Thursday, April 30, 2009

Developer (Mis)representations

One of the three primary areas of developer liability in community association development and operation is representation made about the nature of the project (the other two being construction defects and association operation). In simple terms, when someone reasonably relies upon what you say and takes – or refrains from taking – action based upon that reliance, you can be bound by what was said and the consequences of those actions. It does not matter that the person making the representation is not a principal in your company if, as an agent or employee, he or she has the apparent authority to speak for the company.

In these troubled economic times, potential buyers as well as existing owners will have questions about your development and the effect of the economy on development plans and the construction timeline. They will also be concerned about the completion of amenities, any operational changes, and changes in marketing strategies. It is important to have a "communication strategy" and to stick to it throughout these periods of uncertainty.

Thursday, March 12, 2009

Federal Law Imposes New Requirements on Community Pools

The Virginia Graeme Baker Pool and Spa Safety Act, 15 U.S.C. § 8001 (the "Act"), which regulates the safety of public pools and spas, went into effect on December 19, 2008. The Act regulates "public" swimming pools and spas, including privately owned community pools and pools owned or operated by a homeowners association, condominium association, apartment building, or other residential real estate development.

As of December 19, 2008, all public pools and spas must have drain covers that meet the American National Standards Institute and American Society of Mechanical Engineers A112.19.8-2007 standard on every drain and/or gate. If the pool or spa does not have these drain covers, it must close immediately. A list of drain cover manufacturers can be found at the Consumer Product Safety Commission's website:

In addition, if the pool has a single main drain (other than an unblockable drain), the operator must either disable the drain or install a second anti-entrapment device or system. This can take the form of an automatic shut-off system, gravity drainage system, Safety Vacuum Release System, or suction-limiting vent system. If a pool has dual or multiple main drains more than three feet apart, it may be exempt from this second requirement. Pools and spas with single main drains that are unblockable are also exempt from this requirement. A list of SVRS manufacturers can be found at

The Consumer Product Safety Commission has issued technical and legal interpretations of Act, which can be found at

Tuesday, February 17, 2009

Keeping Homeowners Informed, Part 2: Protecting Your ASSets

This is a follow-up to and expansion of a previous post, Keeping Homeowners Informed and Happy. Ensuring that homeowners are aware of developer decision-making and even developments in the actual planning process is not just an admirable goal for developers; in a time of economic recession, rising foreclosures, and mounting homeowner unease, it is a vital necessity. Developers concerned about lowering their risk and minimizing their liability in an environment of change and upheaval should communicate to homeowners not only regarding decisions involving the board of directors or homeowners directly, but also regarding planning and development decisions such as reducing density, the size of units, and price points. Although owners may have no direct say in any of these decisions, keeping them informed of the issues, considerations, options, and possible outcomes facing developers will go a long way toward enhancing developer-homeowner cooperation, building trust, and reducing developer exposure to unhappy residents in these uncertain times.

If you have any questions about how to keep homeowners in the loop on a regular basis, or how to navigate communications with homeowners generally, please contact us. As always, questions and comments are encouraged and greatly appreciated.

Friday, February 13, 2009

Hyatt & Stubblefield and CSOs featured in Houston Business Journal

Today’s Houston Business Journal features an article by Teresa Talerico entitled Building Roots into the Master Plan. The article discusses the creation and success of community stewardship organizations, or CSOs at Telfair and Ladera Ranch, two communities in Sugar Land, Texas, and Orange County, California, respectively. Both of these communities were developed with the help of Hyatt & Stubblefield. As noted in the article, “these social and philanthropic nonprofit organizations complement traditional homeowners’ associations, or HOAs. While HOAs handle deed restrictions and other matters, CSOs can enhance quality of life for residents and foster a greater sense of neighborhood — both inside and outside the community.” If you have any questions about CSOs or would like information on how we can help you establish CSOs, or what CSOs can do, please do not hesitate to contact us. We’re more than glad to help.

