VOL. 36 | NO. 34 | Friday, August 24, 2012
Guilt by association: Better know the rules
Homeowners associations were created to serve the interests of the property owners in various developments, be they planned unit developments (PUDs), condos or subdivisions. In all cases, their actions are meant for the betterment of their members.
That said, it is remarkable how often these groups take actions that harm individuals and neighborhoods. One example: A home that closed last month cost a homeowner more than $11,000 in association penalties.
In this particular subdivision, there is a regulation against renting homes that carried a $50 monthly fine, which was more annoying than onerous. The owner in this case had a monthly mortgage payment of more than $5,000 and could rent the house for most of that. Additionally, the renter maintained the grounds well and was neither a nuisance nor a threat. He had a house in another area that had not sold.
The $50 fee escalated to $175 per month after three months, and the owner still felt that was palatable and maintained his renter. The head of the association felt that simply paying the fee was a slap in the face and raised the price to $500 per month in the bylaws.
Molly Smoot Blair
Since the renter stayed in place even at $500, the association quickly raised the penalty to $2,000 per month. The owner and his attorneys felt that fee was unreasonable, especially since it was put in place after the lease had been signed.
The house sold and the association placed an $11,000 lien on the property that had to be paid at closing.
This is not an isolated occurrence. A large number of associations across the area have renting prohibitions that are similar if not more rigid. Some will simply not allow rentals. Lately, that has resulted in foreclosures since owners could no longer cover the mortgage payment and had no benefit of rental income to offset the loss.
When foreclosures begin to litter a development, prices fall and maintenance can become problematic. Renters are often more meticulous than Uncle Sam when it comes to lawn care. Let the buyers beware. Associations are the friend of the homeowner when the homeowner sides with the majority.
Mournful Week in Real Estate
The Nashville real estate community lost two of its heroes last week with the deaths of Molly Smoot Blair and Amy Adams Gowan, both of whom succumbed to lengthy illnesses after courageous battles.
Amy Adams Gowen
Molly was a Realtor with Keller Williams. For years, Molly graced the Greater Nashville Association (GNAR) and the Williamson County Association of Realtors (WCAR) with her presence, where she was quite involved with legislative issues facing Realtors.
At GNAR, she was inspirational to the entire organization as a beacon at fundraising activities and membership functions. Her smile and its accompanying enthusiasm were infectious. She fell victim to cancer on Aug. 14.
Amy Adams Gowan died the next day following a three-year battle with ALS, or Lou Gehrig’s disease. Amy was an attorney who worked mainly in real estate.
As residential real estate contracts and those who write them are the bane of practicing attorneys, Amy served as attorney, confidant, adviser and the glue that held many of these transactions together.
After her diagnosis, Amy formed “Amy’s Army” with her husband Robert and led a herculean effort that raised more than $100,000 for research and assistance to victims of ALS. For this they were named the ALS Family of the Year.
She leaves behind two young children, Will and Catherine, as well as hundreds of Realtor clients and friends and thousands of people whose lives she touched.
Sales of the Week
“It was the best of times, it was the worst of times ...” Charles Dickens’s opening sentence of A Tale of Two Cities is one of the most brilliant, oft-quoted lines in all of literature. Today, it will be used to compare the 12South area of Nashville to the flood-ravaged Harpeth Woods neighborhood in Bellevue.
As has been noted, the 12South corridor has blossomed into one of the most bourgeoning, appreciating and attractive real estate locations in modern times. Homes sell within hours of being placed on the market for prices that other areas dare not imagine.
The home located at 907 Gilmore was listed by Maria Holland of RE/MAX Elite and sold for $365,000, $15,100 more than the list price of $349,900. The Realtor remarks in a host of listings are generally over the top, and Ms. Holland’s are reasonably complimentary with “well-maintained” and “new arch, roof, new gutters, and new tile.”
But they are reserved, and that is appreciated, consequently she sold the property for $189 per square foot and in a short period of time with Nancy Tice of Fridrich and Clark realty representing the buyer.
The home has three bedrooms and two baths, all on the main level. The house has 1,928 square feet, and the owner had purchased the property in 2005 for $274,000. A price jump from $274,000 to $365,000 over the course of a recession is the envy of almost every market in the country.
The second sale is 960 Beech Bend Drive in Harpeth Woods. As long as we are dealing with great English writers, a couple of quotations from one Richard Starkey aka Ringo Starr and his pals John and Paul, may be apropos. There was a time in May 2010, when this house could have been best viewed from a yellow submarine and could have offered an octopus’s garden as a sales incentive.
Yet today, completely restored, the house sold for $155,000 after Margaret Ann Hubbuch of RE/MAX Elite listed the house for $164,000. Price Lechleiter of Fridrich and Clark’s Brentwood office delivered the buyer, who benefitted from the renovation following the flood.
Natural catastrophes always raise questions as to home values. In the Nashville market, following the tornado, buyers were quick to buy homes in the affected areas such as Sylvan Park and East Nashville as they were virtually guaranteed of having new roofs.
In Bellevue, the areas that felt the brunt of the flood are back to pre-recession prices as the homes are, as Margaret Ann Hubbuch stated in her remarks, “Completely redone to the studs, Kitchenaid cabinets, granite counters, stainless steel appliances, hardwood floors! Beautiful tile baths.”
This would be consistent in describing most of the houses in the neighborhood prior to the flood.
Richard Courtney is a real estate broker with French, Christianson, Patterson, and Associates and the co-author of Come Together: the Business of the Beatles. He can be reached at Richard@richardcourtney.com