Chapter SixteenIIIChapter Eighteen
If your board members are allowed to have their way, there will be no freedom of speech practiced within your community. The only voice to be heard will be that of your board. If you do not protect your rights, there will always be someone more than willing to take them away from you.
Your efforts to bring your disinterested neighbors up to speed on the evils of the CID industry need not and should not end with a neighborhood website. You can maximize exposure for your website and your cause by publishing your own newsletter.
The newsletter serves to reintroduce your website (or draw attention to any new material you’ve added) to those who may have forgotten it or gotten out of the habit of visiting it, or have just moved into the neighborhood. It also allows you to reach those homeowners who may not own a computer.
It doesn’t hurt to get your message right into the hands of your target audience every once in awhile; a newsletter is more immediate and takes less effort on the part of the reader than having to deliberately cybersurf over to your website.
If you’re planning on publishing your own newsletter, consider distributing it early Sunday morning. We chose this time because residents had more time and were often already mentally prepared for a good bit of reading in anticipation of the Sunday paper.
Try to keep your newsletter relatively short (I would say no more than five double-sided pages), and try to pick the most compelling articles (either highlighting incidents which occurred in your neighborhood or from outside writers on issues of concern in your CID). The hope is that short, powerful stories will induce some of your neighbors to visit your website to learn more about the CID industry.
Here is an example of a newsletter we published in Shavano Ridge.
Volume one, June 2004
We are a group of concerned Shavano Ridge residents who feel our community could greatly benefit from more homeowner participation than has been exhibited during the past twelve years. We feel there is a need for more open communication as well as an outlet for the expression of diverse points of view. To insure that we all live in a community of our own design, we would like to see the homeowners included in the decision making process.
Our goal is to reinstate the simple principals of American democracy, and eliminate the influence of developers and CAI backed management companies and lawyers. In the process, we hope to create the best informed, most community spirited group of residents of any subdivision in San Antonio. Ours is a vision of openness and inclusion, and to that end, we have created the “Shavano Ridge Observer.”
Apathy: the root of all HOA evil
Sooner or later, most people who live in common interest developments become disenchanted with their management company or board of directors, or, most likely, both. Yet, they will often endure their resentment in silence; they don’t know what to do, and so they do nothing—they become apathetic.
What these homeowners don’t realize is that the most powerful weapon that overzealous management companies and/or boards of directors have against the homeowners is the homeowner’s own apathy towards community involvement. The old, well established management companies have learned this lesson well and they count on it to give them a free hand in the governance of your community; they have seen it happen again and again: the control of a homeowners association is passed from the developer to the homeowners; an overwhelming majority of the homeowners quickly become disinterested, and a small clique becomes entrenched on the board of directors. Problems begin to occur when the entrenched board becomes convinced no one knows or cares what is going on in the neighborhood. It’s an extremely common situation all over the country. You will see this scenario played out right here in Shavano Ridge in the story "Wish You Were Here." below.
Apathy exists throughout our society, but it is particularly damaging where homeowners associations are concerned. Homeowners associations lack the system of checks and balances necessary to provide oversight and accountability. There are no provisions in the CC&Rs that address these issues. The only measure of oversight and accountability that can be brought to bear on a homeowners association has to come from the homeowners themselves. If their presence is not felt, it’s likely abuses will occur.
A small, but growing, group of concerned homeowners have decided to attend every meeting of the board of directors; it would be in the best interest of every homeowner in the community if you would join them. The next scheduled meeting of the Shavano Ridge Homeowners Association is set for August 10, 2004.
The Truth about the CAI
The following article was written in response to an article published in the April 2004 edition of Out on the Ridge.
Homeowners associations or Common Interest Developments (CID) came into being in the mid 1960s, but by 1973, this unregulated system of neighborhood governance led to so much mismanagement and fraud that consumer demand for CID housing was in danger of collapsing. To reverse this trend, the National Association of Home builders and the Urban Land Institute organized the Community Associations Institute (CAI). The purpose of the CAI was to encourage professionalism in the management of homeowners associations, and to convince the public that CIDs were a better way to live.
Five constituencies were created composed of developers, property managers, homeowner association directors, lawyers, and other professionals. From the beginning, developers were concerned that the influence of homeowner members would present them with a likely source of opposition, so they convinced the organizers to keep the homeowners in check. This led to a weakening of homeowner support for the organization, which became even more apparent when the homeowner members found they were often not able to afford the costs in money and time necessary to attend local and national meetings. This left support and funding for the CAI largely up to the developers who realized, if support was not provided for the running of the associations they created, their ability to sell the concept of CID housing to the public could be compromised by stories of lawsuits from disgruntled homeowners.
