What Should Federal HOA Regulation Look Like?

guest blog by Deborah Goonan

We have a huge, systemic problem in the US. It used to be that regulation was enacted and enforced to protect the People, the taxpaying constituents of government. The purpose of regulation was to uphold individual rights and to honor our federal and state Constitutions.

Over the years, that original purpose has been perverted by pervasively symbiotic public-private partnerships between large corporations and every level of government. Unfortunately, many of America’s elected public servants have sold out to special business interests that contribute heavily to campaigns and pay lobbyists to create and promote self-perpetuating legislation.  Even some of our elected judges have shifted their loyalties to corporate and government cronies instead of individual Americans.

The great citizens’ challenge presented to us in the 21st century is restoring America’s values to upholding the inalienable rights of its people. American government’s focus must shift away from protecting profits and revenue of power players, to the detriment of We the People.

In the HOA realm, the current power players are Developers, NAHB, CAI, NAR, FHA, Freddie Mac, Fannie Mae, HUD, ULI, and local governments that benefit from increased property tax revenues. Forgive me if I might have missed a few.

It is a daunting problem. Where to begin?

I have observed that there are a few instances where the HOA almost always loses in court: discrimination based upon federally protected-class status like race and disability are two that come to mind. But most rights to freedom of speech and expression, access to due process, and use of personal property are significantly limited under the cover of so-called contractual agreements written by the power players.

The disturbing truth is that corporate real estate interests have gained excessive control and nearly free reign to exploit HOA owners and residents because laissez faire government policy and practices aid and abet their efforts. But We the People have elected these so-called leaders! (Or have chosen not to vote)

So the first order of business is for individual Americans to reassert our inalienable rights. That starts with becoming educated constituents and voting for public servants based upon their personal character, and not upon false rhetoric supported by wealthy corporations. We need to elect men and women that truly serve the interests of Americans as individuals.

The second order of business is to push for HOA legislation that upholds the Constitutional rights of owners and residents. The overall goal is to limit the power HOAs exert over owners and residents – to get HOA de facto government out of the way! It may sound contradictory, but Federal regulation of HOAs must result in fewer, less complicated laws governing their operation.

Federal Regulation would start by stripping HOA Boards  – private corporate entities – of their authority to enact rules, to fine homeowners, and to lien and foreclose on property. All of these matters would be deferred to local code enforcement and the court system on a very limited basis, with a strict litmus test: does the transgression of the owner or resident rise to the level of causing significant harm to fellow citizens? And significant harm must not be defined as “anything that might potentially harm property values,” because intrinsic human values must trump values of non-living things and possessions.

Because of the perverted nature of regulation in America, where corporations often create legislation to regulate themselves, in my opinion, a global approach is necessary.

Federal legislation, therefore, must be viewed as the next generation of Civil Rights in America.

1)   No entity, public or private, must be permitted to unduly limit or alter the inalienable rights of any American, as they are spelled out in the Constitution and the Bill of Rights.

2)   Any contract that limits the rights of either party must be set forth in plain language, and explicitly acknowledged by all parties – and the terms of the original contract cannot be subject to modification after the fact, without the express written consent of each individual party.

3)   Furthermore, the government shall have the absolute duty to uphold individual Constitutional rights, and to enforce appropriate penalties against individuals or entities, public or private, that violate those rights, including, in the case of elected officials, removal from office.

Those three sentences alone clearly limit the power and authority of corporate or government entities over Americans.

The end result would be the automatic invalidation of the majority of offensive and trivial provisions in CC&Rs, just as previously enacted federal Fair Housing legislation has invalidated overtly discriminatory deed restrictions real estate sales and leasing practices.

No complex, lengthy regulatory manuals required. Less truly is more.

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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.

6 thoughts on “What Should Federal HOA Regulation Look Like?

  1. Cynthia

    An excellent blog post that should be read by millions. Especially, the 65, or so million homeowners in HOAs, every elected official, both state and federal, all law enforcement, every housing advocacy and housing investigative agency employee, all attorneys, and all insurance and real estate industry employees!

