included better facilities and better trained people, yet bad things still happened.

Hauser claimed the Board denied her appeal because no matter how safe the proposed facility would be, no one can completely eliminate the possibility of human error. She included in her argument, "Impossibilium nulla obligatio est.", meaning that there can be no obligation to do the impossible and removing all probability of human error is impossible. The appellate court remarked that they are more impressed by the Latin than the argument. No one is obligating Hauser to do the impossible. In fact, the Board's decision does not obligate Hauser to do anything. Her argument, instead, shows that her neighbors must bear the risk of her inability to avoid human error. Her well-intentioned desire to own tigers does not trump her neighbors' right to safety and peace of mind.

Hauser also tried another tactic. She claimed the public hearings were not fair because several board members conducted meetings with several neighbors voicing complaints outside of the public hearing. However, each private meeting was disclosed during the public meeting, which is in compliance with policy. Hauser also met privately with several board members. So, she was complaining about the same action she herself took part in. The courts rejected this argument as well.

The appellate court ruled that Hauser received a full and fair hearing which covers over 3,340 pages of administrative record. Hauser failed to provide any evidence that her project was denied for any reason other than its own merits. The judgment is affirmed. The residents of Ventura County can rest easy that there are no tigers moving into their neighborhood anytime soon.
How does the Federal Budget Deal Impact Real Estate?

The Federal Budget Deal that was signed by President Trump on Friday, February 9, 2018 included some very positive items for the Real Estate Industry. These "wins" include a temporary extension of federal flood insurance, tax provisions that include relief from debt forgiveness that was backed by the National Association of Realtors (NAR), several energy-efficiency related provisions, and continued mortgage insurance premiums deductibility.

The National Flood Insurance Program was extended until March 23, 2018. This gives lawmakers more time to work on a longer-term reauthorization and reform legislation. This adds $27 billion in mitigation and resiliency funds to help with the issues from last year's hurricanes. This also makes $12 billion available for the Community Development Block Grant (CDBG) program which funds the U.S. Army Corp of Engineers flood mitigation projects.

The Federal Budget Deal includes three major tax extensions for the 2017 tax year. There is a Mortgage Debt Forgiveness provision. This prevents homeowners who were forced to sell their homes through a short-sale during 2017 from being taxed on what's called "phantom income" resulting from the lender cancelling their debt. This applies to foreclosures as well. There is also a Deduction for Mortgage Insurance Premiums provision. This provision allows an estimated four million homeowners to deduct the mortgage insurance premiums they pay as part of their mortgage. The goal is to make homeownership more affordable for first time and entry-level homeowners. Finally, there is a provision for Energy Efficient Commercial Buildings deduction. This provision extends the deduction for the costs of energy-efficient commercial building properties, up to $1.80 per square foot.

In addition to the three major tax extensions listed above, there are three minor extensions for the 2017 tax year. The Nonbusiness Energy Property Credit allows for a 10 percent deduction for qualified energy efficiency improvements (windows, skylights, doors, etc.) and a 100 percent deduction for qualified energy property (water heaters, air conditioners, furnaces, etc.) for the taxpayer's principal residence. The Residential Energy Efficiency Property Credit extends the temporary components of the section 25D residential energy property credit for fuel cells, distributed wind property, and geothermal heat pumps. The Credit for Energy-Efficient New Homes extends the credit ($1,000-$2,000) for the construction and sale of qualified new energy-efficient homes.

Upcoming Speaking Engagements

March 15 - Desert Escrow Association Dinner Meeting

March 21 - Conejo Simi Moorpark Association of Realtors Lunch and Learn

March 24 - Escrow Training Institute - RESPA Do's and Don'ts ETI Class Schedule Link



Jennifer Felten, Esq., Principal & Editor
(805) 265-1031 
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