But, as time passed, and the developers become more secure in the public’s acceptance of CID housing, they also contributed less and less of their time and money to the CAI. This left the management companies and their associated lawyers as the most active members of the CAI at both the local and national level; their economic interest in the success of the CID industry encouraged them to take an active role in CAI affairs.
In 1992, the CAI was restructured, and the property managers, who bore the financial burden, took control of the decision making process. Emphasis was shifted to legislative advocacy through paid lobbyists and grass roots mobilization of its thousands of members.
Today, the CAI is viewed by most outside the industry as a trade organization for management companies and association lawyers.
Although the CAI continues to publish many articles, pamphlets, and books on the subject of responsible governance of homeowners associations, in practice, its management company members routinely ignore the advice given. In effect, these publications seem to be nothing more that public relations tools. In fact, one of our own residents, seeking help with an HOA problem, made several calls to the local chapter of the CAI—none were returned. A call to the national office yielded a promise to send some, “helpful informational packets,” which never arrived. Again, the story below "Wish You Were Here," provides a graphic example of this inconsistent relationship between the procedures that the CAI publicly recommends and those that are actually observed by it's followers.
The CAI is very influential in Shavano Ridge. Our management company is a “platinum” member of the CAI, and the company’s owner is a CAI lobbyist. Both our current association attorney and our previous attorney are CAI “gold” members.
In 2003, the CAI and its membership lobbied the 78th Texas State Legislature to defeat several bills and recommendations presented by Houston Senator Jon Lindsay. Below, we have included just a few examples to give homeowners an idea of what the CAI has done for them lately.
Recommendation 1.6 would permit a homeowner, in a case brought against the homeowner, to recover reasonable legal fees from the HOA if the HOA is found to have no reasonable basis to sue the homeowner. No provision exists for owners to recoup their legal defense fees in cases where HOAs unreasonably bring suit.
Recommendation 1.12 would repeal €202.004, Property Code, which provides that a court may assess civil damages up to $200 a day for deed restriction violations. Although most HOAs do not ultimately seek such damages, some associations cite this statute when they notify owners of violations, which lead to unnecessary adversarial posturing.
Recommendation 1.14 would authorize the Office of the County Attorney and/or the Attorney General to investigate complaints and bring suit against HOAs in certain instances. It is unreasonable to expect an individual owner to bring suit against a HOA board to compel them to act appropriately. Enforcement of statutes should not be left to citizens.
Recommendation 1.16 would subject HOAs with mandatory dues, to the Open Meetings and Public Information Acts. Most HOAs argue that associations carry out many of the duties and responsibilities of small governments and should be recognized as quasi-governments. As such, it is not unreasonable to mandate comparable public disclosures.
Senate Bill 949 would give homeowners unlimited access to HOA records.
It seems clear that the CAI’s legislative activity reveals its true character, and for that reason, we believe Shavano Ridge should discontinue its association with the CAI.
“The CAI successfully amended bills or worked toward killing bills that could have been harmful to our industry.” Connie Heyer, lead CAI lobbyist
Voting Your Rights Away
At the general meeting last March, a motion from the floor was made and seconded to change the by-laws to require that complaints made by homeowners against other homeowners by documented, and signed by the complainant. The measure was voted down by a count of 46 for, and 65 against.
Now, as in the past, complaints against Shavano Ridge homeowners can suddenly materialize without any documentation and therefore no accountability on the part of the person making the complaint. This is a policy that encourages irresponsible behavior and undermines the civility of the entire neighborhood; it breeds suspicion, resentment, and hostility.
This policy absolves neighbors of their obligation to use direct communication as a means of resolving disagreements. This “neighborly” method of dispute resolution also presents the added benefit of allowing neighbors the chance to get to know one another, and hopefully, foster a little more understanding and tolerance. Today, in place of openness and communication, we maintain a policy of secrecy and intimidation, which often leads to threats of litigation.
Even the CAI recommends that complaints be documented.
"Complaints from neighbors should be submitted in writing; this avoids changing stories and failing memories."
If homeowners in Shavano Ridge felt a moral obligation to stand by the accusations they made in an open hearing with all witnesses present, as is required by U.S. law, then there would probably be allot fewer accusations made. It’s not wise to leave the responsibility of creating a harmonious community up to a management company; they have other interests.
So how do we, once again, end up looking more like a people’s republic than an American democracy? That can probably be answered in one word —proxies.
Actually, those who may find this policy of “phantom complaints” distasteful may have unwittingly helped to sustain it. The board collected 16 proxy votes from Gordon Hartman Homes, which made the developer the single most influential entity at the general meeting; there is almost no question that those proxies supported the status quo; however, the board also collected many proxies from individual homeowners. Many of these homeowners may be unaware that when a motion comes up from the floor of a meeting, proxy holders have a right to use the proxies they have collected to vote in any way they want, even if the issuer of the proxy had no knowledge of the vote.
