What To Expect From Your REALTOR® if You're Buying or Selling An HOA Property

Downtown Long Beach street view

Real estate professionals should encourage prospective home buyers to carefully consider what they’re buying into when they purchase a home in an HOA community. Both condominiums and single family homes/townhouses may be part of an HOA. Many buyers who would like a single family home may find that in the same area, an HOA property may be more affordable for them, so the following should be considered.

Fact: California is one of three states with the most homes under HOAs, 37% of all homes in the state are in HOAs. The other two are Florida (45%) and Texas (20%). Nationally, HOAs represent about 30% of the U.S. housing stock, or over 75 million owners.

REALTORs® Must Disclose:  Sellers, listing agents and buyer agents should disclose if a home is in an HOA community, as this is considered a “material fact” under the REALTOR® Code of Ethics. Agents who are REALTORS® must ensure that buyers and sellers are aware of any facts that could affect their decision to buy, sell or lease, says Deanne Rymarowicz, senior counsel of legal affairs at the National Association of REALTORS®. During the due diligence period of a real estate transaction, if not before, real estate professionals should advise their buyer clients about the existence of a homeowners association and stress the importance of obtaining and reviewing HOA governing documents, she adds. Listing agents should ask their sellers if an HOA exists in their community, as certain information, like monthly or annual fees, special assessments and shared amenities, can be included in the MLS.

Many times a client expects their agent to review and interpret the HOA governing documents, but that would be considered an “unauthorized practice of law,” which violates Article 13 of the REALTOR® Code of Ethics. For example, agents should not interpret an HOA’s CC&Rs, bylaws or budget, Rymarowicz cautions. Instead, agents should advise their clients to consult an attorney with any questions.

An Information source: Real estate professionals can help clients gather HOA documentation and facilitate answers to their questions from sellers, the HOA board or HOA management company. It should be noted that many property management companies respond only to requests from the seller/property owner/Board of Directors, in accordance with contract terms, so that buyers should submit information requests through their own agent, not directly contact the seller or management company. Also, agents should make sure that HOA disclosures and information packets are delivered and received in a timely fashion (in California they are usually provided to the escrow officer for distribution) as some states, such as California, allow buyers to terminate a purchase contract within a certain period. “It’s incumbent on agents to make sure the buyer is aware of any deadline to review information packets so they can make the right determination for them,” Rymarowicz says.

There are many more consideratons about buying into an HOA, including rules about landscaping, monthly fee amounts, security, pets, parking, rental restrictions, insurance, financing, are just some of the features that should be reviewed when considering an HOA purchase. In  California the buyer has a 17-day investigation period in the standard contract to receive and review the governing documents.

 More Information about HOAs:  https://www.doorloop.com/blog/hoa-statistics   - There are now over 363,000 HOAs in the United States, there were about 10,000 in the 1970s.

I have listed and sold many HOA properties, and would be happy to answer your questions, or provide you with additional information about selling or purchasing in an HOA.  Just let me know!

From "Navigating HOA Rules: Considerations for Real Estate Agents, Buyers and Sellers" by Melissa Dittman Tracey, National Association of REALTORS

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Understanding HOA Fees in a Homeowner Association

Houses facing street

When considering a move to a gated community in Long Beach, understanding Homeowners Association (HOA) fees is crucial. These fees are a significant factor in the overall cost of living and play a vital role in maintaining the quality and amenities of the community. They are also factored into a buyer's loan qualification before getting approval. Some HOAs are composed of multi-family style attached units (i.e., Stoneybrook), while others are made up of detached single family residences (i.e., Del Lago).

Multi unit building with balconies

Here’s a comprehensive guide to help you understand HOA fees in Long Beach gated communities.

What are HOA Fees?

HOA fees are monthly or annual payments made by homeowners to the Homeowners Association, which is responsible for managing and maintaining the community common  areas. These fees fund various services, amenities, and community upkeep. Not all the factors listed below will necessarily apply to the association under consideration, there may not be a guard gate, interior roads or a pool. In Long Beach, there are however numerous association which do include many features on the list. It's important to know all the features you may be paying for.

What Do HOA Fees Cover?

