Handout at Board Meeting Regarding Approval for FHA Loans

   

Below is the handout I plan to use at our next Board of Directors meeting.

Comments by Paul Rasmussen, Unit 305, to Board of Directors 23 October 2014 regarding

FHA Loan Approval Cons and Pros

Is approval of our Market Street at Town Center Condominium for low-down-payment FHA loans in the best interests of us unit owners?  This is a question that our Board of Directors must answer within a few years, when our percentage of owner-occupied units again exceeds 50% as required to obtain FHA approval.  We unit owners may want to consider the issue before our Board must decide whether to apply for FHA approval for our Condominium. 

I raise this question because I know of one condominium in our 20190 zip-code where the board of directors voted unanimously NOT to seek renewal of its approval for FHA loans, even though it appeared to meet all criteria for FHA approval.  At the FHA web site, you can see a listing of  the condominiums in our 20190 zip-code that have received FHA approval--including those for which that FHA approval has expired.* 

Why might a condominium board of directors decide NOT to seek FHA loan approval?  It could be because a relatively high percentage of FHA buyers might need to lease their unit after a relatively few years of ownership.  I discussed this potential problem in May 2013 in a post on Bob Babcock's leasing-bylaw-amendment blog.* 

Fortunately, our amended leasing bylaw provides our Board of Directors "discretion to grant an exception and permit the Unit Owner to lease their unit due to Hardship," thereby possibly preventing some units from going into foreclosure.  But every hardship exception the Board grants extends the time required to increase our owner-occupied percentage to the 65% level required by the amended leasing bylaw.  For more information regarding such "Hardship" exceptions, see Policy Resolution 11-14 and the amended leasing bylaw.* 

Another possible reason some condominium unit owner associations may opt NOT to seek FHA loan approval is to avoid stringent FHA requirements.* 

Having our Condominium approved for FHA loans should increase the number of potential buyers of units in our Condominium, thereby theoretically increasing the market value of our units.  Also, with a larger pool of buyers, perhaps units currently occupied by tenants will become owner-occupied at a faster rate, thereby moving our Condominium more quickly up to the 65% owner-occupied level. 

If, after considering the pros and cons of FHA approval for our Condominium, you conclude that FHA approval is or isn't in the best interests of  Market Street at Town Center Condominium unit owners, I encourage you to inform our Board of Directors of your opinion. 

         *The asterisks above indicate instances where related information is available on the internet.  To see the above presentation with the links included that take you to that internet information with a tap or a click, please see my post on Bob Babcock's leasing-bylaw-amendment blog.  The easiest way I know to go there is to Google  mstc uoa  to see my post entitled "Useful Links for Unit Owners."  From there, tap or click the link associated with "Bob’s leasing-bylaw-amendment blog."

Note added 28 March 2015 for those of you viewing this post on-line here now:   Click here to go directly to the above presentation that includes the links the mentioned above.

Communication Among Unit Owners

Below are the front and back sides of a handout I plan to use at the 25 September 2014 Board of Directors meeting.  I was motivated to prepare the handout and put up this post by inappropriate--perhaps illegal--restrictions on unit owner communication imposed by the Market Street at Town Center Condominium Unit Owners Association President at the Board meeting 28 August 2014. 

During the "Dialog" session preceding the formal "call to order" of the Board meeting, I started to introduce the question of whether FHA loan approval would or wouldn't be beneficial.  I had spoken for perhaps 30 to 60 seconds when the President interrupted, saying that that wasn't an appropriate topic to discuss.  I said I begged to differ, in that the issue was certainly one that concerned our Unit Owners Association, but she nevertheless barred further discussion of the topic. 

In my post at the following link, I discuss the issue I was forbidden to discuss at that last Board meeting.  http://msa-towncenter.blogspot.com/2014/09/fha-loan-approval-cons-and-pros.html 

The provisions of the Condominium Act I quote on the back side of my handout below can be seen in context at these links:

         http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-79.75

         http://law.lis.virginia.gov/vacode/title55/chapter4.2/section55-79.75:1/

It appears to me that the Association President is (a) unaware of the quoted provisions of the Condominium Act, or (b) misinterpreting those provisions, or (c) willfully violating those provisions.  I view it as unfortunate that any of those three would apply to a Director--or worse, to the Director our Board of Directors chose to be our Association President.