Moral of the story; if you want “your” own voice to be heard, you have to be there—it really does make a difference.
Can I Get a Witness?
When disputes have developed between homeowners and the board of directors, the board has often invited the homeowner to an “informal meeting,” to try to settle the disagreement. Board members describe these informal meetings, usually held an hour before a scheduled bi-monthly meeting, as neighborly discussions just between the board and the homeowner.
However, nearly all of the homeowners who have attended such meetings describe them as being anything but neighborly. These homeowners also complain that soon afterwards, the details of what was said and done at these meetings fall into dispute as well.
We feel all parties would be best served if witnesses were present to document these meetings, and so, a group of SR homeowners have offered their services to all residents.
If you are invited to one of these informal meetings, and you would like to have witnesses present to document the proceedings, send your request to [firstname.lastname@example.org or to The Shavano Ridge Observer PO Box 692266 San Antonio, TX 78269] and we will arrange to have a small group of homeowner witnesses present.
The Park That Never Was
Many Shavano Ridge homeowners are upset over the Gordon Hartman Homes development now under construction on our southeast border with the Vulcan quarry. A recent homeowner opinion poll found that 74.5 % of the respondents felt that this development would result in a decline in Shavano Ridge property values. What many residents may not remember is that we once had an opportunity to construct a much different future for Shavano Ridge.
At the general meeting of homeowners in March of 2000, one of our residents came up with the idea to buy the property that Gordon Hartman Homes is now building on and construct a park and recreation area. The board, as well as a few of the homeowners in attendance, raised several objections to her plan; they stated that parks were magnets for crime and drug use; parking and increased traffic would be a problem; there would be the added expense of the purchase, re-zoning, insurance, and upkeep on the property; they also expressed concerns that children would be a source of noise and mischief.
However, a straw vote was taken that resulted in 15 votes for the proposed park, and 15 votes against. The 50/50 vote indicated that there was at least enough interest in the plan to warrant further investigation. The board then advised the resident that if she intended to pursue her idea, it would be up to her to do all the necessary legwork to determine who owned the property and how to proceed with her plan should she find that the property was available; to learn how to do this, the board instructed her to contact our management company because they had the records and legal descriptions she would need. Immediately after the meeting, several homeowners not only offered her support for her plan but also offered to help in the construction of the proposed park.
Throughout the year following the March 2000 meeting, she made numerous attempts to contact our management company representative, but in all those attempts, he was never available to come to the phone and he never returned any of her calls.
Nearly a year had passed when, at a meeting of our cellular on patrol group, a board member told her that the statute of limitations had run out on her plan and the board had decided it was a dead issue.
Whether the majority of homeowners would have shared the board’s concerns, or whether the board’s misgivings would have proved to be justified or not, we will never know; Gordon Hartman Homes acquired the property, and the rest you already know.
How should this situation have played itself out? Well, if our visionary homeowner would have been able to get the procedural information she needed from the management company, a proposal should have been drawn up and put to a vote of the homeowners. Had we followed this democratic procedure, we might have an asset on our southeast border rather than, what many homeowners consider, a liability.
Privatopia, By Evan McKenzie
Dr. McKenzie was one of the first to see the dangers of the new trend of private government in common-interest developments (CIDs) (a/k/a mandatory homeowners associations) and his treatment remains one of the most thoughtful available. Especially useful is his history of the development of the industry’s powerhouse trade organization, the Community Associations Institute.
The CAI started long ago as a balanced entity serving the interests of homeowners as well as others; it has turned into a lobbying arm for professionals who make their livings off of mandatory assessments and the associated legal machinery of collection and foreclosure.
Touted as a selling point to potential buyers by realtors and builders, CIDs exist, as McKenzie cogently points out, primarily as a means for developers to mitigate the rising cost of property by squeezing more dwellings on to less land and bypassing local zoning restrictions and ordinances. The author explains the real motivation for keeping property values high is so that the lenders courted by the developers will be confident that their investment is secure; the homeowner’s interests are irrelevant. The author not only examines the resultant effect upon the individual homeowner, but the long-term sociological and political ramifications as well. "Privatopia" contains some of the horror stories experienced within the CID scenario.
Some issues causing disputes are so trivial as to be laughable were it not for the severe penalties incurred by violators, including huge fines and legal fees, or even loss of ones home in certain situations. This book will be a real eye-opener to many, and should be required reading for anyone currently living in or considering the purchase of a home located within a CID.
Dr. McKenzie holds a law degree from the University of California at Los Angeles and a Ph.D. in Political Science from the University of Southern California. He is currently an Associate Professor of Political Science at the University of Illinois at Chicago and an adjunct instructor of law at the John Marshall Law School. His research specializations are in the area of law and public policy, and particularly urban policy.