HOA fees in gated communities often cover a wide range of services and amenities, including:

1. Security Services

   • 24/7 security personnel
   • Gated entrance management
   • Surveillance cameras and security systems

2. Maintenance and Repairs

   • Landscaping and lawn care
   • Street and sidewalk maintenance
   • Common area repairs (e.g., clubhouses, pools)

3. Utilities

   • Water and sewage for common areas
   • Lighting for streets and common areas

4. Amenities

   • Upkeep of recreational facilities (pools, gyms, tennis courts)
   • Clubhouse maintenance
   • Community events and activities

5. Insurance

   • Insurance for common areas and community structures

6. Reserve Fund Contributions

   • Savings for future large-scale repairs and replacements (e.g., roofing, road resurfacing)

Factors Influencing HOA Fees

HOA fees can vary significantly based on several factors:

1. Community Size and Type

   • Larger communities with more homes often have lower fees due to shared costs.
   • Luxury communities with high-end amenities may have higher fees.

2. Amenities and Services Offered

   • Communities with extensive amenities (pools, fitness centers, golf courses) typically have higher fees.
   • Enhanced security measures can also increase fees.

3. Maintenance Requirements

   • Older communities may require more frequent repairs, leading to higher fees.
   • Communities with extensive landscaping or high-maintenance amenities may have higher costs.

4. Management Style

   • Professionally managed HOAs may have higher fees due to management company costs.
   • Self-managed communities might have lower fees but require active homeowner participation, and the knowledge to self-manage.
     

How Are HOA Fees Determined?

HOA fees are typically determined by the community’s budget, which is developed by the HOA board. This budget outlines all anticipated expenses for the year, including maintenance, amenities, and reserve fund contributions. Homeowners may have the opportunity to review and comment on the budget before fees are finalized.

Why Do HOA Fees Vary in Long Beach?

In Long Beach, the variation in HOA fees can be attributed to:

• Location: Communities closer to the coast or with scenic or ocean views usually have higher fees due to premium real estate values.
• Community Size: Smaller, exclusive communities may have higher fees to cover fixed costs among fewer homeowners.
• Amenity Quality: Communities offering high-end amenities or newer facilities often have higher fees to maintain these features.

Pros and Cons of HOA Fees

Pros

• Well-Maintained Community: Regular maintenance and repairs keep the community attractive and functional.
• Access to Amenities: HOA fees provide access to various amenities without additional out-of-pocket costs.
• Property Value: Well-maintained communities often see higher property values.

Cons

• Cost: HOA fees are an additional expense on top of mortgage payments and property taxes.
• Restrictions: HOAs may impose rules and regulations that limit how you use or modify your property.
• Financial Management: Poor financial management by the HOA can lead to unexpected fee increases or special assessments. Recent insurance increases in the market also have an impact.
  

Tips for Managing HOA Fees

1. Budget Accordingly: Factor in HOA fees when calculating your overall housing budget.
2. Understand the Rules: Familiarize yourself with the HOA’s rules and regulations to avoid fines.
3. Attend Meetings: Participate in HOA meetings to stay informed about budget decisions and fee changes.
4. Review Financial Statements: Regularly review the HOA’s financial statements to ensure funds are managed properly.

Conclusion

Understanding HOA fees is essential for anyone considering moving to a gated community. These fees ensure that the community remains secure, well-maintained, and equipped with desirable amenities. By understanding what HOA fees cover, how they are determined, and how to manage them, you can make an informed decision and enjoy a hassle-free living experience in your new community. When in escrow, make sure that all documents submitted to you as the buyer are reviewed before you investigation period expires.

For more personalized advice or to explore gated communities in Long Beach, feel free to contact me. With my experience in HOAs, I can provide detailed insights and help you find the perfect home.

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Long Beach Housing Market Profile for November 2022

Amazingly, the median and average single family prices are up over the rolling calculation 12 month period by 7% and 11%, respectively. Comparing November to November, however, the median price is down almost 4%, but the average sales price is up over 3%!  Yes, the year has been somewhat fractured, what with interest rates down, then up, then softening again most recently.

Although it may vary in individual neighborhoods and price points, the original list to sale price on a rolling 12 month basis was over 100% -- still!  But then comparing November to November, that figure shows sales prices were down almost 4% for the City as a whole.  

