Suppose you’re an older couple planning on the peaceful retirement life in a maintenance-free neighborhood. You take your entire nest egg and pay off the mortgage. Your new townhome, condo or single family residence is now yours….forever.
Oopsie! You learn that a developer wants to tear the whole thing down and build something new. You don’t want to move from your retirement home, but the developer gets a ‘majority’ of the residents to take his low ball offer to clear out. Not you. You want him to pay you fair market value. But because a ‘majority’ of your neighbors have moved out, what’s your fair market value now? It’s a heck-of-a-low lower than the others were paid. In fact, your quarter million dollar retirement home is worth ten cents on the dollar. Now the developer can get you tossed out by the courts and pay you nothing.
Yep, that’s the quotable quote emerging from an HOA scandal in Anne Arundel County, Maryland.
Residents of the Russett Community Association voted to throw out the top two board members who homeowners claimed were misusing HOA funds. True to form, the two board members voted that the recall elections weren’t valid because they weren’t approved by the board. Then they fought the recall election in court, and of course they spent neighborhood dues money to pay for their own defense. It happens in thousands of HOAs across the country!
In this case, though, a judge ordered that the two board bullies step down from their positions. They’re not going easily, though. They’ve squandered anywhere from 80 to 100,000 bucks and more in dues money to fight the homeowners in court.
Those of us ‘in the know’ just shake our heads in wonder.
It’s all about the news media, folks. It’s all about publicity. P.T. Barnum was once rumored to have said, “There’s no such thing as bad publicity, it’s all publicity.”
Five years ago I wouldn’t have believed it possible, but now anti-HOA stories have almost gone mainstream. Our misery as HOA homeowners really is getting out there and prospective home buyers are paying attention. Does a Homeowners Association really protect your property values? Well, your property is only worth what someone is willing to pay. So if a growing number of people are saying they’ll never buy an HOA property, doesn’t that mean your HOA is actually hurting your property values?
Oh, the tempers have started furiously flying at the sight of the assessment letters arriving in the mail!
The homeowners in the elite HOA of The Lakes in Visalia, in the Central San Joaquin Valley, are fuming because the private roads need paving (according the property manager and the board) and that requires an emergency assessment of $2,300 per lot. If a person owns three lots they need to triple that payment. Why the need for the emergency assessments? Quick answer: The reserves are underfunded. Which comes as no surprise to all of us who work daily on HOA issues.
The HOA attorney has informed the unhappy homeowners that the HOA board is within its legal rights to demand the assessments. And, if not paid, they will lien the properties until it is.
Our regular readers have heard me say this many times: Buying into an HOA comes with massive risks. When the ink dries on the purchase contract, you become the guarantor for all debts, loans, lawsuits, settlements, liabilities, construction defects and disaster rebuilds for the entire HOA. There is no way to escape it. The CC&Rs are never quite that clear and easily understood, but that’s what it boils down to.
The Lakes of Visalia has now joined the massive number of HOAs that are already war zones. Welcome to the REAL WORLD of HOA living!
Good neighborhoods are quirky. That’s because people are quirky, and their quirks keep us all smiling and make the world go ’round. The problem with Homeowners Associations is that they’re bland, bleached, with a sameness that brings everyone to the same level. Standing out from the crowd is a well-known guaranty of getting yourself sued.
The New Territory Residential Community Association in Sugar Land, Texas is having a conniption fit over some ‘yard art’ in front of one family’s home. Other families have decorative lions in their front yards. But the Hentschel family has put up some beautifully made statuary that’s unique: metal sculptures of a velociraptor and a T-Rex.
Of course, they’ll get liened, fined and probably sued. And that’s a shame. I would give my eye teeth to be able to live next door to the Hentschel family!
