Fairfield Harbour Property Owners Reform Team

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Guess the Harbour Pointe Golf Course must be very confident in their revenues, as we saw the delivery of about 30 fancy new Club Cars to their clubhouse today.  Would be so interesting to see the actual financials of this operation . . . are operating expenses and the appropriate portion of $90,000 quarterly loan obligations covered by revenues from green fees?  Hmmm . . . seems impossible to me.

So, what about the 385Loan?  How long will homeowners endure escalating POA dues to keep this community solvent?  Already, we've seen an increase in properties for sale.  There's been the dump/sale of 100 properties from the POABOD (us!) for $2k each, much less than our cost through foreclosure or other transfer.  Would not be surprised to see a loan default, and the exclusive loan investors taking possession of the 385.

Feels like we're past the iceberg impact on the Titanic and s-i-n-k-i-n-g!






Feb 14 7:31 PM
I don't do the FHPORT UPDATES anymore but this one I think needs to be sent out to all of you property owners. Last night on Channel 9 news at 11pm was a story about all the calls the Craven County Sheriff's office has been getting going on in Fairfirld Harbour. It seems there has been a number of calls Since mid January. The story was picked up by Channel 9 news and they sent a reporter and news truck out to ask questions.

The reporter stated they were NOT ALLOWED INSIDE the gate. He also reported that he repeatedly called HOA President Ann Simpson for comment. There was NO response to the reported from the POA.

So I guess the reporter did get a hold of at least 2 people to ask them for a comment to the crime in FFH. One said It looks like the POA is trying to sweep it under the rug.

If the POA is unwilling to talk to the reporter from channel 9 news it seems they are also unwilling to notify the community on what has been going on. This goes to the question why are we paying OUTSIDE CONTRACTOR security. These people may have good intensions working in FFH but lack the knowledge of the community hurts. This bring me to the point was it better with our own people from FFH doing security?

We pay for management that keeps screwing us over. We pay for security that  cannot seem to find the problems going on right under their nose.

I just wish someone would have invited the Channel 9 team into FFH. The guards cannot stop them at that point.
Rich Edwards


As I was leaving from the harbor about 3 this afternoon, I and a few other cars did a double take on seeing a big boxy white truck coming in the gate. It had "Bomb Squad" over the windshield, 2 men sitting up front. The side of it said," North Carolina bureau of investigation, bomb squad".  The guards let them through. Wonder what that was all about.
J Leslie.




'Churn and burn' schemes can defraud HOAs when boards don't pay attention

Question:  I was finally able to do a walk-through with our association’s gardener after our property manager was let go. I was shocked to learn that several beautiful mature trees were removed from our common areas without approval from the board. He was also systematically replacing flowers and other vegetation, with the turnover of plants throughout the complex reaching a fever pitch that cost us tens of thousands of dollars..

When the gardener was pressed for answers, he said he was directed to do so by the former manager and even threatened to leave if we prevented him from ripping out plants and putting in new ones. Another board director later told me she found out that an individual board member was working with the manager to have the gardener perform the work and was getting a $500 kickback for each tree that was felled. It’s outrageous. Can we be compensated for our trees? Have you ever heard of such graft?

Answer:  This may be hard to believe, but this type of graft is so common that it has a name: “churn and burn.” And whether it is conducted by an individual board member, a manager or both plotting together, it typically occurs when the board is not paying attention, allowing theft to occur right under its nose.

The quickest way to stop these needless expenses is for your board directors to do what they were elected to do as fiduciaries — that is, act in good faith and oversee association operations. Practically speaking, the board should have current schedules showing the dates and times for upcoming vendor activities. For the purpose of oversight, at least one director should be present at those scheduled events.

Even though the association has a manager, the board is obligated to provide all its vendors with clear and concise job instructions. Part of those instructions should include the association’s hierarchy of supervision for all employees and vendors. Just like the gardener, the manager should not have taken direction from one board director alone — especially when such instruction may compromise the association’s best interests in keeping irreplaceable mature trees. Vendor work must be approved by the entire board.