November Housing Stats for Long Beach CA

The picture for condominiums is similar, the 12 month rolling calcuation is up over 9%, the November to November comparison is down for median prices, still up slightly for the average condo price.

Long Beach condo pricing - November

 

 

 

 

 

 

 

 

 

Best wishes for a beautiful end of 2022 holiday celebration!

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Long Beach Condominium Market--More Affordable for Many Buyers

 

Currently there are 62 active condo listings in across Long Beach, with the overall average price being $562,469 per MLS data.  This is a lower number than the 90 current house listings, however, SFR average price for the entire city of Long Beach is $1,226,196, significantly higher than the condo average.  While condo prices range from $1,500,000 down to $270,000, the median and average prices are well below $600,000.  

There are currently 131 condos in escrow with an average of 29 days on market, while there are 100 single family homes in escrow with similar days on market, and of course at a much higher average price than the condominiums.  

Condominiums are located throughout almost all areas of Long Beach and provide an avenue to homeownership in a neighborhood which may otherwise be totally unaffordable to the buyer. Older HOAs may not offer enough parking for all owners because the building requirements before the 1980s were different, but later developments were required to offer a parking space per the number of bedrooms in a unit.  And, older developments were most commonly built with community laundry rooms, while later ones offer inside laundries and central air and heat.  Many older buildings, however, feature more interior square footage and seem more spacious. Condominiums may have more rules to meet for lender approval on a buyer loan, because the lender looks not only at the unit, but also at the common area maintenance and condition, so buyers searching for a condo home should keep this in mind.  Rules and regulations of HOAs are part of the buyer's new homeownership--living in a condo is a certain way of living that is different than a single family home, but in today's market, especially, it offers ownership opportunity.

Long Beach also has some lower priced stock cooperatives and own-your-own properties which appear to be condos but are not, which are also affordable buyer opportunities, but do have some different mortgage requirements. If you find such a property on the market and want to find out more, please contact me.  To find condos on the market in Long Beach, go to my condo search .

If you're a seller thinking of making a change and you want to put your condo on the market, please contact me for important information about selling your condo. I have 25 plus years of experience and have sold numerous condominium units.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Long Beach Residential Update for July, 2021

 

Median listing prices for active properties in Long Beach range from $425,000 to $1.4 million in July, 2021.   The least number of properties on the market are in the lower price range of under $500,000, most inventory is listed well over $600,000.  

About this graphic:  This graphic combines single family homes and condos into one median price point for the "active" properties for the month.  The median price is where half sold for more and half sold for less; medians are more typical than average prices.  The estimated monthly mortgage payment assumes a 30-year fixed-rate mortgage at the current interest rate. Payment also includes an assumption of 1.38% for property taxes and insurance.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Long Beach Market Update for July, 2021

As of July 1st-30th, the number of single family homes sold in Long Beach totaled 192, price ranging from $375,000 to $6,600,000.  The MLS shows that 39 sold under list price, all others sold at or higher than original list price, some times significantly higher--in all price ranges.  

For instance, 420 Monrovia Ave., in Alamitos Heights area of Long Beach, was listed at $2,299,000, on 6/18, then increased in price to $2,499,000, then sold on 7/26/2021 at $2,400,000.  It went into escrow the same day it became active in the MLS.

3817 Albury was listed at $549,900, and closed at $605,000, after 2 days on the market. 

Similar stories of a  sold price of $50,000 increase over list price are not unusual. 

The median Long Beach sale price for July was $705,000, where median list price was $705,000 and the median sale price was $738, 750.  The Long Beach average list price was $696,293, average close price was $714,770 with an average of 13 days on the market.

Yes, there are some properties that have been on the market for quite a while, still waiting for a buyer.  The longest is 346 days for a multimillion asking price in the Naples area, but another one listed for $799,000 has been waiting for a buyer for 114 days as of July 30th.  Park Estate, Belmont Heights, Carson Park, all have a few listings that are waiting for a buyer, so not absolutely everything is selling in less than a week, although buyers should be prepared for moving quickly on most properties.

There were 113 condos that sold in the same time frame, with the majority selling over list price also. But the median price is $436,500, median sell price is $445,500, days on market 12.

