57 million Americans live in “Common Interest Developments” governed by Homeowners’ Associations. HOAs enjoy all the powers and prerogatives of local governments, but they operate with absolutely no checks and balances. Federal, state, and local governments have no authority over HOAs except when they violate federal fair housing laws. In the last two years, approximately 20 percent of the nation’s HOAs have committed such flagrant abuses of their power that they have spawned a nationwide movement to constrain their powers.
Keepers of the community’s best interests?
HOAs ostensibly serve their communities’ best interests. HOAs protect property values, promote pride of ownership, and provide recreational facilities and neighborhood services. Common sense suggests a micro-government devoted entirely to a development’s needs is more responsive to citizens’ concerns than a traditional city government would be. Real life experience shows, though, that HOAs often become responsive to community concerns at the expense of citizens’ rights and privacy.
A lot of power. No restraint or regulation.
HOA charters establish developments’ independence from municipal governments, which guarantee only police and fire protection. Residents pay local property taxes to support the full range of public services in the larger cities that surround their developments. Homeowners’ Associations have authority to regulate neighborhood aesthetics and provide for the welfare of all community residents.
HOAs have authority to raise membership fees, assess fines for myriad transgressions against “the community’s standards,” and even to foreclose on delinquent properties. In these Common Interest Developments, buyers cannot purchase homes unless they consent to the Homeowners’ Association’s Covenants, Conditions and Restrictions (CC&Rs). Official CC&R documents often run to more than 100 pages of dense legalese, and many first-time home-buyers fail to realize how many rights and privileges they sign away. Because the majority of homeowners do not read HOA newsletters, and they neglect “official” meeting notices and minutes, HOAs frequently operate according to board members’ caprices. No government branch, agency, or authority can undo an HOA’s decisions.
Homeowners share five urgent concerns
Reliable polls suggest homeowners split about 50/50 on whether or not HOAs ought to be subject to government regulation; homeowners frequently disagree quite strongly as to which level of government ought to regulate HOAs. Those same polls suggest, however, nearly all homeowners worry about…
- Problems with full disclosure.
Most homeowners agree real estate agents failed to adequately disclose or explain the CC&Rs as they were completing their loan documents. Although they concede that they were given copies of the CC&Rs, and loan officers asked if they understood the regulations, most insist a plain- English summary of the rules could have changed their decisions. - HOA’s selective, discriminatory and preferential practices.
Most homeowners can tell at least one horror story about mistreatment of neighbors who failed to maintain their homes and yards strictly according to the CC&Rs. The vast majority of these stories represent the elderly, people of color, or families in distress as HOAs’ victims. Many tell about late fees totaling some exponent of what the homeowners actually owed, and many more tell about flagrantly inhumane treatment of older women. - Due process issues.
Homeowners complain they have no idea how they would appeal their HOA’s decisions about property and conduct violations. They would like to see mandatory mediation or arbitration built into their CC&Rs, but most HOA charters stipulate changes to the CC&Rs must win consent from two-thirds of neighborhood property owners–a high hurdle for change initiatives to clear. - Unrealistic CC&Rs and extortionate penalties for violations.
“The CC&Rs transcend both sublime and ridiculous,” says Traci Schmidt, a Rancho San Diego, California homeowner. “If an HOA board member can see shampoo bottles on the window ledge in my shower, he can assess a $150 fine. Do my Herbal Essences have that much impact on his property value or pose that much threat to public wellbeing?” Schmidt notes the HOA immediately imposes fines and eviction warnings, offering no notice of the need for improvement and no options for appeal. - HOAs’ power to foreclose.
Schmidt also notes that her HOA may foreclose on her property if any “debt, fee, penalty, assessment, or financial obligation” to her HOA remains unpaid for 45 days. She stresses the HOA has no obligation to notify her of outstanding payments, and she tells the story of her neighbor’s property going into foreclosure when an unpaid $145 fee went unpaid for 46 days. “My neighbor ended-up paying an attorney more than $5000 to solve a $145 dispute; where’s the community’s best interest in that?”
Nationwide HOA protestors advocate dissolution of their developments’ micro-governments and restoration of their communities to the larger jurisdiction and protection of the city. They note community residents will receive all the services they currently enjoy without interference from “aesthetics police,” and they will save up to $250 per month. Traci Schmidt speaks for many of her fellow dissenters: “I don’t care what color my neighbor paints his garage door as long as I get some respect for my rights and due process.”
Richard Gallagher is a freelance blogger, who writes about local government matters. If you are interested in pursuing a career in this area, he suggests you learn more about online degree options in political management.
– Marie Chan
