The Sagas of Smith and Jones

guest blog by Norman McCullough, who lives in Henderson, Nevada

Consider:

Homeowner Smith – (Not living under a Home Owner Association.) 

Mr Smith is a senior citizen who purchased a new home. Being a prudent and forward thinking man, Mr Smith plans to repaint his home in ten years. He knows Nevada weather can be harsh. He estimates the future cost at $2,500 and he sets aside $250 every year for the project. In ten years Mr Smith accumulates the $2,500 needed to get the job done. To his good fortune he finds a company that’s willing to do the job for only $1,750, leaving Mr Smith with $750 to spend on his wife and children. He is rewarded for diligently taking care of his property.

Now take the case of Mr. Jones. 

Mr. Jones (also a senior), belongs to a Homeowner Association that has been investigated by the Federal Government. It seems the board has been stashing away money from excess dues collections and not returning it to the members as required by federal law. A portion of his dues was used to pay the fine imposed by the I.R.S.

Jones is one of 162 homeowners who have also set aside the required $2,500 to paint their homes. Mr. Jones, too, has discovered that only $1,750 is needed to paint each of the 162 homes.

Now do the math. A logical assumption would be that the board would return the excess funds ($2,500 – $1,750= $750) to each of the 162 HOA members who paid the excess dues. But assume that and you would be dead wrong. You see, this board knows the excess funds in a non-profit corporation might raise suspicion at the Internal Revenue Service. So the Association board comes up with a wily plan to avoid revealing the existence of any excess funds.

The board magically ‘shrinks’ the actual size of all the homes in the neighborhood! No kidding! To avoid returning the excess money to the homeowners, 149,850 square feet of stucco surface needing paint has suddenly vanished from the records. Also gone is all the money set aside to do the painting. The Association has effectively robbed the 162 homeowners of the $750 overpayment and then covered up the deception with some weird math. Mr. Jones will not get the $750 returned to him.

When a family buys a home in an HOA and they sign the Contract they are literally giving up many of their constitutional rights, specifically the right to go to court. Not only does the HOA dictate what color your house should be, but more often than not the board abuses the laws that are supposed to protect the consumer from fraud. 

By the way, I am one of the 162 homeowners who live in one of the homes that suddenly shrank. And I’ve done the math.