The Future of the HOA                        Back

Homeowner Associations Across The Country Say They've Entered A Kinder, Gentler Age.

By Tim Vanderpool

While associations promise to maintain property values and keep neighborhoods neat, their booming growth is obviously pushing many Americans across the fence-line of civility.

Heavy-handed rules and arbitrary enforcement are often blamed for pitting neighbor against neighbor, and turning serene subdivisions into raucous battle zones. At the same time, industry insiders tout a movement towards more humane associations, where yelling matches are replaced by relaxed regulations and calm mediation.

Either way, widespread conflicts are prompting a thorough reevaluation of associations and their roles.

With roots in 19th-century Boston, these quasi-democratic bodies -- also called residential community associations or common interest developments -- now govern an estimated 42 million Americans. Today it's nearly impossible to purchase a new home that doesn't come with an association attached.

Typically installed by developers to govern budding villages, they provide amenities ranging from recreation centers to trash pickup. Under their tutelage parks are established, swimming pools maintained and architectural consistency imposed, all financed by membership fees. Rules are set through deed restrictions, and overseen by boards of directors comprised of neighbors and developers' representatives.

Along with promoting a comforting uniformity, they also control the minutiae of daily existence for affected residents, right down to where you plop your petunia patch. All too often, say critics, that power is abused by neighbors with scores to settle.

The result may be a national backlash. "Common interest developments are really starting to cause consumer resentment," says Frederick Pilot, president of the Common Interest Consumer Project based in Sacramento, California. Pilot calls such associations "a vast social experiment with an uncertain future."

He cites a growing number of complaints on his local consumer-oriented radio show, and on the project's website. "Mostly we hear about boards making decisions in secret, and not soliciting member input when they make decisions," he says. "But the bottom line is this: when people buy a house, they don't realize they're buying into a set of regulations already established by a corporation."

Those mandates often include big fines for tiny infractions such as planting the wrong type of shrubs, leaving a garage door open or even erecting a flagpole. Failure to pay up can mean a lien against your home, or even foreclosure.

Lawmakers are listening as well. In April, Texas legislators passed a law requiring associations to hold their board meetings in public. They also tightened due-process procedures for legal actions against homeowners. Other rapidly growing Sun Belt states with a plethora of associations, such as Nevada, are following suit with crackdowns on recurrent excesses.

And last spring, the Arizona lawmakers passed a pair of bills affecting associations. One would allow other liens to take priority over those filed by associations against a particular property (not exactly homeowner-friendly legislation).

But the second bill does give embattled residents a chance to fight back, by requiring that associations disclose all information they have related to pending action against a member.

Such reforms -- timid as they may be -- are long overdue, says Evan McKenzie, a University of Chicago researcher and author of Privatopia: Homeowner Associations and the Rise of Residential Private Government. The book is highly critical of many association practices.

Left unchecked, they "can really create little neighborhood Hitlers," he says, adding that "only lawyers tend to come out ahead when the dust settles."

Still, McKenzie is guardedly optimistic that both associations and the legal community see a need for change. "I think they realize that it comes down to giving these communities a chance to become communities," he says.

Foremost among those now trumpeting reform is the Community Associations Institute, a Washington, D.C.-based trade group for association managers, lawyers and homeowners Such efforts represent a big shift for the CAI: when McKenzie's book was published in 1994, an institute spokesperson labeled it "tabloid journalism." Today, however, McKenzie and the CAI enjoy closer ties; the author has spoken at CAI-sponsored forums, and his writing appears in the group's publications.

CAI spokeswoman Donna Reichle blames the earlier discord with McKenzie on "a lack of communication." But she says her organization has increasingly focused on enhancing harmony within associations. The topic was recently discussed at a national conference, and is the subject of seminars for association managers and attorneys. "We're directing more of our energy towards building communities, and away from nit-picking and rigid enforcement of rules," Reichle says.

In its drive to promote kinder, gentler associations, the CAI recently published a cute paperback titled Be Reasonable! How Community Associations Can Enforce Rules Without Antagonizing Residents, Going to Court, or Starting World War III.

Even Wayne Hyatt, an Atlanta attorney considered a national leader in association law (and closely linked to the CAI) claims that his profession is undergoing reform. "I think there's been too much focus on restrictions, and not enough on the people that live in these communities," he says. "It's time for association lawyers to get away from business as usual."