If you are thinking of selling, or would like to evaluate your possible sell price at this time, please contact me via phone or email.  I look forward to hearing from you!

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

It Just Got Easier to Buy and Sell Condos with FHA

Downtown Long Beach condo view

As I've previously posted,  condos haven't gotten a break from HUD for a long time.  Many HOAs, if not most, in Long Beach lost their FHA certification and didn't renew it.  It was once a permanent approval, but due to the 2009 and later mortgage fallouts, HUD required HOAs to renew their FHA loan approvals every two years.  For most Boards, that's a nano-second.  Plus, HUD removed the ability to get a "spot" approval, meaning a single unit could be approved for an FHA purchase, even if the rest of the HOA was not approved.

Finally, HUD is giving back.  Effective October 15, 2019, the new rules (click on the title link) will:

Extend the approval period from two to three years;
Allow for "spot" approvals, those single unit mortgage approvals, up to 20% (currently, none are allowed);
Allow additional flexibility in the ratio of investors to owner-occupants in the association, between 25-75% (currently, 50% owner occupancy required).

To give an idea of how this will help FHA buyers, nationally there are more than 8.7 million condo units, but only 17,792 FHA condo loans were originated in the last year, according to the National Association of Realtors.

These loans changes may also come under specific lenders' requirements, so who you work with on youir FHA loan may have an impact on what HOA may or may not be eligible.  However, since lenders want to make loans, there should be a lot of incentive to help a qualified buyer complete a condo purchase.
These new changes are very beneficial to condo sellers, who should find a buyer faster when not owning in an HOA-approved building.

If you are interested in finding out about a condo purchase, Please contact me.  I've been helping buyers and sellers since 1994!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

More Realistic Lender Rules for HOAs would permit more Buyers to Buy Affordable Homes

According to the National Association of Realtors, there are between 145,000 and 155,000 condominium projects in the United States.  As background information, in order for FHA loans to be approved in a condo development, the entire association must be approved by HUD (per its guidelines) and this approval must be obtained every 2 years. That is a lot of paperwork for most HOAs to focus on, along with all their other usual work in maintaining their association, via their Boards of Directors.   "As of January 2019, FHA has approved only 9,427 of 52,410 condominium project applications." Hence, many association in the U.S.--certainly in Long Beach--have dropped their former approvals, and sellers must now depend on buyers who obtain conventional financing.  But they are losing prospective buyers, since many first-time buyers opt for FHA loans for a variety of reasons.

HUD has been asked to lengthen the recertification process time, as well as loosen up on other items such as owner-occupancy requirements.   Currently, 50% owner occupancy is required for FHA loans, but HUD is being asked to reduce that to 35%--because many HOAs do not have rules about how many rentals are allowed, and lower owner occupancy ratios are excluding buyers bringing FHA loans with them. Also, HUD restricts the number of FHA loans allowed in a project to a very low percentage, but eliminating that rule would allow more buyers to buy. In the past, "spot approvals" were allowed, meaning one unit could be approved for an FHA loan in a non-approved building, as long as that HOA met certain criteria.  Spot approvals are once again being requested, again, this would increase homeownership.  The two-year approval period is asked to be increased to five years, this would vastly help Boards of Directors and sellers alike.

Given the almost daily appearance of lack of affordability for buyers in the newsfeed, an opportunity to buy a condominium, which is a lower sales price market compared to houses in many areas, is an opportunity for homeownership for all.

If you are interested in a condominium purchase, or finding out about the features of condo owership, please contact me via phone or email. I am familiar with condos, and would be happy to share my information with you.


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Time to Update Your Home Appliances for Water Conservation

Jan. 1 2019 deadline

Do you live in a condo, or own a multi-family property built before 1994? Or are you improving or remodeling a property?  It's now time to make changes as of January 1, 2019.

Beginning in 2017, all single family homes were required in California to install water conserving plumbing fixtures, i.e., most commonly faucets, showerheads and toilets.

And what exactly are the requirements? SB407 puts it this way, so look for toilets (really, they've been on the market for a long time now) that are not more than 1.6 gpf, and so on:

“Noncompliant plumbing fixture” means any of the following:

(1) Any toilet manufactured to use more than 1.6 gallons of water per flush.