If the former manager and board director instructed the gardener to perform the unnecessary work, the gardener may not be personally responsible for the wasted money spent on replanting vegetation and for the felling of trees. Without express procedures providing vendors with detailed job descriptions, the gardener could reasonably rely on any board member’s directions. Of course, this does not exempt the manager and board director from reimbursing the association for the cost of performing unnecessary planting and replanting.

The board needs to question the gardener, former manager and the complicit board director to determine the exact source of this landscaping scheme. Next, the board should make a demand for all of the money wasted on these projects. Once that issue is resolved, discuss the alleged $500 per tree kickback your board director received. If it is true, he must disgorge his ill-gotten gains.

Boards of directors that experience problems as you describe are vulnerable because they are sloppy. And they are wasting the scarce resources of the association, funded by the homeowners. There is no substitute for using common sense and good judgment. The graft stops when the current board admits its mistake, stops the blame game and resolves the problem so it does not happen again.

Zachary Levine, a partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian, JD, P.O. Box 10490, Marina del Rey, CA 90295.

Federal Court Rules HOAs Cannot Use ‘Super-Priority Lien’ to Foreclose on GSE-Backed Loans.


"The U.S. District Court for the District of Nevada ruled this week that homeowners' associations (HOAs) that attach super-priority lien status to mortgage loans cannot foreclose non-judicially on mortgages backed by Fannie Mae and Freddie Mac. Judge Gloria Navarro ruled in the case of Skylights LLC v. Byron that federal law prohibits a state-law HOA foreclosure from extinguishing a first deed of trust that is guaranteed by one of the government-sponsored enterprises."


"On September 18, 2014, the Supreme Court of Nevada ruled in a similar case that a HOA foreclosure extinguishes a mortgage lien such as that held by the Bank. Local readers may be interested that on August 28, 2014, the D.C. Court of Appeals reached a similar decision. In Nevada, Judge Navarro discussed how it is illogical for the HOA to simultaneously claim to be the rightful owner of a property and also assert an assessment claim against another party as owner.  She found that under Nevada law, the Association was not permitted to waive its right to extinguish the Bank’s prior lien through foreclosure. The Court decided that the HOA’s subsequent release of the lien against the Renterias and new liens against the Bank and HUD were not valid because it had no right to change course. Had an individual investor purchased the property from the Bank’s foreclosure following the HOA’s release, he would have found himself caught up in this mess. The Court did not discuss whether these latter actions also created unwaivable rights. Judge Navarro ultimately decided that the HOA claim of title violated the U.S. Constitution. She dismissed of the Association’s lawsuit on the grounds that the HUD enjoyed an interest in the property under the Single Family Mortgage Insurance Program that could only be released under federal law. The Property Clause of the Constitution states that, only “Congress has the Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.” Since the Bank’s mortgage was HUD-insured, a HOA cannot violate the government’s rights as insurer. This case is currently on appeal."

Now, Nevada Supreme Court:

01.26.17 - Nevada Supreme Court ruling upholds nonjudicial foreclosure process

Excerpt: "The dispute over the foreclosure sales dates to the foreclosure crisis that began in 2008. The law was changed by the Nevada Legislature in 2015 going forward to resolve the notice issue and other concerns.

The stakes are huge for those who acquired an estimated 2,000 to 3,000 properties by paying off HOA super-priority liens. A number of real estate investors adopted a strategy of paying off the super priority lien with the expectation that the first mortgage then would be extinguished, creating a financial windfall for many of the speculators.

Because of the legal disputes and questions over ownership, none of the properties can be sold because they have clouded titles."

Nevada Supreme Court ruling upholds nonjudicial foreclosure process

The Nevada Supreme Court ruled Thursday that a nonjudicial foreclosure process used by investors

and speculators to acquire HOA properties at bargain basement…