For years the bulk of information about this relatively new experiment in housing has come from the industry that has created it and gains from it. The sales pitch generally describes the concept of condominiums, homeowner associations and cooperatives in glowing terms, promising the owners an easy life where all their problems will be taken care of for them. Housing consumers are assured they will have greater control over their immediate environment, that this is “democracy up close and personal”, it is carefree living at its best, owners will have access to amenities that are beyond the financial reach of most Americans and of course the promise of protected and enhanced property values. We’ve all heard these promises and all know that nothing can be further from the truth.
But finally the tables are starting to turn. Academics, attorneys, psychologists, advocates and medical professionals are speaking out. And finally the truth about the effects of HOAs is being uncovered.
We’ll talk to Mike and Shelly about their case study, a crisis in a condo association on the gulf coast. In this case the condo owners were faced with massive renovations. The condo owners were facing having to get a loan in excess of 10 million dollars to make the repairs. Naturally the owners would be required to repay the loan. We’ll learn how the association communicated the problem to the owners and how the owners reacted. While we have seen many similar cases, they have all focused on the structural issues, and often when discussed by the HOA industry the blame has been put squarely on the shoulders of the owners. What is refreshingly enlightening about this paper is that the authors study the situation more from an interpersonal and normal communication perspective. Really happy to note that this dynamic trio are busy working on their next paper. It is high time to get the real story out.
Have you noticed how sometimes the best of intentions can have disastrous consequences? A perfect example is trying to provide affordable housing to the masses, give local municipalities free tax dollars while double taxing the homeowners (who think they just bought something affordable) to pay for essential services. T o achieve all that, we commingle private property and common property and the cherry on the top of this scheme is putting Larry, Curly and Moe in charge. If that is not a recipe for disaster, I don’t know what is. We have tried to make this work for decades but have failed miserably. The real tragedy is that we not only refuse to learn from our mistakes but we keep building on them without improving them.
Tyler Berding joins us On The Commons. Tyler is a founding partner of Berding and Weil, a California law firm that represents Condominiums and Homeowner Associations. He has been following all things related to Common Interest developments for the past several decades and speaks on the topic in various forums, including Community Associations Institute, (CAI) and the California based Executive Council of Homeowners, (ECHO). He also participates in writing legislation designed to regulate both commercial and residential CIDs. Tyler has long been writing about the failures of the business model, primarily of condominiums. To prove his point, Pinnacle Condominium Association in San Rafael, California has just approved a $145,000 special assessment for each of the 36 owners in order to make the much needed repairs to the common elements. We talk about the obvious problems with the business model and the problems that can and do rear their ugly heads. We also talk about our penchant for providing affordable housing to everyone. The question really is, just how affordable is “affordable housing”? Is housing built out of cardboard and scotch tape affordable in the long run? Can well built housing that will still be standing in 20 years or longer, be affordable? Or is to time to pull the plug on the “American Dream” of homeownership?
Oh, it’s a brave new world when homeowner associations and condos are allowed, by law, to assess fines for alleged rules infractions and covenant violations. They are also permitted to add junk fees, file a lien and then foreclose to collect those charges which often include hefty attorney fees. In many states associations have been granted priority over mortgages and other liens. What exactly does that mean? And how do associations find all these minor problems? The stories of covenant enforcement highlight the sheer pettiness and nastiness that seems to be quite rampant in association governed neighborhoods.
Bill Davis joins us On The Commons. Bill is an attorney in Texas who knows firsthand what it is like to be targeted by a homeowner association. He regularly represents other homeowners, often in the battle of their lives against their HOAs. We talk to Bill about super priority liens, find out what they are and what they do. We also talk about something that is on the horizon that would allow associations to watch an owner’s every move and inspect every nook and cranny on private property.We are, of course, talking about drones. As I mentioned, it is a brave new world. Private property? A home? What will American homes and property rights look like in the future.
