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Articles of Interest
If you study the evolution of homeowners associations (HOA), often referred to as Common Interest Developments (CID) you will quickly begin to see a familiar pattern develop in the stories this industry uses to justify its existence to a public that is growing increasingly dubious. Listed below are the five most popular HOA whoppers.
The Lie: Without a Homeowner’s Association, the homeowners would desecrate the neighborhood and destroy the property values.
This is a very common argument that most HOAs use to justify invasive policies of over management. These HOAs invariably paint a picture of a world gone mad in which abandoned automobiles, washing machines, and television sets are strewn about the neighborhood.
“Without the CC&Rs, there are no neighborhood standards to provide guidance and instructions to residents for living in the community. Such things as cars parked on lawns, boats and recreation vehicles kept on premises, unsightly signs in yards, and non-domestic animals kept on residents properties would be the result.” Out on the Ridge, October 2003.
In other words, without the “guidance and instruction for living in the community” provided by a Board of Directors, the homeowners would most certainly revert back to the primitive ways of their prehistoric ancestors.
The truth is that the situations that these HOAs describe almost never occur; the overwhelming majority of conflicts that arise between homeowners and HOAs involve petty squabbles over subjective interpretations and personal preferences. These battles typically erupt over where and what kind of plants can be planted; where, how high, and what color a fence can be; what kind of “passenger vehicles” can be parked on the property and where; when garage doors can be open, and when they can’t; when trash cans can be placed out front, and when they can’t; when a flag can be flown and when it can’t; whether kids can have a basketball hoop or not; and even whether or not kids can play in their own front yard.
The basis for these pretty disagreements can be found in almost all deed restrictions; we’ll call it the “interpretation clause.”
“The committee…shall have the power to construe and interpret any covenant herein that may be vague, indefinite, uncertain, or capable of more than one interpretation.”
Do a little research and you’ll find that, regardless of whether a clause may be vague or not, most HOAs interpret and construe with an incredible degree of abandon, and even engage in the fabrication of new covenants whenever the mood strikes.
“The CC&Rs allow the board to "interpret" the deed restrictions provided by the developer, giving it and the ACC wide berth in determining what is appropriate for Shavano Ridge.” Shavano Ridge board member, March 2004
The Lie: You knew what you were getting into when you bought your home.
This statement is offered as the usual line of defense whenever a board of directors is accused of misconduct. It is an excuse that many homeowners are already very familiar with.
“By purchasing a home in Shavano Ridge, you accepted the covenants that govern our community and you are bound by them.” Out on the Ridge, February 2004
That quote states that the simple purchase of a home in this subdivision constitutes full disclosure on the part of the seller and acknowledgement of all restrictions on the part of the buyer. There is no suggestion that a verbal or written disclosure actually take place. In short, what they are saying is buyer beware.
The notion, that it is solely the obligation of the homeowner to determine the true nature of the property, is further emphasized in this next quote:
“…a homeowner is on notice of the existence of deed restrictions/covenants by the very fact that such documents have been duly filed and registered with the appropriate state and county entities.” Shavano Ridge Meeting Minutes for August 2004
What they seem to be saying here is, “catch us if you can.” When you read that passage, you can’t escape the notion that somebody is trying to hide something from you.
The truth is that, although sellers are required to make disclosure of the CC&Rs at some point in the sales process, thanks to the lobbying efforts of the industries trade organization, the Community Association Institute (CAI), the law leaves it up to the sellers own judgment as to when this information should be revealed. Many if not most, homebuyers are unaware of the existence of deed restrictions and are not properly informed of their true meaning by their sales representative. As a March 2004 homeowner survey revealed, most Shavano Ridge homeowners were unaware of what they were getting themselves into when they bought their home.
“When you were buying your home, do you believe the seller informed you of the deed restrictions in time for you to make a well-informed decision to buy? YES – 29; No-42.”
It is no secret that this confusion on the part of the buyer is created by design. Over the years the CAI has lobbied legislatures across the nation to limit their responsibility regarding the disclosure of deed restrictions prior to a sale. Consequently, homebuyers are often only made aware of the existence of these restrictions at the moment the final documents are signed. This untimely disclosure assures the seller that the buyer is emotionally committed to the sale and is not likely to back out of a deal when they finally are made aware of the deed restrictions. It also assures the seller that the homeowner will not have an opportunity to read the deed restrictions prior the sale. For the seller, the final moments of the closing of a sale is the most optimal time to reveal the fact that deed restrictions apply. When the developers were selling homes in Shavano Ridge, this is the tactic they used. In interviews with recent Shavano Ridge homebuyers, it was not at all surprising to find that this was also the selling practice preferred by resale agents. However, it should be noted that just reading the CC&Rs will not provide buyers with a true understanding of the trouble they may be facing if they decide to purchase the property, since nearly all conflicts are a direct result of a board’s interpretation and creation of restrictions.
