Category Archives: Government

HOAs As “Mini-Governments”

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guest blog by Deborah Goonan

A recent article published at Virginia’s TimesDispatch.com, has summarized the proliferation of HOAs as follows:

“(Homeowners’) associations are nearly ubiquitous for new residential housing in the Richmond area, embraced by developers as a way to handle long-term care of common amenities and by local officials as “mini-governments” that can help maintain order and property value.”

The article’s author, Ted Strong, interviewed several county officials on the subject. For readers who may doubt claims of some home buyers that it is nearly impossible to find HOA-free housing in many parts of America, just feast your eyes on the following blatant admissions by Richmond, VA, area officials representing Henrico County:

Kirk Turner, Chesterfield County’s director of planning, said his county wants the associations in the vast majority of cases. “From our standpoint, we actually encourage the creation of an HOA….”

At this point, “probably 100 percent” of new subdivisions in Chesterfield County of at least 20 lots have associations, Turner said.

“To me, the HOA is like a mini-government,” said Henrico County Attorney Joseph P. Rapisarda Jr.

There you have it. The ubiquitous nature of HOA-Land is driven by supply-side expediency and economics. The Developer gets to increase housing density, and therefore, profits. Local planning boards encourage HOAs, because such organizations are viewed as extensions of local government.

Developers love to preserve their “visions” – i.e. perpetual control – of communities they have created. Local governments love the fact that they can just sit back and collect property tax revenue, and leave strict code enforcement to HOAs.

Says Attorney G. Elmore, of the Community Associations Institute (CAI)-member Community Association law firm:

“Associations often help to preserve developers’ visions for common features or aesthetics.”  Elmore is an attorney at Chadwick, Washington, Moriarty, Elmore & Bunn P.C., which represents community associations extensively.

“Well-kept common features help property values and a neighborhood’s livability,” he said. “And associations are necessary if a neighborhood hopes to maintain aesthetic standards stricter than those in county laws.”

Ah, CAI’s vision now becomes crystal clear: without HOAs, aesthetic standards would suffer and property values would plummet. Or would they?

Do we really buy Elmore’s premise?

I think it is true that HOAs can, and often do, enforce stricter aesthetic standards than counties. But, is that a good thing for residents? Not necessarily, when strict standards result in costly lawsuits over flagpoles or home-based businesses.

And taking it one step further, Elmore fails to mention that HOAs can, and often do, enforce standards that limit Constitutional rights of free speech and expression. He also forgot to mention that HOAs tend to fall short when it comes to upholding important government duties such as conducting fair elections and handling disputes over violations with sufficient due process.

Isn’t that the least residents should expect from “mini-governments?”

But wait a minute – back in 2007, CAI issued the following press release in regard to the Supreme Court decision in Committee for a Better Twin Rivers v. Twin Rivers Community Association. Back then, the court decided that HOAs are not governments, and CAI happily echoed the sentiment. Here’s a quick refresher:

• The Twin Rivers decision held that residents of an association not only have the right to express themselves; they also have the freedom to adopt reasonable policies regulating expression in their communities.

• Community Associations are not governments, but rather, private agreements among neighbors; the New Jersey Supreme Court ruling indicated that the government should be respectful of these private agreements.

• Homeowners’ rights of expression and speech are not changed in New Jersey or elsewhere by the Twin Rivers decision, but rather, the case affirmed residents’ freedom to adopt reasonable policies governing such expression.

• Although courts across the country may find the decision in Twin Rivers persuasive, it does not have the binding authority of precedent outside of New Jersey.

• At its core, the Twin Rivers decision supports the rights of residents within community associations to make reasonable decisions for themselves without being second-guessed by courts or politicians.

Well, CAI better get their local government allies on the same page. Are HOAs “contractual agreements” or “mini-governments?”

The last statement about residents making decisions for themselves is blatantly false on its face in most Associations. The Developer creates rules long before there are residents, even before construction begins. And the HOA Board – often controlled by Developers for many years – makes nearly all decisions on behalf of its residents. In reality, the Twin Rivers decision supports the rights of the HOA Board to make most, if not all, decisions, and not be second-guessed by any branch of US government.

Last but not least, note the veiled admission of classic CAI philosophy – that the HOA Board of Directors (aided and abetted by the Community Manager and/or the HOA Attorney) is absolutely essential to maintaining the “vision” by “taking the lead on enforcement, “ because individual owners cannot be relied upon to exercise good judgment.

“It’s a lot easier to maintain a certain style or look or quality if you have an organization taking the lead on enforcement as opposed to relying on individual owners,” Elmore said.

