Tag Archives: property rights

What about your Property Rights?

By Deborah Goonan
(Independent American Communities Blog, http://independentamericancommunities.com/)

Spokespersons for the US Common Interest, Association-Governed Communities industry give plenty of lip service to the concept of property rights. But what does that mean for special interests such as Community Associations Institute (CAI), National Association of Home Builders (NAHB), and National Association of Realtors (NAR), to name three of the biggest players in the HOA industry?

I’ll let you in on a little secret: the industry is not interested in preserving your individual property rights, or even your Constitutional rights, for that matter. When CAI, NAHB, and NAR speak about property rights for residents in HOAs, it is generally in the context of balancing the rights of owners with the rights of the Association.

CAI attorneys are especially vocal about the rights of Associations. In their Public Policy Guide, here’s what CAI has to say about private property rights: (emphasis added)

Community Associations Institute (CAI) supports protections that enable property owners to challenge governmental taking of common or private property. CAI opposes legislative or judicial actions that would limit or restrict the ability and rights of community associations to maintain control over association common property.

Read between the lines. When CAI refers to “private property,” it is really talking about the Association’s “private” property. However, to be more precise, commonly owned property is, in fact, collective not private. And that collective ownership is structured as individual shareholders in a corporation.

Due to its collective nature, a homeowner or condo or cooperative association almost always holds more rights than the individual. It is the Association that controls and spends assessment funds collected from individual owners. And as we all know, the one that holds the purse strings tends to hold power and influence.

Whose interest is served by HOA industry groups?

Here’s my observation: both CAI and NAHB (and related investor groups) want to increase and preserve the power of Owner Association Boards. That’s one of the most insidious hazards of HOA living, not only for owners, but also tenants. But one needs to recognize that these special interest groups seek to preserve the power of HOAs for different reasons.

CAI benefits from a powerful HOA Board that will engage in contracts, that will in turn collectively pay millions to their CAI-members: management companies, attorneys, insurance and reserve professionals, landscape companies, and other community service providers.

NAHB and investor groups, on the other hand, create and control HOA Boards. They find it imperative to control the voting interests – and therefore HOA finances. From their perspective, it is of critical importance to maintain developer’s rights and a corporate shield from liability for as long as possible. At heart, these real estate moguls do not trust common owners to properly manage what they see as their Creations and Empires.

But individual homeowners and residents also endure the effect of other conflicting interests of builders, developers, and speculative investor groups. After all, developers and their affiliates are the ones who can choose to cut corners on construction and do fracking right under your house, but yet they don’t want to be held accountable for resulting health and safety hazards or damage to your home. Association-Governed Residential Communities are often intentionally designed to provide ongoing income streams that outlive the developer’s construction phase.

Too many developers and savvy investors are the kind of people who want the right to sell homes and condos at inflated prices, and then take over the association and buy back your property at pennies on the dollar. These are the folks who want to turn a residential property into their personal real estate investment – as they morph what was sold as owner-occupant communities into poorly managed apartments or Airbnb, VRBO hotels.

The Realtor association (NAR) has its own special interests — they want their members to sell as much real estate as possible and avoid legal liability for selling you a money pit, or a bad investment. Of course, some real estate agents are ethical, but the current system with regard to sale of property with HOA strings attached lacks accountability.

But by far the biggest consumer problem we face is this: federal government policy makers and local politicians often bow down to these special interests and throw the rights of individual housing consumers under the bus.

It’s time to change that dynamic and shift rights back where they belong – to individual consumers of housing. Learn more at Coalition for Community Housing Policy in the Public Interest, http://www.chppi.org/