It’s not often that the lowly homeowner has much of a chance of getting a fair hearing in court. The vast majority of all rulings are against the homeowner and in favor of the private non-profit corporation. And many’s the judge who’s told a miserable homeowner that he or she should have read his covenants before signing the real estate documents.
Last week’s ruling, though, by the Supreme Court of Virginia was a clarion call to the National Homeowners Association Movement that it can’t stomp on the homeowner’s Constitutional rights forever. Basically the court ruled that the Shadowood Condominium complex in Reston, Virginia cannot assess fines against residents because there was no such permission granted in the development’s master deed. Bam! Pow!
The Bank of America lawsuit against dozens of Nevada Homeowners Associations chugs onward. Earlier this Fall, B of A filed a federal lawsuit claiming that HOAs were illegally charging excessive collection fees and arbitrary fines against homeowners who committed minor infractions of HOA rules and covenants.
In one such case, a family in North Las Vegas moved out of their home and attempted to short sell it through the Bank of America. But the HOA in question decided the home in question had too many pine needles and weeds on the property, and they filed a lien against the home. Although the initial fine was only a few hundred dollars, the HOA dramatically escalated its fines and costs to more than $16,500. That made the home virtually unsaleable.
Homeowners usually get the raw end of the deal when they try to fight the “Bigs” in the HOA industry. Some Homeowners in California are trying to turn that trend around. An HOA in Riverside County has sued three former property managers for “fraud, conspiracy to defraud, breach of contract, and breach of fiduciary duty.” They had employed the management companies for eight years.
Canyon Lake Association then sued its own law firm, Fiore, Racobs & Powers, accusing them of “fraud and malpractice.” They say a lengthy investigation found “no cash management, no separation of accounting duties, credit card abuse by employees, employee salary increases that were not approved by the board.”
Nebraska Senator Mike Schneider is asking the governor to call a special session of the legislature to pass new laws against Homeowner Association fraud. He says he’s been reading a blog on the Las Vegas scandal and he doesn’t like the kind of comments being made about suicides committed by suspects indicted in the HOA scandal. (Hmmm, I wonder which blog he’s talking about!)
The Las Vegas Review Journal reports that 14 more people have taken plea bargains in the FBI’s HOA corruption investigation. That brings the total to 24. This four year investigation has taken way too long, far longer than most. But after its bumpy start, federal agents really started homing in on the fraudsters who’ve cheated so many Las Vegas homeowners and stolen their home equity, costing them their life savings and their homes.
The real tragedy of winding this investigation up early is that hundreds of homeowners who lost their homes will sit and wonder, “what to do?” They’ve been cheated of their entire life savings. But they don’t know who to contact to try to get it back.
