The HOA world is buzzing about a multimillion dollar lawsuit filed against the Henderson, Nevada Police Department. It’s a lawsuit that could throw a massive punch in the face of the American HOA movement, especially those which use coersive tactics to intimidate HOA critics.
This really is a wild case. Two elderly residents of Sun City Anthem HOA in Nevada, tried to warn other homeowners that the board was illegally stashing millions of dollars of excess dues instead of returning them to residents. Any organization that doesn’t report such excess collections can face heavy IRS fines.
The board refused to pay attention to the complainants, so the two ‘agitators’ reported the apparent tax fraud to the Henderson Police Department. Keep in mind that a Federal Grand Jury was already prosecuting massive fraud among Nevada Homeowners Associations.
According to the mens’ lawsuit, the Sun City Anthem HOA filed a complaint with Henderson P.D. accusing the two men of filing a false police report. The cops then busted the two men, stripped them, handcuffed the two men to a vertical bar in the city jail, and left them for four hours. The men, one of them a retired Air Force officer, were appropriately outraged.
Their outrage grew as the IRS agreed that the HOA was indeed operating illegally and levied some heavy fines.
Now Col. Robert Frank (ret’d) and Tim Stebbins are suing the City of Henderson for false arrest, false imprisonment and a number of other allegations. The reverberations from this lawsuit could be massive; and massively fun to watch.
Can’t you feel the squirming among HOA board members everywhere?
The article linked below is stunning! Although this embezzler is not connected with an HOA, just consider this: if an undetected embezzler can steal $50 million from a small town, how much could an HOA management company steal from the 20 or 30 HOAs it oversees?
Unbelievable and stunning! Fifty million dollars! Watch your HOA like a hawk!
There’s a pretty good column in the Atlanta Business Chronicle about how the financial meltdown has impacted condo owners. Foreclosures and walkaways hammered the budgets of HOAs, not just in Atlanta, but all over the country. This columnist claims the market has turned around.
But wait! Wait! Financial news on the international and national scale is not good. In fact it’s somewhat bleak. The next decade could be a financial home wrecker. Pray for the best, plan for the worst.
Whenever the news media start trolling for stories about HOA abuse, they seem to be buried with them. This was one of many uncovered by reporter J. David McSwane, of Denver’s Westword Magazine.
He reports that Angela Quinn, a resident in an HOA in Western Washington, was told she could not have an air conditioner in her rental home. She says her neighbor had an A/C unit, and since she was in her third trimester of pregnancy, she figured she could install one in a back window which was not visible from the street.
Angela acknowledges that she has tangled with her HOA in the past, once when she complained about the poor drainage in a mosquito infested pond across the street, once over the state of her lawn, and another time when trash cans weren’t properly stored.
So, Angela shouldn’t have been surprised when she got a letter from her HOA with a picture of her non-conforming A/C unit taken from the back of her house.
Homeowners Associations were created to maintain the appearance of neighborhoods. But it’s a short step from there to micro-managing of affairs of certain homeowners.
Angela says she has rented her home for the past four years, which may actually be her biggest problem. HOAs just don’t like renters. Across the country there are many stories about HOA managers who seem to concentrate their energies on harrassing residents of rental properties, apparently to encourage them to find homes elsewhere.
Despite a few changes in law in such states as Texas and Arizona, Homeowners Associations are developing an increasingly bad reputation because of the ongoing spate of news stories about homeowners abused by the HOA system. Homeowners wrongly believe that HOAs are created to maintain property values and help homeowners get along with each other. Nothing could be further from the truth.
In city after city, stories are published about homeowners losing their homes or being hit with massive fines for petty violations such as being a few dollars late on monthly dues, or leaving the trash can out an hour after the prescribed deadline. And that’s just the tip of the iceberg. Sometimes a Homeowners Association levies a fine just because a member of the neighborhood does a good deed. That’s what happened to Jim Lane, a resident of the Gilead Ridge Homeowners Association in North Carolina.
Lane says he always enjoyed helping fellow neigbors beautify the neighborhood. He says he noticed the neighborhood park had become untidy and unsightly, so he cleaned it up and planted some flowers there. He should have gotten a commendation from the HOA, right?
No, Lane was slapped with a fine for planting some “unauthorized flowers!’
When he refused to pay, he was hit with a lawsuit, a lien on his house and threats of foreclosure.
Lane’s sad case is not unique either. Cases similar to his are popping up in thousands of Homeowners Associations across the country. The stories are causing many people to have second thoughts about moving into an HOA. Even a Realtor’s claim that an HOA might be “one of the good gones” has to be viewed with suspicion. All it takes is a single election of a “problem board member” to completely change the flavor of a neighborhood, making property values decline instead of remain stable.
