The link below is from the Las Vegas Sun newspaper and the column is a so-so explanation of Homeowners Associations. For the completely ignorant it may have a couple of bits of knowledge. The major reason I’m linking it is not because of the column. It’s the comment by a reader about something happening in his own HOA. That single comment is more informative than a dozen Las Vegas Sun columns.
(link to Las Vegas newspaper. DON’T MISS THE COMMENT AT THE BOTTOM!)
Yes, welcome to your new condo. You’re going to love living here. The neighbors all get along and we don’t seem to suffer the kinds of problems felt in many other Homeowners Associations. You’re buying into a little bit of Heaven, your own private home. Welcome, welcome, welcome!
Oh, we’re sorry we couldn’t give you copies of the covenants, the budget and insurance papers in time for your real estate closing. At the time you requested them, the paperwork was tied up in some minor snafu. But it’ll all get worked out soon.
Ah yes, and ignore the story in the newspapers today. Those crooked reporters always make up their facts and get the story wrong. Everybody knows how warped and dishonest the media are. Just sit back and enjoy your new life!
(link to the neighborhood Welcome Wagon!)
Investigative reporters just LOVE websites like ScamBusters and Snopes. It saves us a lot of research time. Those sites are not always right and are subject to mistakes like most of the rest of us. But what a resource! Another of my favorite ones was CSICOP (Committee for Scientific Investigation of Claims of the Paranormal.) But that last one is a little esoteric.
I’ve just learned from one of my frequent email contacts that ScamBusters actually has a blog post about Homeowners Associations. It’s not perfect but it shows how suspicions about HOAs is going mainstream.
I love the FBI. I love the many federal agents I have known. But my pet peeve is that the FBI, which keeps track of annual crime statistics, does not keep track of the number of Homeowners Associations which have been hit by an embezzlement by board members or property managers. Thus, it’s my belief that embezzlement from HOAs is the largest unreported crime in America. Nobody keeps track!
A couple of years ago a multi-million dollar embezzlement impacted a number of HOAs in Denver. Just about every major city has suffered some kind of massive HOA theft. Good grief, Las Vegas lost more than 60 million dollars when a ring of HOA swindlers decided that HOAs were too stupid and weak to stop embezzling. Some of the crooks were among the highest and finest of society. The FBI is credited with sending 43 HOA officials, lawyers, cops and property managers to prison. But I fault the feds for not going further. This same kind of corruption infests HOAs across the country. The corruption is being fed by massive legal fees going from homeowners into the pockets of complicit attorneys. And Legislatures across America know exactly what’s going on, but they refuse to reign in the corruption. It’s all about the money. Never, ever think that money doesn’t play a huge part in keeping a corrupt system alive.
It’s all about the money.
(link to article on how HOAs can protect themselves against fraud and embezzlement)
The HOA industry, and the politicians who support the industry – perhaps for dubious reasons – use the same talking point, over and over again:
“Vote the bums out!”
What a joke! As many have pointed out here on this blog, there are many factors that make a mockery of the fair election process in homeowners or condo associations.
The very first problem is that votes are allocated according to the corporate model of governance, and not based upon a democratic basis of “one person, one vote.” In Association Governed Residential Communities, voting interests (notice I did not say “rights”) are tied directly to the share of property owned within the association.
When investors or developers own most of the property, they hold a majority of the voting interests, and therefore control the Board by default. In this respect, life in an HOA is no different than living under a dictatorial, communist, or fascist regime.
Or, another way to look at it is that, as a homeowner, you become an unwilling pawn in a game of hostile corporate takeover.
But even in cases where the developer or investor group are no longer involved, owners can form voting blocs of like-minded property owners to prey upon the remaining owners. One common scenario pits absentee landlord owners against owner occupants. This is especially common in condominium associations.
In 55+ communities, where many of the owners are in their seventies and older, it can be difficult to find candidates for the board who are healthy enough to serve! That opens the door for relatively young but unscrupulous board members to take advantage of senior citizens living on fixed incomes, and dealing with declining health.
The HOA concept is flawed to the core. The foundation is shaky from Day One.
And on top of that, there are no consistent laws that offer adequate consumer protection.
Why have so many of our elected officials failed to recognize that the HOA industry has, in effect, created an alternative local governance scheme that circumvents Constitutional principles? And what’s more, at the local and state level, misguided housing and development policies have encouraged or, in effect, required the establishment of nothing else but Association-Governed Residential Communities across the state and throughout population growth centers in the US.
It’s time to end the denial of abuse of homeowners and residents of these HOAs, COAs. It’s time to recognize that the governance model is flawed, and that, quite often, the financial model is also precarious at best.
This is America, and people need to be able to not only freely choose where they want to live, but they also must be free to live in peace. Americans should not have to risk losing their property equity and financial nest egg — not to mention their physical and mental health — because they have been sucked into a dysfunctional “community” governed by a mandatory association.
If state and local policies keep pushing these HOAs and building condos, there will very soon be no other housing alternatives. The supply of non-HOA, non-condo property to buy is already in short supply in high-growth real estate markets.
I recently relocated to Central Pennsylvania, where HOAs are not as common as they are in areas surrounding population centers of Philadelphia and Pittsburgh. States such as Florida (where I lived for about 7 years), California, Virginia, Illinois, Arizona, Colorado, etc. have very high concentrations of HOA/condo property and a great deal of problems as a result. Local governments are increasingly required to provide financial assistance to failed or failing Associations with aging infrastructure and inadequate reserves. The industry does not want you to know about this! Advocates and concerned citizens, don’t allow your state to fall into the same trap!
