Conflicts of Interest Abound in the World of HOAs

guest blog by Deborah Goonan

What if your condominium leaks like a sieve? What if the streets flood every time it rains? What if your condo building develops foundation cracks and unexplained build up of mold?

Owners may assume that reporting serious problems to the Board will result in sincere concern and earnest investigation of possible construction defects. They might expect the Board to insist that responsible parties pay for damages and repairs. But what if one of the association Board members is affiliated with the Developer?

Residents of Boathouse Condominiums, Bay City, Michigan, have complained of numerous defects but have run into resistance. Their Board has denied their request to seek defect claims against the developer of their 37-unit high-end boathouse conversion, Marina Place LLC. The Agent of the Developer’s corporation just so happens to be a member of the Board at Boathouse Condominiums.

So nineteen residents have filed their own lawsuit against the Developer and construction company, alleging numerous defects that allow water intrusion into the units, and a faulty foundation. But the lawsuit also lists the HOA as a defendant, for failure to address their concerns.

The Developer denies knowledge of defects, and seeks proof of damages.

Attorneys for both sides are already engaged. This battle could get expensive.

(link to news story on Boathouse Condominiums)


Please follow & like us :)


Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

3 thoughts on “Conflicts of Interest Abound in the World of HOAs

  1. Nila Ridings

    I wonder?

    Did the 37 buyers of these units ask themselves these questions at the time of purchase: Do I have the money to pay my 1/37 of the cost to rebuild this structure? Can I afford a litigation against the engineers, contractor, sub-contractors, and designers in an effort to recover the expense of the re-construction?

    While it might seem prestigious to say you live in a condo that is so exclusive only 37 owners will occupy it, it also means construction defects and disaster rebuilds could very well fall on 37 owners to pick up the tab. Not to mention, the litigation process could take years while the structure further deteriorates.

    Potential resales probably just bit the dust, too because Realtors and residents will remember the story of the condo building having major problems for many years to come.

  2. Cynthia

    Great blog, Deborah. The HOA issue you write about is unfortunately only too common in HOAs, COAs and POAs (HOAs). Aside from the lack of accountability, is the criminality and lack of oversight in many states. I am going to post an email I got from Norm McCullough, of Nevada What he writes should not be specific to Nevada alone, as the HOA abuses, criminality, lack of accountability and oversight are apparently abundant in many other states. I believe all voters in Pennsylvania, California, Texas, North Carolina, Arizona, Colorado, Florida, South Carolina, Arizona, Florida, New Jersey, Georgia and any other states that have horrific, criminal and “non accountable,” HOA issues should be asking the same question. Whether in and HOA, or not, these abuses are going to end up costing the taxpayers a lot of money.

    From Norm McCullough:
    “This is a message to the Two Majors Qualifiers who seek to be the Next Governor of The Great State of Nevada.

    Scandal and corruption are two words that are not welcomed by anyone who seeks the responsibility’s that come with the job of governing a State like Nevada, yet we know that Nevada has a problem that is largely being ignored and now is the time to state what you are going to do about it. I am referring to the ongoing Federal Investigations into the Homeowner Association Industry and the scandalous and illegal scheme to infiltrate and control Homeowner Associations to gain control of the ability to spend the money raised from Nevada citizens who purchased a home in a Homeowner Association. It is not enough to let the Federal Government find and punish the perpetrators, it should be the State Governors job to see to it that it never happens in the first place. I would like you both to declare “It will never happen again — Not on MY watch”

    This problem needs to be faced head on and you need to listen to the people who live in Nevada and put their money in the care of untrained and unprofessional volunteers who are never punished by the State because of the forgiving Nevada Statutes that are supposed to regulate the HOA Industry but have been proven to be worthless words on paper. The Nevada Real Estate Division is a complete disaster and the dispute resolution process is biased and unworkable. Every day more Nevada citizens are finding out their civil rights are routinely ignored by State employed “Investigators” and other State officials who are more interested in clearing off their desk than they are in seeking justice for HOA homeowners.
    If you continue to ignore the problem it will only get worse. Already there is evidence to suggest that having a home in an HOA is a financial detriment to the owner.



Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.