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If you study the evolution
of homeowners associations (HOA), often referred to as Common Interest
Developments (CID) you will quickly begin to see a familiar pattern develop in
the stories this industry uses to justify its existence to a public that is
growing increasingly dubious. Listed below are the five most popular HOA
Without a Homeowner’s Association, the homeowners would desecrate the
neighborhood and destroy the property values.
This is a very common
argument that most HOAs use to justify invasive policies of over management.
These HOAs invariably paint a picture of a world gone mad in which abandoned
automobiles, washing machines, and television sets are strewn about the
“Without the CC&Rs,
there are no neighborhood standards to provide guidance and instructions to
residents for living in the community. Such things as cars parked on lawns,
boats and recreation vehicles kept on premises, unsightly signs in yards, and
non-domestic animals kept on residents properties would be the result.”
Out on the Ridge, October 2003.
In other words, without the
“guidance and instruction for living in the community” provided by a Board
of Directors, the homeowners would most certainly revert back to the primitive
ways of their prehistoric ancestors.
The truth is that
the situations that these HOAs describe almost never occur; the overwhelming
majority of conflicts that arise between homeowners and HOAs involve petty
squabbles over subjective interpretations and personal preferences. These
battles typically erupt over where and what kind of plants can be planted;
where, how high, and what color a fence can be; what kind of “passenger
vehicles” can be parked on the property and where; when garage doors can be
open, and when they can’t; when trash cans can be placed out front, and when
they can’t; when a flag can be flown and when it can’t; whether kids can
have a basketball hoop or not; and even whether or not kids can play in their
own front yard.
The basis for these pretty
disagreements can be found in almost all deed restrictions; we’ll call it the
“interpretation clause.” In our own CC&Rs, it can be found on page five,
have the power to construe and interpret any covenant herein that may be vague,
indefinite, uncertain, or capable of more than one interpretation.”
Do a little research and
you’ll find that, regardless of whether a clause may be vague or not, most
HOAs interpret and construe with an incredible degree of abandon, and even
engage in the fabrication of new covenants whenever the mood strikes.
“The CC&Rs allow the
board to "interpret" the deed restrictions provided by the developer,
giving it and the ACC wide berth in determining what is appropriate for Shavano
Ridge.” Shavano Ridge board member, March 2004
The Lie: You knew
what you were getting into when you bought your home.
This statement is offered
as the usual line of defense whenever a board of directors is accused of
misconduct. It is an excuse that many homeowners are already very familiar with.
“By purchasing a home in
Shavano Ridge, you accepted the covenants that govern our community and you are
bound by them.” Out on the Ridge, February 2004
That quote states that the
simple purchase of a home in this subdivision constitutes full disclosure on the
part of the seller and acknowledgement of all restrictions on the part of the
buyer. There is no suggestion that a verbal or written disclosure actually take
place. In short, what they are saying is buyer beware.
The notion, that it is
solely the obligation of the homeowner to determine the true nature of the
property, is further emphasized in this next quote:
“…a homeowner is on
notice of the existence of deed restrictions/covenants by the very fact that
such documents have been duly filed and registered with the appropriate state
and county entities.” Shavano Ridge Meeting Minutes for August 2004
What they seem to be saying
here is, “catch us if you can.” When you read that passage, you can’t
escape the notion that somebody is trying to hide something from you.
The truth is that,
although sellers are required to make disclosure of the CC&Rs at some point
in the sales process, thanks to the lobbying efforts of the industries trade
organization, the Community Association Institute (CAI), the law leaves it up to
the sellers own judgment as to when this information should be revealed. Many if
not most, homebuyers are unaware of the existence of deed restrictions and are
not properly informed of their true meaning by their sales representative. As a
March 2004 homeowner survey revealed, most Shavano Ridge homeowners were unaware
of what they were getting themselves into when they bought their home.
“When you were buying
your home, do you believe the seller informed you of the deed restrictions in
time for you to make a well-informed decision to buy?
YES – 29; No-42.”
It is no secret that this
confusion on the part of the buyer is created by design. Over the years the CAI
has lobbied legislatures across the nation to limit their responsibility
regarding the disclosure of deed restrictions prior to a sale. Consequently,
homebuyers are often only made aware of the existence of these restrictions at
the moment the final documents are signed. This untimely disclosure assures the
seller that the buyer is emotionally committed to the sale and is not likely to
back out of a deal when they finally are made aware of the deed restrictions. It
also assures the seller that the homeowner will not have an opportunity to read
the deed restrictions prior the sale. For the seller, the final moments of the
closing of a sale is the most optimal time to reveal the fact that deed
restrictions apply. When the developers were selling homes in Shavano Ridge,
this is the tactic they used. In interviews with recent Shavano Ridge
homebuyers, it was not at all surprising to find that this was also the selling
practice preferred by resale agents. However, it should be noted that just
reading the CC&Rs will not provide buyers with a true understanding of the
trouble they may be facing if they decide to purchase the property, since nearly
all conflicts are a direct result of a board’s interpretation and creation of
Obviously, the industry
feels that timely disclosure of deed restrictions would have a negative effect
on sales, and they spend a great deal of time and money lobbying lawmakers to
ensure that the buyer is not in a good position to make a well informed decision
regarding deed restrictions.