Jo Anne Stubblefield is quoted in the article.

Thursday, February 12, 2009

Renters Are Your Friends

Renters have long been perceived and treated, rightly or wrongly, as negative forces within a community. Because of anticipated problems relating to property maintenance and upkeep, the behavior of renters generally, and the negative impact of rentals on property values in the community, many communities have included provisions in their governing documents which limit or prohibit rentals in the community. The secondary mortgage market also has contributed to this perception of rentals by encouraging owner-occupied communities.

Given the current economic and housing downturn, it is appropriate for communities to rethink such strict restrictions on rentals. Permitting renters in a community may help financially, by allowing non-occupying owners to pay assessments. Also, people occupying units or homes in a community, whether as renters or owners, creates a vibrancy within the community that, ironically, may help stabilize or increase values. As such, while targeting the negative behavior associated with renters should remain a priority, loosening restrictions on rentals within the community may provide some short or long term assistance in distressed environments.

Now is the time for communities to analyze their governing documents and their practices to determine whether policies and provisions relating to renters are appropriate in this environment and to consider how to encourage responsible renting while continuing to discourage the negative behaviors associated with rentals. Please contact us to discuss this. We would be happy to help.

Keeping Homeowners Informed and Happy

During tough economic times, while it may prove necessary to reduce operating costs by, for example, limiting access to amenities or even shutting them down altogether, it is also imperative that the association keep homeowners informed throughout the decision-making process. Although excluding homeowners from decision-making may seem like the easiest, most conflict-free way to go, overlooking homeowner opinion may turn out to be the worst possible course of action, as angry homeowners may react very strongly and negatively to such lack of communication and involvement. Keeping owners informed is your best bet to limit conflict and your legal exposure in a weak economy. Who knows? As homeowners themselves retrench and tighten their own budgets, they may be able to come up with creative ideas and solutions to help the association survive the recession as well.

Tuesday, January 27, 2009

A Timely Announcement for Developers, Lenders, & Fellow Lawyers

As the economic and housing downturn has gotten worse, many real estate developers and developments have fallen into distress due to the lack of sales, inadequate or dysfunctional community association governance, and potential liability issues arising from construction, representations, operations, or other causes. These problems can be quite significant as lenders seek to operate and reposition projects, as successors seek to revitalize a development, or as the original developer tries to make the project ultimately work.

Community association law in all its variations is our fundamental area of practice. Over the years, we have worked with developers not only in creating and operating hundreds of new condominium and homeowner associations, but also helping to restructure and reposition distressed projects. Many of our clients have welcomed simple, straight forward assistance such as a day or half-day "tutorial" on community association governance and addressing homeowner concerns. We are also genuinely interested in working together with homeowners themselves to make them part of a viable solution rather than a permanent part of a growing problem.

Our national practice has provided us with an extremely deep and well-equipped "tool box" of ideas and approaches and an awareness of what works and what perhaps might not. Over the coming weeks and months, we will use this blog to discuss lessons we have learned and ideas we have gleaned from over three decades as leaders and innovators in community association law. We hope you will find this information useful, and we look forward to receiving any feedback or questions you may have for us.

Publication of New Article: Practical Issues in Planning for Age-Restricted Housing under the Housing for Older Persons Act (HOPA)

Associate Marian Black and shareholder Jan Bozeman authored the recent article “Practical Issues in Planning for Age-Restricted Housing Under the Housing for Older Persons Act (HOPA)” published in the January/February 2009 issue of Probate & Property, a publication of the Real Property, Trust and Estate Law Section of the American Bar Association. The article discusses practical issues and potential pitfalls for developers of age-restricted communities, such as distinguishing business strategy from marketing strategy, disclosing age restrictions, selling into the “20% buffer,” defining “occupancy,” and taking account of state and local laws. Members of the Real Property, Trust and Estate Law Section of the ABA can access the article directly here, or you can contact us directly for a copy.