(2) Any urinal manufactured to use more than one gallon of water per flush.

(3) Any showerhead manufactured to have a flow capacity of more than 2.5 gallons of water per minute.

(4) Any interior faucet that emits more than 2.2 gallons of water per minute."

Here is the link to the law on plumbing fixtures replacement as passed in 2009 which set the deadlines and requirements for California properties:  SB 407

But what if you sell your condo or house and you haven't complied with the law yet? Just be aware that the seller must disclose to the best of his/her knowledge if such fixtures have or have not been installed.  The lack of such fixtures is not a condition of sale according to the law, but you will still be in violation of the law, and the buyer may really wish for the seller to take care of this before the close of escrow, it all  depends.

But considering years of water drought, and the necessity of cutting back on water usage throughout the state, it's really best to comply with the law--everyone has been given 10 years!!

Also, cities may have stricter standards than what the state requires, so check your local municipality, such as Los Angeles, San Francisco, and San Diego, which do have point of sale requirements.

At this point I'm not aware that Long Beach has more stringent requirements than the state.  The City is, however, offering a rebate if you give up your 1.6 gpf toilet and get a .8 gpf toilet http://www.lbwater.org/Rebates -- see a list to download on approved fixtures.  More information on the City's water program is currently on their website: http://www.lbwater.org/Residential%20Conservation

 See prior post:  2017 post on low-flow toilets

Lastly, for more complete information, I will be happy to share a complete up-to-date posting from California Association of Attorneys legal section about this law, to clarify any questions about how to negotiate with your buyer on this subject, and more.  Just call or email me with your specific question and contact information. If it turns out I think you're a non-California property owner in China, I'm probably not going to respond.☺

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

October/November Prices in Long Beach, Lakewood, Cerritos, Seal Beach

Happy December in Long Beach

In Los Angeles County, the median priced home in October, 2016 was $570,000 , up from $510,000 in October, 2015.

The current median single family home price is $513,520 for all of California, an increase of 7.3% statewide since the previous October. 

In the chart are median prices (the midpoint of all sales above and below that price) for Long Beach, Lakewood , Cerritos and Seal Beach single family homes from January 1, 2015 through December 13, 2016.  Seal Beach has decreased by 1.5% in that time; Cerritos has increased by 5%;  Lakewood has increased over 9% overall; Long Beach has increased 11%.


Current average price for a single family home - Long Beach $673,500; Cerritos - $706,453; Lakewood $5554,872; Seal Beach $951,544.
Average 2-bedroom condominium prices for all four cities range from $328,000 (Cerritos) to $391,000 (Long Beach). 

See the July post for prices

Affordability in the California Housing Market

With the improvement in the California housing market since the "bottom of the market" in 2009, affordability has changed.

California's housing affordability index is at 29 percent, meaning 29 percent of California's homebuyers can afford the median-priced home of $487,420, which is a statewide figure.  The required income is just over $98,000.  To compare, 38 percent of the California population makes an annual income of $78,000 or more.  While not all single buyers may fit this profile, couples able to use both incomes to qualify are more likely to suceed, especially in the lower-priced condo market in certain cities.

In spite of this affordability declining over time, it appears to have stabilized in the 30% range.  Has it affected sales volume? Apparently not, because sales volume has increased 5.7% since the same time last year.

Downtown Long Beach

Will gradually increasing interest rates affect California's housing market?  Hopefully not, if the economy and labor markets continue to stabilize or grow.

What is the Long Beach median single family home price doing?  Here are the latest citywide figures:




 Long Beach condo price for the citywide median price of under $350,000
is posted below:

Points to Ponder When Considering A California Condo or Homeowner Association

Versailles HOA Condominiums

Single Family in Bixby Village HOA

Condominiums and other types of units in common interest developments (CID) are very appealing because they may offer homeownership in an area where houses cost much more, security, amenities, neighbor accountability, and less personal responsibility for certain maintenance issues that might otherwise be required in a non-CID single family home.

The most common form of ownership in Southern California is ownership in a condominium project where the owner has title to an individual unit and an undivided interest in the common area. Other forms are stock co-op, own-your-owns, and planned unit developments (PUDs).

