Category Archives: Handicap

Marketing of HOAs

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guest blog by Beanie Adolph

Incredible! How can something so destructive of family life and of the American system of governance continue to dominate American housing?  MARKETING! Chant the lie over and over:  HOAs protect property values. THEY DON’T!  Promise Utopia but hide the reality.  Deny every plea for full disclosure – for openness.  In 2004, two realtors were discussing on an industry blog how to ensure a buyer knew “what he was getting into” and concluded “…if ALL the potential pitfalls are enumerated, no one in his right mind would purchase.”

Most buyers saw the opportunity of owning the home of their dreams at a manageable price with the added inducements of “amenities” previously available only to members of country clubs. There was, then, and still is the lie that HOAs protect property values. There was not and still is not any disclosure that:

  • The quoted cost does not include the extra costs, e.g. increase in assessments and all types of fees.
  • The Reuler-Hailey paper* states “… some HOA managers contract with HOA boards at below-market rates with the expectation of making up the difference from individual owners. How? With a myriad of specific purpose fees, such as resale certificate fees, document fees, collection fees, inspection fees, and violation enforcement fees.”
  • Most new developments are HOA developments and buyers really do not have a choice.
  • Buying into an HOA is far worse than co-signing a note with strangers. A note has a fixed amount, defined terms, and can be paid off. In an HOA there is a lien that can never be paid off. The homeowner is a guarantor for all debts incurred by the HOA, and his house is security for their spending sprees.
  • The reality is that amenities are not “freebies” but burdens that constantly deteriorate, and are the responsibility of the homeowner.
  • HOAs are private quasi-governments that regulate and control the behavior of citizens without the same due process and equal protection clauses of the 14th Amendment.
  • The HOA system places rules and regulations above the rights and freedoms guaranteed to all Americans.
  • Once an HOA is established the governing documents ensure its continuance forever.
  • The HOA Industry constantly lobbies state legislators to increase their power – their control.  Their bills usually have homeowner-friendly names but not homeowner-friendly results. Lobby Watch, June 1, 2011, revealed funds raised for PACs, the distribution to the legislators, and how they voted.

Why do homeowners endure this?

Two of the most powerful motivations are fear and greed.  Homeowners, legislators, and politicians bought the concept that HOAs protect property values.  No facts were ever given to support the statement, but prospects of pink houses, cars up on cinder blocks, and unacceptable neighbors were the threatened  alternative.  In one TV debate the CAI attorney must have thought one car on cinder blocks was not scary enough.  He described a non-HOA community adjacent to his where one house had “6 or 7 cars up on cinder blocks, grass overgrown, trailers out.” When the goal is to instill fear the argument has no limit.

It is a fact that property values are determined by the economy and affect homes in and out of HOAs.   According to an exhaustive study of Harris County homes, homes not in HOAs fared better. Fear was and still is a major factor.  But in HOAs the fear of being targeted with fines, fees, and foreclosure keeps most defenseless owners silent.

* Statutory Evolution of Condominiums and Property Owners Associations in Texas, by Sharon Reuler and Roy. D. Hailey, September 2002. Mortgage Lending Institute, U.T. School of Law

The Failed Legacy of HOAs

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guest blog by Deborah Goonan
Let’s not sugar-coat the truth about so-called planned communities.
Part of the reason that HOAs move toward obsolescence is because they are not, and never have been, true communities, in the sense of being created of, by, and for the people. HOAs have always been created by Developers, to protect their narrow set of interests at a certain point in time. 
 
The Tuscan Villa community from the early part of this century is about as desirable as the Brady Bunch house with avocado paneling and hideous wallpaper. The difference is that Brady Bunch era houses have usually been updated several times over the past 4 – 5 decades. 
 
The larger difference is that older, traditional neighborhoods have evolved naturally over time.  Small children become teens, that grow up and move out. Parents grow older. Eventually they sell and move elsewhere. But new young couples and families with children move in to take their place. The neighborhood includes several generations among its residents, each younger generation breathing new life into the neighborhood and adding its personal touch to homes, both inside and out. 
 
