If you live in an HOA, and who doesn’t these days?, you are required to pay your share of the common costs in the association. That is only fair. And it is also only fair that you be told how your money is being used. Unfortunately part of the common expenses will sometimes include some pretty hefty costs for litigation. The association may end up in court, and the members of the association will have to cover those costs. But none of this is news and in fact attorney fees should be budgeted for. What appears to be more prevalent these days, is that as part of a settlement agreement, there is a confidentiality clause. Here is how this tends to work; the HOA Board is sued, ends up settling the case and as part of the settlement they agree to pay a sum of money as long as the homeowner agrees to a gag order. The owner is not allowed to talk about the terms of the settlement, if they do, they have to repay the money and start all over again. I have heard of some really nasty conditions. The owner agrees thinking they’ll get that monkey off their backs and be able to get on with the rest of their lives. The problem is that the settlement doesn’t always end the dispute. But beyond that, the association is using your dues to cover up their misdeeds and you are not allowed to know about it or any of the details. The money you paid them to fix the roof is now buying your neighbor’s silence.
Bill Davis and John Cowherd join us On the Commons this week. They are both attorneys who represent homeowners against in litigation against their HOAs. Bill, from Texas, has been on the receiving end of the HOA litigation so understands what to os like to be in the crosshairs of an out of control board. John, a Northern Virginia attorney, switched his practice where he worked in real estate law to representing homeowners. John also has a blog called Words of Conveyance . His latest post is on point for this week’s show topic. We talk about gag orders, why they are used and whether they should be used.