“The CAI successfully
amended bills or worked toward killing bills that could have been harmful to our
industry." Connie Heyer, lead lobbyist for the Community Associations
The Lie: It’s a
To anyone familiar with the
activities of homeowners associations, the notion that a HOA has any resemblance
to an American style democracy is ridiculous. Never the less, many HOAs have
tried to foster that very unsupportable notion.
“…the HOA board and the
ACC are a democratic organization no different from congress. We attempt to
represent the community.” Shavano Ridge board member, March 2004
The truth is
that, with a high level of homeowner participation, a HOA could operate in a
democratic fashion; unfortunately, there never is a high level of homeowner
participation. Once the developer turns the HOA over to the homeowners, nearly
all HOAs quickly degenerate into an oligarchy.
The reason for this is simple: most homeowners, especially those with
jobs and children, do not have the time to participate in HOA activities. This
situation creates a void, which often attracts those most likely to abuse the
position; it’s a simple fact of human nature and the property management
companies and their lawyers depend upon it for their livelihood.
The groundwork for abuse is built into the HOA system.
Unlike the American system
of government, there are no minimum levels of education or competency required
to be a board member.
Unlike the American system
of government, board members cannot be held legally responsible for their
actions. They are provided legal representation paid for by the homeowners, and
if the board decides to bring suit against a homeowner for any reason, the
homeowners will pay for all legal expenses.
fathers devised a system of checks and balances to insure that even the best and
the brightest statesmen the country had to offer would not fall victim to the
corrosive influence of unchecked power.
Unlike the American system
of government, a HOA has no system of checks and balances. HOA board members
simultaneously occupy the legislative, judicial, and executive branches without
oversight. The board creates rules without homeowner input. In disputes with
homeowners, the board acts as accuser, judge, and jury.
As for oversight, the board
has made it wants no witnesses to or documentation of their activities.
“…the Board of
Directors determines meeting dates, times and places, as well as who may attend
them…” Shavano Ridge meeting minutes, August 2004
“The Board of Directors
of private corporations, like our HOA, can set policy as to whether meetings can
be taped.” Shavano Ridge meeting minutes, August 2004
“…meetings held with
individual homeowners to resolve a complaint or covenant issue…are only open
to the board and the specific homeowner(s)…no other parties are allowed to
attend these meetings.” Shavano Ridge meeting minutes, August 2004
So, lets sum it up:
No competency requirements
No checks and balances
And full use of the
people’s funds to carry out their activities
Well, this situation could
possibly be similar to some congress somewhere in the world—thank God it’s
Whenever longtime board
members are accused of wearing out their welcome they will often raise this
“We cajole people to run.
Not our people, any people.” A Shavano Ridge board member, March 2004
The truth is that,
although homeowners do not generally volunteer in droves, Shavano Ridge has been
much more fortunate than the board would have you believe. Over the years, many
homeowners have volunteered to help out; many of those would be volunteers claim
the board greeted them with varying degrees of indifference, rudeness, and in
some cases, outright hostility—lots of hostility.
“We have been shocked and
disappointed to see how some well meaning neighbors and friends have been
treated at board meetings.” Shavano Ridge homeowner, February 2004
“…I was horrified at
the disrespect given my neighbor by the board…their attitude was sit down,
shut up, or we will take action against you.” Shavano Ridge homeowner,
“There is no common
courtesy or respect. That’s why many people don’t go to meetings.” Shavano
Ridge homeowner, February 2004
“This board and the
neighbors that attend these so called board meetings are a disgrace. I have
never seen adults act in such a disgraceful manner!” Shavano Ridge
homeowner, April 2004
Many HOA boards, do their
best to restrict participation to only those individuals who share their own
particular views and value system; and with homeowner apathy being as pervasive
as it is, it’s fairly easy to do.
“We need several
interested candidates to run for places on the board, but each time someone new
desires to serve, they are shot down by the establishment—the current board,
who want to control the subdivision.” Shavano Ridge homeowner, February
The Lie: It’s a
That is a line that every
board has used at one time or another. Often times it is true that some board
members are under appreciated for the good they do. But if this really were such
a miserable undertaking than why is it that some board members keep coming back
again, and again, and again?
The truth is that, for some people, being a board member is a very satisfying position with a number of rewards and perks. The types of people that are attracted to, and truly enjoy, these volunteer positions, too often, turn out to be the neighborhood authoritarians, the control freaks; every neighborhood has them. Abrasive and or adversarial personality traits are not uncommon. These people are the lynchpin of the HOA system; management companies and association attorneys depend upon their willingness to engage in conflicts with homeowners to generate a steady flow of income. And, backed up as they are by an institution that would make any third world totalitarian dictator emerald green with envy, they generally prove to be quite up to the task.