The common areas are the areas outside the unit such as walkways and lobbies.  They also include, if present, exclusive use areas such as parking spaces, balconies, and private patios, which many people think they bought when they bought their condo, but in almost all circumstances what they acquired was the right to exclusively use them.

A standard part of the purchase contract includes the receipt and review of association documents which the seller is required to provide.  So often, though, these documents, which include the CCRs, the Rules and Regulations, and By-Laws, are not so thoroughly looked at during the buyer's contingency period, because there seems to be so much else to do, like go to your job everyday.  So the more you know beforehand, the better off you'll be.  Some of the more common concerns that pop up are pets, parking, smoking, and the hours on the association swimming pool or tennis court.  HOAs may regulate the number and type of pets within the guidelines of the pet law; smoking is becoming more of an issue even within private units because smoke drifts out windows; and be prepared to carefully check out the assigned parking area because you'll be signing a disclosure form from the seller so that your oversize truck does not become an issue when you move in.  Why is it so important to know your documents? Because they are voted in by the association members, and they form a contract between the owners and the Board of Directors whose duty it is to enforce them.

If you are buying into a small association, you want to verify that they have an active association as required by law--nothing could be worse than paying dues and not knowing where the money is going.  How old are their CCRs?  Yes, it's still not unusual to find 30-unit associations operating on original documents from the 1970s.  Just be aware that many California laws have changed since then and that older documents will not reflect those laws.  Associations are required to make a growing number of annual disclosures to their members, i.e., starting 1/1/2016, they must disclose in their annual budget if the project is FHA/VA qualified (FYI:  a growing number of formerly FHA-approved associations are not meeting current FHA requirements).

An important law effective January 1, 2015 requires the seller to pay upfront for all HOA documents (per Civil Code Sec. 4525) provided to the buyer.  This can amount to several hundred dollars depending on property management companies who typically manage the transmission for the seller; so the seller may instead forward complete copies directly with written verification (form provided by your Realtor) if he/she already possesses them.  You the seller will have to order what you do not have, but your costs should be greatly reduced.  The contract specifically details these and other HOA documents, and what the buyer or seller will pay for, because non-required documents may be paid for by the buyer.  A new owner could expect to find topics addressing solar panels, satellite dishes, roofing materials, sign and/or flag displays, right of board entry (or not), tenant use of common area, storage, parking, noise, use of swimming pools, architectural control, smoking, and much more including the owner's duty to pay dues and other assessments, what the board may impose a lien on and how, and how the board is elected.

 If you would like a more detailed written discussion about the rights and responsibility of homeownership in various types of common interest developments, please contact me with your information and I will forward you the information.

Just Listed! Alamitos Beach Condo

 One-bedroom, one-bath unit in Alamitos Beach area of Long Beach.  Very nice upper unit at a great price for a cash buyer looking for a getaway place, or a first time buyer just starting out (conventional loans only, please) in this 12-unit building.

Nice interior with soft colors and double-paned windows.  Bathroom is close to original 1950s style with newer vanity, and plenty of closet space for the bedroom.  A big plus is the garage parking for this condo, and the view down on a very nice courtyard area. Great area for walking and close to the beach.

It's a great price at $210,000, with HOA monthly dues of $183.00.
Please call for more information for 1030 E 2nd St., #8, Long Beach 90802.
(Information current as of 3/10/2015)

Julia Huntsman, Broker
Lic 01188996
562-8962609
MLS:  PW15049517
http://mrmlsmatrix.com/Matrix/Listings/ZHUNTJUL246/MyResiListings.mls

Landlords and Property Owners, Don't Risk Your Property With Illegal Activity

In spite of the laws being passed in many states allowing legal consumption of marijuana, federal law says it's illegal. So in spite of the growing public "approval" towards this drug, if you are a landlord with tenants, you may be at risk if you are allowing tenants to smoke marijuana on your property.

A landlord may be at risk, according to National Association of Realtors Senior Policy Representative Megan Booth, of having his/her property taken because the federal government, which takes precedence over state laws, may seize finances and property connected to illegal activity.  So while public opinion shifts more towards acceptance and pro-legalization, the federal government is also being pressured to act in accordance with the current federal laws. “The U.S. has signed on to global treaties classifying marijuana as one of the heaviest controlled substances,” Booth said. “So there’s some outrage that the U.S. isn’t prosecuting marijuana users here as fiercely.”

