Let’s suppose you are King of the World, and it’s your job to re-write the rules governing Homeowners Associations. Let’s also make the assumption that some kind of neighborhood controls are necessary to ensure that property is kept in good condition. Possibly another assumption is that many homeowners would continue to be apathetic about neighborhood governance. The goal, here, is to build a friendly neighborhood, not one that scares people and drives them into their caves. How would you change the current system to avoid corruption, abusive board members, making liens rare, and making liens fair?
I’d love to hear your solutions, no matter how wild.
RECORD HOA ASSESSMENTS with County Recorder’s Office so that they become PUBLIC RECORD for prospective homebuyers.
FILE FINANCIALS WITH THE SEC (SECURITIES EXCHANGE COMMISSION). In fact, some HOAs already report to the SEC (e.g. “hotel condos”). Homeownership in an HOA is like owning stock, you, generally, own only a fractional share of ownership within the HOA. HOAs that are usually committing fraud have a nasty habit of nondisclosure of financials. Hold HOAs accountable by mandatory financial reporting to the feds. If HOAs refuse to comply with financial reporting – fine them!
THE FIX WILL HAVE TO COME AT A *FEDERAL* LEVEL because state politicians like those in Nevada are far too corrupt. Besides, FEDERAL-SUBSIDIZED LOANS are at risk with these fraud HOAs (e.g. Fannie Mae, Freddie Mac, FHA, etc.) and, ultimately, U.S. taxpayers will be footing the bill for this massive HOA fraud.
None of the information contained herein is to be construed as legal advice.
They should not be corporations, but villages. What protects homeowners in those local governments?
I lived in a modest middle class neighborhood for 25 years and never heard of any problems except that the commercial buildings in the village center were not kept nice.
Peggy… you’d be wise to stay in that neighborhood. When it comes time to sell your home, you may very well discover that your home has risen faster in value that homes in nearby HOAs!
Would like to buy your book.
Hi Anne,
“Neighbors At War! is going to the printer on Tuesday. I’ll make sure you’re first on the list. I think you’ll like it since it contains new and interesting information that’s not yet part of the national HOA discussion.
No rules for private property unless a problem literally spills over into neighboring property such as actual spills, smells or loud continuous noise late at night. County codes are enough. No homeowner has unequal power, and the board responsibilites are assigned by lottery and short term limit.
I can not think of any that the county would not have, and those probably are also overreaching. I don’t compromise liberty.
I have to go along with Peg. City and county codes already guard against obnoxiousness and nuisances. While Constitutionally respectful neighborhood rules could enhance these local regulations, the problems begin when it’s time to enforce them, or they are changed or added to by a few people and applied to all. Since you can’t have rules without an enforcement mechanism, I see no way around the problem except to ditch the rules, and thus the enforcement.
The obvious way to make liens rarer is to forego allowing them for anything other than unpaid assessments. In other words, fines and irregular fees cannot be used in a lien situation. Payment plans that apply to assessment fees first, not behind interest, fines and lawyer’s fees, should also be required before placing a lien.
What really ought to be against the law are non-judicial foreclosures by an HOA. Probably even judicial ones. Let the liens be enough.
Ask not ‘WHAT your neighbor is doing’ but rather ‘HOW is your neighbor doing’. (Borrowed from Paula Franzese.)
PS. I’m glad the book is coming out. Been waiting for it. It will be available on a Kindle, right?
Seashell. It’ll be on any format you want. I personally like the book formadt because it’s always fun to try for an author’s autograph.
> “Neighbors At War! is going to the printer on Tuesday.
You really need to change the title before that happens.
“Neighbors at War” is accurate and descriptive.
But the sub-title,
“The Creepy Case Against Your Homeowners Association”,
should be changed to
“The Case Against Your Creepy Homeowners Association”.
Otherwise, you’re making it sound like opponents of HOAs are the “creepy” party.
Now see what you’ve gone and done. I’ll end up buying two books, one for the iPad (don’t need glasses to read it) and one so I can try for the author’s autograph. How do I go about getting the sig?
I’ll remember you and sign it in any way you want.
Since everyone in the association pays equal dues, and the restrictions are supposed to be equally enforced (LOL), the duties and responsibilities of the board should be equally shared. Why not an annual lottery for board positions.? You said “any idea”. A few are getting all the power, and their “friends” are treated a little “more equal”. I have noticed that the “friends” say one thing to the board members, and something quite opposite to others.