You can see more of my posts regarding communication among unit owners by going to http://mstcuoa.proboards.com/thread/37/communication-unit-owners

Comments by Paul Rasmussen, Unit 305, to Board of Directors 25 September 2014 regarding

Communication Among Unit Owners 

Our Board of Directors currently allows each unit owner a total of three minutes during the "Open Forum"  to comment on any topics listed on the meeting agenda.  The maximum time for allotted for the "Open Forum" is 15 minutes, thereby possibly accommodating as few as five unit owners.  The Board usually doesn't respond to unit owner comments made during the Open Forum until the next monthly Board of Directors meeting. 

In addition to the Open Forum, the Board of Directors provides a fifteen-minute period before the Board of Directors meeting is called to order for unit owners to "Dialog" among themselves and with the Board.  A "three-minutes-per-unit-owner" time limit applies. 

Other than the above-mentioned "Open Forum" and "Dialog" sessions, what  reasonable, effective, and free method, appropriate to the size and nature of our condominium, has our Board of Directors established for unit owners to communicate among themselves and with the Board regarding any matter concerning our unit owners' association? 

Please note that the Board "shall not require prior approval of the dissemination or content of any material regarding any matter concerning the unit owners' association."

 Code of Virginia

Condominium Act

 § 55-79.75.  Meetings of unit owners' associations and executive organ.

D. Subject to reasonable rules adopted by the executive organ, the executive organ shall provide a designated period of time during a meeting to allow unit owners an opportunity to comment on any matter relating to the unit owners' association. During a meeting at which the agenda is limited to specific topics or at a special meeting, the executive organ may limit the comments of unit owners to the topics listed on the meeting agenda. 

§ 55-79.75:1.  Distribution of information by members.

A. The executive organ shall establish a reasonable, effective, and free method, appropriate to the size and nature of the condominium, for unit owners to communicate among themselves and with the executive organ regarding any matter concerning the unit owners' association.

B. Except as otherwise provided in the condominium instruments, the executive organ shall not require prior approval of the dissemination or content of any material regarding any matter concerning the unit owners' association.

Please Correct the Leasing Bylaw Signs

Update added 21 December 2014:  The contradiction discussed in this post has been eliminated.  The signs in the lobby were corrected by replacing "April 7" and "April 7th" with "April 8" and "April 8th" wherever they appeared in the signs.  The signs are now consistent with the amended leasing bylaw.  Correcting the signs by changing the date in this way was simpler than the correction I had suggested.

There are two signs at the concierge’s desk in our Market Street at Town Center Condominium lobby which conflict with the recently-amended leasing bylaw regarding which unit owners are "grandfathered."  For further explanation, please see my post at http://msa-towncenter.blogspot.com/2014/06/signs-conflict-with-leasing-bylaw.html

Section 2 of Article III of our Bylaws includes this sentence:  "The Board of Directors shall have the power from time to time to adopt any Rules and Regulations deemed necessary for the benefit and enjoyment of the Condominium; provided, however, that such Rules and Regulations shall not be in conflict with the Condominium Act, the Declaration or these Bylaws."  I construe those signs in the lobby to be Rules and Regulations which, as such, must NOT be in conflict with our Bylaws.  You can view our Bylaws (including the UNamended leasing bylaw) at http://www.marketstreetattowncenter.com/docs/BylawsV4.PDF

To view the AMENDED leasing bylaw, go to http://www.marketstreetattowncenter.com/docs/Bylaws_Amendment_Leasing.pdf  Ironically, it appears that those signs in the lobby, by conflicting with the amended leasing bylaw, violate this sentence of that very bylaw:  "(ix)  The Board of Directors shall have the right to adopt rules and regulations to carry out and enforce the requirements of these subsections, provided such rules and regulations do not conflict with these provisions."

I fear that anyone who knows what the amended bylaw says and sees those conflicting signs may question the competence--or willingness to comply with applicable requirements--of our Market Street at Town Center Condominium management and Board of Directors.

I have been trying since early May 2014 to get those conflicting signs corrected, first by talking three times with our Property Manager, Sue Carr--even providing her a proposed corrected version of the longer of the two conflicting signs at the time of our third conversation on the issue, in mid-May.  Seeing that the uncorrected conflicting signs had remained in place in the lobby, I pleaded for the corrections directly to our Board of Directors at its 29 May 2014 meeting.  Discussion with Ms. Carr the morning after that Board meeting continued to indicate no intention to correct those conflicting signs, so, on 1 June 2014, I sent a follow-up email to the Board, again making the case for correction of those conflicting signs.  Those conflicting signs are still in the lobby today, which is why I feel it is now appropriate to put up this post.  I am saddened, embarrassed and surprised that getting those conflicting signs corrected has proven so difficult.