Now that mass produced homeowner associations have become the norm rather than an anomaly, we tend to just shrug our shoulders and accept them as a necessary evil. But why do we have them in the first place? And why, as time goes on, do we lose more rights in our own homes than we had even a decade ago? Why do HOAs come with a Declaration of Covenants, Conditions and Restrictions? Why not a Bill of Rights instead? Or better yet, why not go back to the free form of ownership where the owner is the “king (or queen) of the castle? Proponents of HOAs gasp and claim we’d end up with utter chaos. But by stripping away basic, fundamental rights are we even thinking of how this increasingly restrictive form of ownership will affect future generations? Or are we only concerned about increasing the tax coffers of local municipalities and feeding the insatiable HOA industry beast?
Chuck Welsh joins us On The Commons. Chuck is a former developer with a lot of experience on the formation of associations. He has some insights on what goes into turning several acres of raw land into a development where people will live and raise families. We’ll talk to Chuck and try to get into a developer’s mind to understand what he sees when he looks at several acres of nothing but dirt, stones, trees and shrubs. What is he thinking and what is he hoping to build? Chuck was not involved with some of the more massive developments that are larger than some cities but more with the smaller ones. The ones on a more human scale. But why inflict a homeowners association on future owners? Chuck believes that the clean water act of the late 70’s gave birth to retention ponds seen all over the place and their maintenance is ultimately responsible for HOA mandates across the country. We also talk about property values and the future of homeownership.
Shouldn’t we be trying to simplify life? With all the technological and scientific advances that have been made recently, we have the resources and the ability to really free up our time, allowing us to devote ourselves to our families and friends and on the things that make us happy. Instead, we are being bogged down in layers and layers of red tape. If we did get rid of the things that really make no sense, would the abuses simply vanish and would we, in effect, create a kinder, friendlier environment?
Barbara Stage joins us On The Commons. Barbara is an attorney in central Florida, where she represents homeowners as well as homeowners associations (HOAs). The slogan on her website reads; “Protecting the rights of homeowners across the state of Florida”. Barbara recently wrote a letter to the Florida Legislature advocating for greater oversight of HOAs and also for less costly alternatives to preserving one’s rights against their association. We talk to Barbara about some of the atrocities she has witnessed over the years in Florida HOAs. We find out what kind of advice industry attorneys give their HOA clients and we talk about HOAs refusing to cash checks from homeowners and sending legal notices to wrong addresses. And that’s just for starters, there is so much more. I ask myself again, what on earth are we thinking?
“If it hurts, it must be good for you”. Remember that one? Fortunately we got smart and realized that if it hurt it really was not good for us. Along the same lines of thinking is the other oft repeated canard which is that homeowner associations protect property values. “If your HOA makes you miserable and physically ill, is abusive, is grossly mismanaged, is secretive, etc. etc. etc., it is OK because it protects your property values.” This makes about as much sense as “if it hurts, it’s good for you.” Despite the fact that protected property values claim is totally unsubstantiated, we hear it over and over again.
Maybe it is time to get smart and to stop being so gullible. Next time you are told HOAs protect property values, insist on tangible proof. Preventing a neighbor from painting their front door red is not acceptable and it really doesn’t prove anything.
Joining us On The Commons this week is Jill Schweitzer. Jill is a Real Estate Broker in Scottsdale, Arizona where there are a lot of mandatory membership HOAs and condominiums. She is concerned about all the problems in these kontrolled properties and has taken it upon herself to try to understand what is going on. She actually put pen to paper and did the math. She tracked and analyzed property values in 10 condo projects in Scottsdale over a period of 10 years. Her findings are on her website hoasavers.com. It might come as no surprise that contrary to protecting property values, HOAs can actually devalue property. Tune in, we’ll talk to Jill about a myriad of problems that seem to be part and parcel of HOAs, find out why she decided to look into HOAs and what she is planning on doing to protect her clients’ property.