Yes, “creepy homeowners association” is a great description. There are many other words that can describe the way that human beings protected by a group can go after each other. Creepy is a good word. Let’s think of good energy and light and see what happens to communities.
I was actually going for the alliteration value. Still, you’ll find enough creepiness throughout!
I recently found this web site and have been reading some older posts. Would love to give my thoughts on this subject: 1. I would dissolve the HOA. 2. Sell off any common property. 3. Have the city/county laws take care of any code violations.
Knowing that dissolving the HOA would never happen, here are my other thoughts:
-Serving as an HOA board or committee member would be mandatory, as well as short term limits, and the members would be chosen at random. (the lottery idea is a good one!) It’s difficult to gain absolute power, take kickbacks, and/or embezzle with a one or two year term.
-HOA’s must submit financial reports to a state or federal entity. Significant fines for late reporting, maybe even jail time for the treasurer. (I’m not kidding)
-Liens should only be used for non-payment of assessments, not for fines. (as stated by an earlier post). Liens for assessments should have a minimum amount equal to 6 months of dues or $500 before they are filed, and must not include late fees or interest. This would keep the HOA from filing a lien and making money for an attorney. It would be much better for the homeowner to pay the HOA first!
-HOA’s could not sue homeowners for non-financial issues. This would be very unpopular with HOA attorney’s, but it would be in the best interest of the homeowners. In Florida, we must use mediation first, but it, too,is a joke because the mediators are ex-judges and attorney’s and their job is to have both parties settle- there is no decision of which party is in the right. So the HOA pays for 4 hours of HOA attorney fees and the homeowner pays for 4 hours of their attorney fees and they split the cost of 4 hours of mediator fees. Who is really getting the most benefit out of mediation?
-Any rules that affect a homeowners lot must be voted upon by 80% of the homeowners. The use of proxies would be banned. If 80% of the neighborhood doesn’t care to vote on a rule, then it shouldn’t be passed.
-All HOA meetings must be held within 4 miles or less of the community. (Our HOA meetings are held at least 8 miles away and at 6:30 pm during the week. How many working homeowners can really make those meetings?)
-HOA members must vote to pursue a lawsuit. Again, it should be a high enough percentage of members. Most homeowners have no idea when a board decides to sue one of their neighbors until the fees are in the tens of thousands.
I’m guessing that most of us would agree with most of your points. The problem is how do we initiate such an election?
I am enjoying reading your book and have lisented to you Shu’s show. She called me last week after I sent her a note about my HOA abuse. No where have I heard about how a board member has suffered from serving on a board and trying to get her fellow members to do the right thing.. I was arrested, handcuffed and incarcerated for 18 hours in the Scottsdale city jail because I discovered mismanagement of funds and abuse of power by my fellow board members. When I asked them to clean up their act they went after me with every obnoxious possible legal entanglement they could to remove me as a board member. It’s two years later and I’m still dealing with the county court system. I personally lost $65,000 and $57, 000 was paid out in legal fees through D & O insurance. The board wasted in excess of $80,000 on their illegal law suits because they control the purse strings and the homeowners live in FEAR of their board at the Venetian Condominums in Scottsdale, AZ.
Sandy, yours is a horrible story. But you are not alone. Two gentlemen in Las Vegas (pillars of the community) were arrested and jailed for the mere ‘crime’ of trying to report financial misdeeds by their HOA. They were later proven to be right, and the IRS filed a massive tax fraud lawsuit against their HOA. http://blog.anthemvoice.org/2013/02/01/federal-civil-rights-suit-against-henderson-by-sun-city-hoa-members/
A man in a Kansas City HOA was beaten with a crowbar by an HOA official (case pending). There are hundreds and hundreds of cases involving violence, vandalism, embezzling and more in Homeowners Associations across America. Just this week, the Las Vegas Review/Journal is reporting on traditional Mafia connections with some of the people indicted and/or convicted in the huge HOA scandal in Nevada.
Sandy, I keep trying to get the word out that the entire HOA industry needs to be investigated for violation of Organized Crime statutes. It sounds like yours needs a little attention from the FBI, too.