  2. Cynthia

    I would like to comment on one statement you made in your blog post. You said, “I have observed that there are a few instances where the HOA almost always loses in court: discrimination based upon federally protected-class status like race and disability are two that come to mind.” I believe these “wins,” may be dependent on what state, or locale the HOA abuse, or criminality case is in. Pennsylvania does not even investigate, or if they do they go right to the HOA board doing the intentional and willful discrimination and abuse, and tell them what the homeowner reported to them. The homeowner is then abused even more. Those at the PA Human Relations division is mean and they victimize the victims further. Most every investigative agency I have had to deal with over a number of years is exactly the same, they have a “blame the victim,” mentality, instead of looking at the truth and facts of the HOA abuses and property thefts.
    It is my understanding another state stopped allowing their Human Relations Commission from investigating, or prosecuting HOA cases, regardless of how criminal, discriminative, or abusive they are.

  3. tom dee

    It does sound good but it does not address matters like a HOA director caught with his hands in the pot but facing a friendly face for his/her punishment. People under the thumb of the HOA directors should be certain that the hoa directors know punishment will be certain. The homeowner really is helpless in todays HOA world.

  4. Deborah Goonan

    Tom, Cynthia,

    Your concerns center on “equal protection under the law” and enforcement, right?

    That is covered with this:
    3) Furthermore, the government shall have the absolute duty to uphold individual Constitutional rights, and to enforce appropriate penalties against individuals or entities, public or private, that violate those rights, including, in the case of elected officials, removal from office.

    It is our Constitutional right that the appropriate federal and state authorities (through the 14th amendment) UPHOLD the law. That means they have a duty to investigate all allegations, and use even handedness in judicial process and enforcement of the law. Failure to do so would put governemnt officials at risk for disciplinary action up to and including removal from office. Our tax dollars pay for equal protection!

    So if a rogue Board member, association manager, attorney, judge, law enforcement officer, or other authority engages in theft, embezzlement, discrimination, harassment, abuse, or failure to prosecute or judge within the limits of the law – they shall all be held accountable to the people who pay their salaries through either assessment or tax dollars.

    Of course, the finer legal details can be worked out to ensure that all such acts are absolutely and explicitly included under equal protection.

    Cynthia, you are quite correct that not all cases of discrimination are duly investigated and prosecuted, but many, if not most, that are adjuducated do prevail in court. Access to the courts is a problem for people of limited financial means.

  5. HollyHOA

    I’m all for Federal HOA regulation, but it will be about 40 years too late if and when it’s enacted. And it will still take lawsuits to uphold the law. The people who gravitate to HOA/COA boards are usually not fair-minded, and I’ll even go as far to say they are drunk with power. Many board members feel state laws don’t apply to them.

    We desperately need federal regulation, because in some states, a home buyer has a very small chance of buying a condo or home without an HOA/COA. All those homeowners with no reasonable way to fight back over petty and sometimes, illegal, actions. In Florida, we also have Community Development Districts (CDD’s) that are similar to a community wide master association. None of this is free. We still pay county taxes along with HOA and CDD fees. What once was a “reasonable” HOA fee can increase quickly depending on the HOA boards wants and needs.

    If I could go back 10 years, I would never have purchased my current home with its HOA. I was sucked into a shiny new home purchase. There has not been any positives about the experience at all. It’s been a rude awakening of the power of a few HOA board members, the apathy of the other homeowners, and a huge disappointment of the justice system.

    1. Deborah Goonan

      The reason Florida CDD’s are not truly government by the people is because the original landowners and/or developer get to retain Control for 7 to 10 years. By that time the developer controlled board can be well entrenched and difficult to unseat in general elections. Of course there are inherent conflicts of interest with developer control, particularly with steering contracts to affiliates, and approving annual budgets.

      The advantage of CDDs over HOAs is the fact that they are chartered as governing entities and treated as state actors. So at least every registered voter gets to vote (votes are not allocated by number of properties owned) and due process is handled by the public court system for matters under control of the CDD. The problem is, most CDD’s also have an HOA that handles most of the architectural control and code enforcement issues. And those are the matters that are most likely to result in conflict.

      The key is to eliminate developer control, And put control in the hands of the residents from day one.


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