At the very least, new disclosures may be required (as if there aren't enough already) in leases and real estate sales transactions, covering marijuana policies on rented premises, and selling houses and condos where nearby marijuana use is allowed.   All is not rosy in this new "industry": there has been an increase in reports of explosions on properties where tenants have been growing pot using special equipment, mold could  be an issue because the plants require high humidity, to say nothing of smoke and odors from nearby users. Such issues could exponentially deadly if this involves apartments or attached multi-unit condominium buildings where an explosion could immediately cause damage across several units, or moisture and water leakage issues spread to a lower unit causing expensive mold removal and interior replacements, and subsequent legal issues for the owners, possibly the Board of Directors, and substantial insurance and replacement costs.  (Such a story was once told to me about non-English speaking tenants who rented a unit advertised as "garden apartment" in Orange County.  Being new to the U.S., and possessing very little English, this was interpreted to mean that a tenant could start their own garden inside the unit.  So a crop of marijuana plants was ultimately found growing over the carpeting and causing extensive water damage to the unit below.)

Just Listed in The Lafayette

Lovely 10th floor studio unit in The Lafayette in downtown Long Beach. Faces south for panoramic city, neighborhood,

and ocean views. Lots of light in this spacious unit. Kitchen upgraded in 1995 with cabinetry, counters and ceramic tile flooring in kitchen/dining areas. The bathroom tile reflects the Art Deco historic style. Unit is close to the elevator. Visit the solarium on the 11th floor for more views, and the patio on the 7th floor. Extra storage units (see HOA for fee) are on availability basis. A former ballroom has become the association gym. Tax records show as one-bedroom, however, this is a studio unit with a Murphy bed in a double-door enclosed area in the living room area. Dining area offers direct views to the south. The historic Lafayette has a beautiful lobby reflecting its Art Deco past, and is located in prime urban downtown with shops, restaurants.

List price $193,000.  Lic 01188996

 

Note: Sold 4/28/2014 for $203,500. If you want a free market analysis for your property, please contact me!

 

What Does Homeowner Insurance Cover, or Not Cover?

What does your homeowners insurance cover? 

The short answer is: A basic homeowners insurance policy (called HO-1 in insurance lingo) covers your home and possessions if they’re damaged or destroyed by these things:

Fire
Lightning
Windstorm (unless you live in a hurricane zone)
Hail (not available everywhere)
Explosion
Riots
Civil commotion
Aircraft (and things falling from aircraft)
Vehicles (and things thrown from vehicles)
Smoke
Vandalism (although some policies exclude this)
Malicious mischief
Theft
Volcanic eruption.

But many states don’t allow this basic policy to be sold. Instead, you have to buy an upgraded policy that covers more perils.

Upgraded Homeowners Insurance

That upgraded policy (called HO-2) adds protection to your home and possessions from even more perils. You get protection from everything on the HO-1 list (above) plus:

New Listing: Downtown Long Beach Condo in The Sovereign.

 Here is a vintage one-bedroom/one-bath corner unit in downtown Long Beach, in the vintage 1920's building, The Sovereign.

This is a fifth floor corner unit, not on the market for several years. This is a lovely and interesting building from an earlier era in Long Beach--it has a beautiful lobby and a top floor atrium with ocean views.

Priced under $130,000, with HOA dues of about $301/month.  Occupant must find their own parking, but their are nearby reasonably priced options.  This is ideal for an investor buyer, please call for more information.


For more information, see this link:

http://mrmlsmatrix.com/Matrix/Listings/ZHUNTJUL246/MyResiListings.mls

Julia Huntsman
REALTOR/Broker
#01188996
562-896-2609

NOTE:  Property is sold.

What Are Some of the California Tenant/Landlord Rules About Pets In HOAs?

If you live in a homeowner association in particular, questions may have come up about the presence (or not) of pets when leasing property:

California passed new pet laws effective in 2000 for homeowner association owners, allowing a minimum of one dog, cat, fish, or bird (simply speaking) per owner.  The homeowner association is allowed to set further rules concerning size, number of pets above one, and other rules including the presence of animals in the common area, or animal behaviors, as long as they don't conflict with state law.