Obviously, the industry feels that timely disclosure of deed restrictions would have a negative effect on sales, and they spend a great deal of time and money lobbying lawmakers to ensure that the buyer is not in a good position to make a well informed decision regarding deed restrictions.
“The CAI successfully amended bills or worked toward killing bills that could have been harmful to our industry." Connie Heyer, lead lobbyist for the Community Associations Institute
The Lie: It’s a democracy
To anyone familiar with the activities of homeowners associations, the notion that a HOA has any resemblance to an American style democracy is ridiculous. Never the less, many HOAs have tried to foster that very unsupportable notion.
“…the HOA board and the ACC are a democratic organization no different from congress. We attempt to represent the community.” Shavano Ridge board member, March 2004
The truth is that, with a high level of homeowner participation, a HOA could operate in a democratic fashion; unfortunately, there never is a high level of homeowner participation. Once the developer turns the HOA over to the homeowners, nearly all HOAs quickly degenerate into an oligarchy. The reason for this is simple: most homeowners, especially those with jobs and children, do not have the time to participate in HOA activities. This situation creates a void, which often attracts those most likely to abuse the position; it’s a simple fact of human nature and the property management companies and their lawyers depend upon it for their livelihood. The groundwork for abuse is built into the HOA system.
Unlike the American system of government, there are no minimum levels of education or competency required to be a board member.
Unlike the American system of government, board members cannot be held legally responsible for their actions. They are provided legal representation paid for by the homeowners, and if the board decides to bring suit against a homeowner for any reason, the homeowners will pay for all legal expenses.
America’s founding fathers devised a system of checks and balances to insure that even the best and the brightest statesmen the country had to offer would not fall victim to the corrosive influence of unchecked power.
Unlike the American system of government, a HOA has no system of checks and balances. HOA board members simultaneously occupy the legislative, judicial, and executive branches without oversight. The board creates rules without homeowner input. In disputes with homeowners, the board acts as accuser, judge, and jury.
As for oversight, the board has made it wants no witnesses to or documentation of their activities.
“…the Board of Directors determines meeting dates, times and places, as well as who may attend them…” Shavano Ridge meeting minutes, August 2004
“The Board of Directors of private corporations, like our HOA, can set policy as to whether meetings can be taped.” Shavano Ridge meeting minutes, August 2004
“…meetings held with individual homeowners to resolve a complaint or covenant issue…are only open to the board and the specific homeowner(s)…no other parties are allowed to attend these meetings.” Shavano Ridge meeting minutes, August 2004
So, lets sum it up:
No competency requirements
No accountability
No checks and balances
No oversight
And full use of the people’s funds to carry out their activities
Well, this situation could possibly be similar to some congress somewhere in the world—thank God it’s not ours.
The Lie: We can’t get anyone else to serve on the board
Whenever longtime board members are accused of wearing out their welcome they will often raise this defense.
“We cajole people to run. Not our people, any people.” A Shavano Ridge board member, March 2004
The truth is that, although homeowners do not generally volunteer in droves, Shavano Ridge has been much more fortunate than the board would have you believe. Over the years, many homeowners have volunteered to help out; many of those would be volunteers claim the board greeted them with varying degrees of indifference, rudeness, and in some cases, outright hostility—lots of hostility.
“We have been shocked and disappointed to see how some well meaning neighbors and friends have been treated at board meetings.” Shavano Ridge homeowner, February 2004
“…I was horrified at the disrespect given my neighbor by the board…their attitude was sit down, shut up, or we will take action against you.” Shavano Ridge homeowner, February 2004
“There is no common courtesy or respect. That’s why many people don’t go to meetings.” Shavano Ridge homeowner, February 2004
“This board and the neighbors that attend these so called board meetings are a disgrace. I have never seen adults act in such a disgraceful manner!” Shavano Ridge homeowner, April 2004
Many HOA boards, do their best to restrict participation to only those individuals who share their own particular views and value system; and with homeowner apathy being as pervasive as it is, it’s fairly easy to do.
“We need several interested candidates to run for places on the board, but each time someone new desires to serve, they are shot down by the establishment—the current board, who want to control the subdivision.” Shavano Ridge homeowner, February 2004
The Lie: It’s a thankless job
That is a line that every board has used at one time or another. Often times it is true that some board members are under appreciated for the good they do. But if this really were such a miserable undertaking than why is it that some board members keep coming back again, and again, and again?
The truth is that, for some people, being a board member is a very satisfying position with a number of rewards and perks. The types of people that are attracted to, and truly enjoy, these volunteer positions, too often, turn out to be the neighborhood authoritarians, the control freaks; every neighborhood has them. Abrasive and or adversarial personality traits are not uncommon. These people are the lynchpin of the HOA system; management companies and association attorneys depend upon their willingness to engage in conflicts with homeowners to generate a steady flow of income. And, backed up as they are by an institution that would make any third world totalitarian dictator emerald green with envy, they generally prove to be quite up to the task.