(link to Times Dispatch article on HOAs as mini-governments)

(link to CAI news release about Twin Rivers decision in 2007)

 

Indiana D.A. Threatens Lawsuit Against HOA Over Flag Dispute

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guest blog by Deborah Goonan

Finally, some common sense prevails in an Indiana flag dispute, thanks to intervention by Hancock County Prosecuting Attorney Michael Griffin.

In an October 23rd letter to the Fieldstone HOA Board of Directors, Griffin strongly urges the Association to resolve its dispute by November 1, or face legal suit to stop enforcement of penalties against the Willits household.

Check out the link to Griffin’s letter below, in which he states, among other things: “In summary, the association does not have a legally‐sufficient “substantial interest” invoked by the Willits’ display. Under the Flag Act, without a “substantial interest,” the association cannot regulate the Willits’ flagpole and American flag.”

And, furthermore, that “Aesthetic preference is not a legally‐sufficient “substantial interest” of the association with respect to American flag display, and I know of no other reason for an association to distinguish between flagpoles attached to the facade of a home and free‐standing flagpoles.”

By October 29, the matter was resolved. The Willits’ flag can stay; pole and all, including the POW-MIA flag. Fox 59 news reports that a compromise deal has been reached. The Willits will have to remove the flag and flagpole in the future when their house is sold.

The dispute dragged on for months. Griffin became involved after the story received national attention in the media.

Although the dispute is officially resolved, and the Willits received hundreds of phone calls of support, some of their neighbors have sent them anonymous hate mail, and Board members have also received threats.

What price, happiness in your HOA?

ps: Perhaps in Florida, Duval County Prosecuting Attorney can follow Griffin’s lead, with regard to Larry Murphree’s flag dispute with Sweetwater by Del Webb Master HOA?

(link to Fox 59 television news report on flag dispute)

(link to letter from Prosecuting Attorney Griffin to Fieldstone HOA Board)

 

Balance of Power in U.S. Senate Based On HOA Chickens?!?

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Some stories are just too weird to embellish, even for the sake of humor. But the U.S. Senate seat from Iowa may boil down to a neighborhood dispute over chickens.

Democratic Congressman Bruce Braley is running for Senate in a razor thin race. Braley has a vacation home in the ritzy Holiday Lake neighborhood in Brooklyn, Iowa. Covenants in the neighborhood say, “No animals or birds other than household pets can be kept in the subdivision.” But one of Braley’s neighbors (also a registered Democrat) keeps chickens on her property as ‘therapy animals’ for mentally handicapped youngsters.

The chickens apparently strayed into the Braley’s yard and litigation was threatened. The owner of the chickens tried to make amends with a gift of eggs, but the Braleys wouldn’t have any part of that.

Now, there’s a hot new Iowa Republican attack ad with some talking chickens making fun of Braley’s threatened lawsuit. You can read the rest of the details at the links below, but the story is just too ridiculous for words.

If the balance of power in the U.S. Senate shifts in this election, finally, FINALLY folks in Congress might start talking about the idiocy and meanness of neighborhood disputes in Homeowners Associations.

(talking chickens ad)

(washington post take on the chicken dispute)

 

Should There Be Federal Standards & Regulations For HOAs?

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guest blog by Deborah Goonan

My colleagues and I have posed this question on several occasions in HOA discussion forums frequented by Community Associations Institute (CAI) members – mostly community managers and attorneys, with an occasional Board member.

Of course, the knee-jerk HOA industry reply is “NOOOOO!” The standard mantra is that HOAs do not want or need more government control. Why would Association members want some bureaucrats in far-off Washington DC telling communities how they ought to govern themselves? They reason that members of HOAs are quite capable of choosing their own destinies, within their own “form of democracy.”

In theory, perhaps. In reality, perhaps not.

I find it curious that, while HOA cheerleaders abhor government interference in any form, they see nothing wrong about the excessive and often petty interference of HOAs over the property and lives of its owners and residents.
Typical HOA-manager/attorney/developer reasoning is along these lines, “We all know how very important it is to establish rules about what you can put in a flowerpot, how long your dog’s leash can be, where your children are NOT allowed to play, and what colors are acceptable for your front door. For these types of decisions, you, American HOA resident, are incapable of clear thinking and sound judgment. Therefore, the developer’s attorneys have crafted a legal contract detailing every aspect of your limited rights to dwell in your HOA, subject to swift and sure penalty should you fail to conform.” In practice, you may be subject to swift and sure penalty simply in order to keep you in line.