So what does this mean for tenants who are renting in a homeowner association, because the pet laws for owners do not necessarily apply towards tenants, the exception to many of the following rules being if the tenant is disabled and requires a certain service animal under "reasonable accommodation" rules.

• A landlord may ban pets in a lease; the law allowing pets in an HOA concerns owners, not their tenants.
• A landlord can restrict breeds or types of pets.
• A larger deposit may be charged if a pet is allowed, but the total deposit must comply with California's rules about maximum security deposits.
• If allowed in a homeowner association, the pet provisions will apply concerning any rules such as cleaning up pet waste in the common area, being leashed in the common area, or areas where pets may be allowed or prohibited such as pools or other recreation areas.
• If, for example, a dog bites or harms the postal worker who is on the property delivering mail, the dog's owner will be responsible for his/her pet, and the property owner could also have some responsibility depending on the circumstances involved.
• A landlord/tenant lease can require the tenant to obtain renter's insurance to cover pets on the premises.

For more detailed information, please contact me via phone or e-mail to be sent a more detailed summary prepared through California Association of Realtors about landlord/tenant pet laws and how they might affect you, whether you are or will be a landlord, tenant, or someone who may want to know more about service animals in this situation.

New and Easier Guidelines for FHA Approval of Homeowner Associations

The fallout rate for FHA approved homeowner associations has been huge over the last 2 years. FHA-approved condominiums are often one of the best entry level paths for first time buyers into homeownership.  But the Federal Housing Administration (FHA) just eased some of its restrictive guidelines, bringing their rules into the sphere of the current economic market, and bringing more opportunity to sellers and buyers.

One example of change is the acceptance of FHA loans in complexes which included commercial units--often located on the first floor, such as the Lafayette in downtown Long Beach or one of the newer loft projects in San Pedro.  The revised rules changed from allowing 25% to now allowing 35% of the project to be retail or commercial, and possibly more.

Another difficult requirement concerning the personal legal liability for condo board officers for being responsible for certain knowledge that could be well beyond their actual ability to know, with a penalty up to 30 years in prison, has now been changed to "less scary language."

And, significant in these economic times, the requirements concerning delinquent dues and length of time delinquent has been expanded to 15% of owners may be up to 60 days late (not the previous 30 days) to meet FHA approval for the project. 

While these may not seem like significant changes to some, by checking the list of FHA approved projects in Long Beach, compared to the far greater number that were FHA approved for many years, it's not difficult to see the impact on buyers, sellers, and the lending market.  See the complete article by Kenneth Harney.

Number of FHA Qualified HOAs Falling Drastically

This afternoon I was sent a list of FHA-approved condominium complexes for Long Beach.  They now currently number 34, with two approvals expiring in April, leaving 32 for all of Long Beach.  This is a huge reduction in number compared to a few years ago--these approvals are dropping off for two reasons: HOAs don't realize the requirements have changed or that their approval has expired and that they must renew again, or the HOA complex's financial circumstances don't currently meet FHA guidelines.  But I believe many complexes fall into the first category.

If you are an HOA member, or know someone who is, think about this: If your complex is not approved for FHA-HUD loans, you greatly reduce the number of approved buyers who can bring an offer, thus probably delaying the selling date of your property.

If you are a buyer with an FHA approved loan (especially one being used with certain buyer assistance programs), your selection is now greatly reduced because you simply will not be able to buy in a non-FHA approved condominium complex.

Property owners, you should take active steps to look into this issue.  With today's loan qualifying requirements, FHA loans are accessible for many 1st time and repeat buyers, and in the future they will become even more critical as former owners of distressed properties re-enter the market.

So you think you're going to keep living there, and it doesn't matter?  What if you would like to get a reverse mortgage?  They require your complex to be FHA approved.

Yes, there are lenders willing to qualify your association during escrow, but don't wait until then--it's a much longer process, and the buyer could decide to find another property.

Or the alternative is, if you're a buyer, be prepared to use a lender not of your choice, but one of the few who can give you a similar loan without needing to go FHA. In that case, call me, and I can send you to the right place.

But owners, remember, there are still FHA approvals required for reverse mortgages, therefore contacting your Board of Directors should be at the top of your agenda.