While it is true that some cities have done an abysmal job of maintaining a healthy economy, leading to blight in some cases, the vast, vast majority of American cities, towns, boroughs, townships, and counties continue to survive and thrive for many decades, even more than a century. 
 
The same cannot be said for HOAs and Condominiums. There has never been an attempt to create planned communities with lasting legacies. The purpose has always been to create exclusive (Balkanized?) enclaves with a particular theme or lifestyle, subject to the ever-changing whims of the market. The goal has always been to squeeze the maximum number of homes and profit onto available land. The architectural and landscape standards were created to keep the HOA or Condo in a perpetual mode of being “ready to show” to buyers. Like the pages of a slick real estate brochure. Just like cars, HOAs have a limited life span: planned obsolescence.  
 
Ah, but that creates new opportunities for redevelopment, does it not? 
 

Community Associations Institute (The Disinformation Institute)

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guest blog by George Staropoli

Think in terms of the Third Reich and the Ministry for Public Enlightenment and Propaganda, Josef Goebbels in charge.

CAI is the modern incarnation of the Ministry. If, as has happened, CAI goes unopposed with its ongoing propaganda campaign about the grand and glorious benefits of HOAs without even whispering “constitutional violations” or “de facto private governments” who will believe anything is amiss?

What? Those malcontent, troublesome homeowners who don’t know how to live in a community with rules? That handful of trouble makers? They can’t even write decent legislation! Let the CAI lawyer/lobbyists explain the issues to you legislators so you can make better decisions.

Who would you believe?

Over the years CAI in Arizona has been basically silenced in the public media, because I would confront, challenge, and expose their lunacies and false statements whenever I could.

In the 2000 – 2005 time period the CAI repeatedly slandered homeowner advocates. We often heard statements from legislators like, “You’re just trying to get out of a contract.” “You agreed and you should have read your contract.” “Anyone who didn’t read or understand their CC&Rs and signed anyway was really stupid. I wouldn’t do anything like that.” Or even worse, “If you don’t like your HOA, just move out. That’s all!”

This year the Arizona Legislature approved SB 1482 without any questions being raised in committee. The bill was simply voted on and passed. Why? An almost identical bill was passed last year but failed in the courts. Also last year I repeatedly confronted and exposed CAI simply by quoting erroneous statements their lobbyists had made in public. Many legislators began to realize CAI was feeding them bad information. Of course, the previous law was eventually thrown out by the courts because it was fundamentally illegal.

However, CAI lobbyists still walk the halls of the legislatures whispering in each lawmaker’s ear, spreading the same old disinformation. This will never change unless voters contact their legislators and truly educate them on the issues.

More Reason For HOAs To Fear The Southwest Drought

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As I’ve said many times on this blog, our nation is facing a massive financial crisis involving a pending collapse of the dollar, with nowhere to hide. All it will take is a tipping point, just a single event. It could involve an investment gone wrong, a weather event, a crisis involving war between two nations anywhere in the world, or some moment where the world fears the stability of the US dollar. Mortgage companies will massively decrease lending for home purchases. And there’s no doubt these same mortgage companies know that the most fragile investments are in Homeowners Associations where property values can become wildly unstable because of misfeasance or malfeasance by HOA officers or managers.

But the science story linked below is one I’d never considered.

(link to drought induced earthquakes)

 

The HOA War Against Ham Radio

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Despite FCC rulings that support amateur radio hobbyists and the installation of ham radio antennas, Homeowners Associations have mightily resisted. Hobbyists have been harrassed, fined, and sued by HOAs which insist that neighborhood covenants don’t have to pay attention to federal law.

But there’s a new bill introduced in Congress which could prove interesting if it gets wide support. Republicans and Democrats are signing on to the bill. Hobbyists are mounting a nationwide campaign to get it passed into law. Of course, the HOA industry is fighting it tooth and nail, claiming such nonsense as “this is a bill that would invalidate all CC&Rs.”

But as our frequent guest blogger and commenter, Deborah Goonan, says, it’s an example of how going federal can bring results.”

Amen to that!

(link to story on amateur radio parity act)