For the official party line on government regulation of HOAs, see page 47 of CAI’s Public Policies (emphasis added in italics):

“Community Associations Institute supports effective state legislation–when it is deemed necessary for consumer protection, conversion limitations, protections for ongoing operations or other additions to existing statutes or common law to ensure that community association housing is developed and maintained consistent with legitimate public policy objectives and standards that protect individual consumers, balancing the legitimate rights of the development industry.

Local legislation concerning the creation or governance of community associations is antithetical to a balanced, well-considered assessment of all issues and interests affecting community associations. It also encourages a patchwork of regulations within an individual state and is, therefore, better dealt with at the state level.”

According to CAI, if you live in an HOA, your legitimate rights are secondary to the rights of the corporate HOA – which is, in fact, the creation of a Developer.

Read this policy between the lines: municipal level legislation would make the HOA’s job too inconvenient, potentially limiting where and how HOAs can be built. However, at the state level, developers can pretty much call the shots to “balance” their legitimate rights.

And how does CAI justify its encouragement of “a patchwork of regulations” within the US, on a state-by-state basis, when their own public policy strongly discourages differing regulations within each state? That stance defies logic. Why is it that owners and residents find vastly different HOA laws in each state? The HOA industry lacks federal consumer protection standards that exist for virtually ever other major market sector in America.

What makes the HOA (i.e. Development) industry so special, that it should be deserving of less scrutiny and oversight than, for example, insurance, banking and financial services, healthcare, or public and private education?

By now it’s old news: HOAs are obviously vulnerable to financial mismanagement, corruption, and white-collar crime. Money crosses state lines and with over 65 million taxpaying residents nationwide, these issues certainly rise to the level of general public interest.

Therefore, there most certainly is a need for federal level legislation and regulation of HOAs.

(link to CAI Public Policy)

 

Texas Judge to Decide Meaning of ‘Family’ in HOA

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guest blog by Deborah Goonan

This is an update to an earlier blog about the Plantation Resort 2 in Frisco, Texas. The PR2 HOA is filing a lawsuit against City House, to block use of a home they recently purchased and renovated for use as transitional living for homeless youths.

The local CBS affiliate has been covering the story, and the link to their video is below.

While PR2 HOA has allowed two young women to move into the home owned by City House, they have made it clear they do not want any more residents to join them. The house was originally intended for transitional living for 6-8 youths. Public records indicate that PR2 homes are good-sized, most with 4 bedrooms and between 2500 – 3000 square feet, with an average sale price hovering around $270,000.

This is the part that really sticks in my craw. A statement made by PR2 HOA Attorney Chad Robinson, Riddle & Williams:

“City House is a great cause. But, on the flip side, we can’t pick and choose which rules we enforce.”

To put this statement into perspective, let’s consider that the real estate industry has had a long history of creating all sorts of deed restrictions and business practices intentionally designed to homogenize neighborhoods in the interest of protecting home values. Up until Fair Housing and Civil rights legislation was enacted in the 1960s, federal housing and lending policies explicitly aided and abetted segregation between the haves and the have-nots, along racial lines.

Since the late 1960s, the real estate industry has created hundreds of thousands of HOAs, many of which continue similar, less explicit homogenizing practices by way of carefully crafted CC&Rs. And because the Rules are considered “contractual agreements,” and HOAs are not acknowledged as de facto governing entities or state actors, a lot of ambiguous and petty restrictions escape federal scrutiny.

In other words, you can agree to any rules and restrictions you want, even if they happen to be petty, socially reprehensible, un-American, or unconstitutional. Remember folks, in HOAs, The Bill of Rights Need Not Apply.

At issue in this dispute is whether a transitional living arrangement fits the definition of “family,” as specified in the governing documents for PR2 HOA. City House believes that their non-commercial use of the home as a stable living environment falls within the definition, but PR2 HOA Attorney Robinson does not.

But in 21st century America, what, exactly, constitutes a family? Gone are the days when most family households consisted of mom and dad with a couple of children. We have single-parent households, same-sex partners with children, families blended following remarriage after divorce or death of a spouse, unmarried couples with or without children, extended families that include grandparents and adult children. And what if you rent the home you own to unrelated roommates? Which of these falls into PR2 HOA’s narrow definition of “single family use?” How many of these variations already exist in PR2?

Next week a judge will hear the case and decide whether City House can continue their great work with homeless youths, and create transitional families in PR2.

(link to CBS-local coverage of Frisco HOA dispute with City House)