Privatopia can be purchased from Amazon, Borders, and Barnes & Noble booksellers; it is also available from the San Antonio Public Library.
Wish You Were Here
There is probably no more convincing evidence that homeowners really need to take an interest in what goes on at board meetings, than what went on at our last board meeting on June 8. In the last issue of Out on the Ridge (April 2004), the board invited homeowners who had issues they wished to discuss to send them to the management company for consideration. The board received such a request on May 24, 2004.
It was suggested that the board consider establishing term limits for board members, and implement a democratic, homeowner voting process to create, amend, and abolish rules and regulations in Shavano Ridge.
It was pointed out that these issues received overwhelming support in a March homeowner opinion poll.
Do you think there should be term limits for Board members? Yes[ 57 ] No[ 14 ]
Do you think the Board should add new rules and restrictions without the approval of the homeowners? Yes[ 3 ] No[ 69 ]
A second issue that was suggested concerned apparent double standards regarding violation enforcement where homeowners received complaints and violation notices for actions that were ignored when committed by board members.
The last issue suggested involved an incident at the general meeting on March 10, 2004. At that meeting, the board’s attorney barred a homeowner from recording the proceedings with a claim that it violated state law as well as the by-laws of SR. Being unable to find any verification of this claim, it was suggested that the board provide verification that this claim was lawful and correct.
Neither the Board nor the Management Company responded to any of these requests.
At the June 8th board meeting the board claimed their agenda was too full to discuss the topics suggested and that the board did not understand the issues.
(You can read this document yourself by going to the website [see web address below] and then going to Board Monitor > Meeting Minutes June 8, 2004.) See if you have trouble understanding what is being suggested.
The board did, however, discuss these topics in the “open forum” before the meeting with the understanding that what was said would not be recorded in the minutes.
With regard to the issue of the recording of the General Meeting, it appears that the board’s attorney was not being honest with the homeowners: no law or association by-law could be found that prevents homeowners from recording the minutes of a meeting. The board then denied the incident ever took place saying it was only “hearsay.” Fortunately, the incident was witnessed and confirmed by another homeowner who was present at both meetings. This situation clearly points out the need to have witnesses present at all times. The board then admitted that it was really their own policy not to allow the recording of the meetings.
On the subject of the independent homeowner opinion poll, the board, obviously unhappy with the results, made every effort to discredit the poll and the homeowners who participated. The board claimed that a sampling of 28.4% of the homeowners was too small to be valid. Some of the homeowners present pointed out that national opinion polls base their results on 3 to 4% of the population. Another homeowner then made the claim that he had heard from both sides that they had stuffed the surveys, and so the board claimed the numbers were not valid. This claim is false. Precautions were taken and the results have been preserved. Only one incident of cheating was recorded. An examination of the documents would certainly cast aspersions upon the board. On the subject of term limits, the board indicated that they were not interested in establishing term limits. This opinion ran contrary to that of the homeowners who voted 57 to 14 in favor of term limits. The board stated that polls should be conducted by third parties. Several of the homeowners present thought that was a good idea and suggested it be pursued. The board responded by saying that they were not interested in polling the homeowners. This opinion is in direct contrast with the published opinion of the CAI. In their book, titled “Be Reasonable,” they state that “surveys are important tools when making important community decisions.” And that “as with almost all rules, it is a good idea to survey the community.” They go on to say “residents should have a role in establishing rules, since they’re the ones who must live by them.”
This is a striking example of the statement made in the earlier article “The Truth About the CAI,” that the writings of this organization, supporting common sense solutions to HOA problems, are in reality hollow public relations tools intended to do no more than to convince the unwary homeowner that the intentions of the CAI and its followers are honorable.
This meeting also served as a vivid example of the homeowner’s own apathy being used against them. It should be all too clear that, up to this point, the board has been given little cause to consider the opinions of the homeowners. The only way to change that situation, if you think change is warranted, is to take part in the process.
If you would like to know more about what happened at the June 8th meeting you will find it by going to the website, clicking on “The Board Monitor” and then on “Meeting Minutes for June 8, 2004.”
If you would like to know more about the meeting scheduled for August 10, join us there.
The Unofficial SR Website
The Unofficial SR Website can be found at http://home.usrw.org The website is dedicated to reinstating common, democratic principals of government in Shavano Ridge through homeowner awareness. The website includes several articles by outside observers of an industry many believe is destroying the American dream of homeownership.
Information is gathered from numerous book, magazine, newspaper, and Internet sources. The website features an Opinions page where homeowners can let other homeowners know what’s on their mind as well as the Shavano Ridge in the News page, where you’ll find articles specifically about Shavano Ridge. If you would like to know how independent observers view the phenomena of Common Interest Development regimes, this is a good place to start.Home
Chapter SixteenIIIChapter Eighteen