True believers in the HOA system say, “Well, at least it protects my property value.” That statement only comes from the spectacularly stupid.
When you sign those real estate documents, you are essentially becoming a legal partner with every other member of your HOA. As thoroughly documented in my new book, Neighbors At War, when you have all those other homeowners as partners, you’re liable for every single accident, temper tantrum and lawsuit across the landscape. You’ve made yourself a legal financial partner with people you’ve never even met, possibly many people you’ll NEVER EVEN meet.
“OK, I’m just spreading the risk,” you might respond. But with a rogue HOA board, you will probably be sharing the expenses for every single one of the nonsensical actions your board takes. Your deep pocket will be probed by every trial lawyer in every slip-‘n’-fall, and every little outrageous conduct case that comes along. Just shut up, open your checkbook and turn your head. We’ll tell you about the damage and the special assessments later.
In the case linked below, a Homeowners Association in Illinois is going to have to defend itself against a couple who allege that actions by their HOA caused a stream to overflow its banks and ruin their five HOA properties. Surely this HOA has insurance protection, right? Yes, but that comes with a deductible and a limit. Should this couple be awarded ten million dollars, the HOA’s one million dollar insurance policy will be helpless, hopeless, hapless and useless.
It’s the Lake Iroquois Homeowners Association. And you’d better bet homes in that HOA will be impossible to sell.
You should have listened to me.