HOAs As “Mini-Governments”

guest blog by Deborah Goonan

A recent article published at Virginia’s TimesDispatch.com, has summarized the proliferation of HOAs as follows:

“(Homeowners’) associations are nearly ubiquitous for new residential housing in the Richmond area, embraced by developers as a way to handle long-term care of common amenities and by local officials as “mini-governments” that can help maintain order and property value.”

The article’s author, Ted Strong, interviewed several county officials on the subject. For readers who may doubt claims of some home buyers that it is nearly impossible to find HOA-free housing in many parts of America, just feast your eyes on the following blatant admissions by Richmond, VA, area officials representing Henrico County:

Kirk Turner, Chesterfield County’s director of planning, said his county wants the associations in the vast majority of cases. “From our standpoint, we actually encourage the creation of an HOA….”

At this point, “probably 100 percent” of new subdivisions in Chesterfield County of at least 20 lots have associations, Turner said.

“To me, the HOA is like a mini-government,” said Henrico County Attorney Joseph P. Rapisarda Jr.

There you have it. The ubiquitous nature of HOA-Land is driven by supply-side expediency and economics. The Developer gets to increase housing density, and therefore, profits. Local planning boards encourage HOAs, because such organizations are viewed as extensions of local government.

Developers love to preserve their “visions” – i.e. perpetual control – of communities they have created. Local governments love the fact that they can just sit back and collect property tax revenue, and leave strict code enforcement to HOAs.

Says Attorney G. Elmore, of the Community Associations Institute (CAI)-member Community Association law firm:

“Associations often help to preserve developers’ visions for common features or aesthetics.”  Elmore is an attorney at Chadwick, Washington, Moriarty, Elmore & Bunn P.C., which represents community associations extensively.

“Well-kept common features help property values and a neighborhood’s livability,” he said. “And associations are necessary if a neighborhood hopes to maintain aesthetic standards stricter than those in county laws.”

Ah, CAI’s vision now becomes crystal clear: without HOAs, aesthetic standards would suffer and property values would plummet. Or would they?

Do we really buy Elmore’s premise?

I think it is true that HOAs can, and often do, enforce stricter aesthetic standards than counties. But, is that a good thing for residents? Not necessarily, when strict standards result in costly lawsuits over flagpoles or home-based businesses.

And taking it one step further, Elmore fails to mention that HOAs can, and often do, enforce standards that limit Constitutional rights of free speech and expression. He also forgot to mention that HOAs tend to fall short when it comes to upholding important government duties such as conducting fair elections and handling disputes over violations with sufficient due process.

Isn’t that the least residents should expect from “mini-governments?”

But wait a minute – back in 2007, CAI issued the following press release in regard to the Supreme Court decision in Committee for a Better Twin Rivers v. Twin Rivers Community Association. Back then, the court decided that HOAs are not governments, and CAI happily echoed the sentiment. Here’s a quick refresher:

• The Twin Rivers decision held that residents of an association not only have the right to express themselves; they also have the freedom to adopt reasonable policies regulating expression in their communities.

• Community Associations are not governments, but rather, private agreements among neighbors; the New Jersey Supreme Court ruling indicated that the government should be respectful of these private agreements.

• Homeowners’ rights of expression and speech are not changed in New Jersey or elsewhere by the Twin Rivers decision, but rather, the case affirmed residents’ freedom to adopt reasonable policies governing such expression.

• Although courts across the country may find the decision in Twin Rivers persuasive, it does not have the binding authority of precedent outside of New Jersey.

• At its core, the Twin Rivers decision supports the rights of residents within community associations to make reasonable decisions for themselves without being second-guessed by courts or politicians.

Well, CAI better get their local government allies on the same page. Are HOAs “contractual agreements” or “mini-governments?”

The last statement about residents making decisions for themselves is blatantly false on its face in most Associations. The Developer creates rules long before there are residents, even before construction begins. And the HOA Board – often controlled by Developers for many years – makes nearly all decisions on behalf of its residents. In reality, the Twin Rivers decision supports the rights of the HOA Board to make most, if not all, decisions, and not be second-guessed by any branch of US government.

Last but not least, note the veiled admission of classic CAI philosophy – that the HOA Board of Directors (aided and abetted by the Community Manager and/or the HOA Attorney) is absolutely essential to maintaining the “vision” by “taking the lead on enforcement, “ because individual owners cannot be relied upon to exercise good judgment.

“It’s a lot easier to maintain a certain style or look or quality if you have an organization taking the lead on enforcement as opposed to relying on individual owners,” Elmore said.

(link to Times Dispatch article on HOAs as mini-governments)

(link to CAI news release about Twin Rivers decision in 2007)