Shady Hollow Update

Many of the readers that saw this post have wondered what the outcome of this issue was. Sadly, this situation could not have gone more horribly.

The homeowners won the lawsuit and were sent to arbitration. Any reasonable person would think that surely the arbitratration would go well..  right? WRONG

However, the legal firm representing the homeowners hired an appraiser to do the valuation and then did not stay on top of him. In fact, the appraiser missed all of his deadlines, turned his report in a day or two before the court date (way too late to fix anything) and then brought in ridiculous comps. It was humiliating to watch the other side chew him up and spit him out.

So as a result, the decision came back for an average increase from $44 a month to about $1,000 a month retroactive to the beginning of the lawsuit in 2005. Most homeowners just walked away after getting that news.

The remaining homeowners were given an opportunity to pay a discounted retroactive fee (still high when you consider that no one expected anything close to that number) or you had the option of giving the property to the land owners, debt forgiven. Choice #3 was foreclosure, a bunch of people did that too.

The saddest part of this story has to do with the many displaced elderly people a few of whom died during the process and others who have had to go live with family members.

The moral of the story might be: don’t touch anything on a land lease because when the lease ends the owner can substantially increase the fees, change the terms or take the improvements back. In this case it was a poorly written lease but there were even a few attorneys who owned in there and didn’t see this coming.

Oh well, life is too short to dwell on disapointment.

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Is it possible to own your home free and clear and still face evicition?

While it sounds preposterous, residents in the Shady Hollow community are facing such a dilemma.

Built on leased land almost 40 years ago, a lease clause was included in their purchase agreement providing for a monthly fee of either $42 or $44 depending on whether they bought in phase one or phase two. The contract indicated that there would be an increase after 30 years based on the values in the year the current rate expired. It sounded reasonable at the time and no one could have foreseen the real estate boom that would take place in the mid 2000’s.

Fast forward to 2005, when the leases expired the homeowners braced themselves for an increase, would it double? Triple? More? But in their wildest dreams no one living there could have anticipated an increase to $2,000 a month! Surely it was a typographical error, maybe they meant $200 a month an amount still difficult for those on a fixed income. But no, they were serious. They wanted $2,000 a month effective immediately!

In fact, the residents were told, that they had taken advantage of low fees for too long only paying a meager $42 or $44 a month. Well, whose fault was that? Are they being accused of shirking their responsibilities? They didn’t write the lease, they simply complied month after month and year after year. Now they were being treated like scoundrels who didn’t deserve to live there.

When the residents complained about the new extremely high fees the owners generously offered to lower the amount to $1,800. (really???)

With no other recourse in sight the residents banded together with all but 4 of them contributing $100 to file a lawsuit. Surely this is illegal they thought, the courts won’t stand for this they were certain.

Now a look to the present day in December 2011: After numerous filings, many older residents having passed away or in tremendously ill health, lots of foreclosures, and almost no value left on their investments the news is still not good.

An arbitration committee using appraisal methods that the resident’s attorney did not believe followed the appellate courts order, came up with increases ranging from $965 to $1,294 a month retroactive to the beginning of the lawsuit. This means that some residents will be expected to come up with nearly $100,000 within 30 days of the courts confirmation should the decision stand. There is a chance that the court will lower or abandon the arbitration committees findings and the residents are hoping that the court will find the fees to be “unconscionable.” That is to say, so high as to be outside the realm of reasonableness.

But if the court does confirm the new fees most of the residents, especially the elderly will be doomed. After doing the right thing, paying the fees regularly and thinking that they had planned wisely for retirement they may join the ranks of the homeless. The court date is scheduled for Jan 17th inSanta Ana,California.

If you agree that this is unjust, please distribute this message and also write your local political leaders today, there is no time to lose.

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Is it possible to own your home free and clear and still face evicition?

While it sounds preposterous, residents in the Shady Hollow community are facing such a dilemma.

Built on leased land almost 40 years ago, a lease clause was included in their purchase agreement providing for a monthly fee of either $42 or $44 depending on whether they bought in phase one or phase two. The contract indicated that there would be an increase after 30 years based on the values in the year the current rate expired. It sounded reasonable at the time and no one could have foreseen the real estate boom that would take place in the mid 2000’s.

Fast forward to 2005, when the leases expired the homeowners braced themselves for an increase, would it double? Triple? More? But in their wildest dreams no one living there could have anticipated an increase to $2,000 a month! Surely it was a typographical error, maybe they meant $200 a month an amount still difficult for those on a fixed income. But no, they were serious. They wanted $2,000 a month effective immediately!

In fact, the residents were told, that they had taken advantage of low fees for too long only paying a meager $42 or $44 a month. Well, whose fault was that? Are they being accused of shirking their responsibilities? They didn’t write the lease, they simply complied month after month and year after year. Now they were being treated like scoundrels who didn’t deserve to live there.

When the residents complained about the new extremely high fees the owners generously offered to lower the amount to $1,800. (really???)

With no other recourse in sight the residents banded together with all but 4 of them contributing $1,000 to file a lawsuit. Surely this is illegal they thought, the courts won’t stand for this they were certain.

Now a look to the present day in December 2011: After numerous filings, many older residents having passed away or in tremendously ill health, lots of foreclosures, and almost no value left on their investments the news is still not good.

An arbitration committee using appraisal methods that the resident’s attorney did not believe followed the appellate courts order, came up with increases ranging from $965 to $1,294 a month retroactive to the beginning of the lawsuit. This means that some residents will be expected to come up with nearly $100,000 within 30 days of the courts confirmation should the decision stand. There is a chance that the court will lower or abandon the arbitration committees findings and the residents are hoping that the court will find the fees to be “unconscionable.” That is to say, so high as to be outside the realm of reasonableness.

But if the court does confirm the new fees most of the residents, especially the elderly will be doomed. After doing the right thing, paying the fees regularly and thinking that they had planned wisely for retirement they may join the ranks of the homeless. The court date is scheduled for Jan 17th inSanta Ana,California.

If you agree that this is unjust, please distribute this message and also write your local political leaders today, there is no time to lose.

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Santa Ana Condo owners face huge fee increases!

On Dec 14th, the homeowners of Shady Hollow Condo Located in the 2500-2600 block of Tustin Ave in Santa Ana may be given an increase of about 2,700% on their land lease fees retroactive to 2005 when their lawsuit was filed. The matter has been in the courts several times and recently went to arbitration.

If the arbitration decision stands these homeowners will each be required to come up with over $90,000 per unit or risk losing their homes many of which still have mortgages in addition to home owner association dues.

Some of the home owners are retired and on fixed incomes. This modest community is comprised of a diverse group ranging from renters to long time home owners. No one believed that they might be facing such a horrible potential outcome. After all when the lease ends in total the improvements (including all of the condo’s) will become the property of the folks that own the land.

The arbitration committee has issued their decision raising the fees from $42 & $44 a month to amounts ranging from over $1,100 to more than $1,200 per unit using a formula that the homeowners believe was different that what the court ordered.

Please share this story and help avert this disaster. For more information you can contact me at darlene531@gmail.com

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