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.

It was all so simple in the beginning. Build new houses in a residential association, give the HOA  the authority to tax the homeowners and the responsibility of providing the services normally provided by the municipal government.  The local municipality still collects the full tax but no longer provides the services.  Is it fair?  Is it right? Probably not but it was simple.

Was it then necessary to take what was once an easy to read one or two page “contract” known as the Declaration of Covenants, Conditions and Restrictions and just keep adding more covenants, more restrictions, more conditions and empowering association boards and managers to become more intrusive and more abusive?  When the world was given a mere 10 Commandments that covered everything they needed to lead a good life, why do American homeowners need a tome of do’s and don’ts on how to live in their own homes? Haven’t we gone too far?  

David Kahne joins us On The Commons this week.  David, an attorney in Houston, Texas has represented homeowners in their legal battles with their homeowner associations.  He has been active in trying to get homeowner friendly legislation enacted in Texas.  He has presented in numerous homeowner sponsored conferences.  The most recent conference held in Houston was just a couple of weeks ago.  Participants discussed the issues and talked about possible fixes.  We’ll talk to David and learn about the conference, legislative successes from the last session and we’ll find out what is on the agenda for next year’s session.  One of the greatest benefits of meeting as a group is the benefit of brainstorming.  We will hear about some very interesting ideas and comments that came out of this conference. 

Community – that wonderful word that conjures up images of people who have interests and ideals in common, people who live in a neighborhood where they become friends and family.  It takes a while to build a community, to build trust and to get to know each other, to learn to overlook the petty and silly stuff and focus on the good things about the “community”.

But in this fast paced, modern world of ours where “community” is manufactured, an outsider is hired to ensure uniformity and compliance and tolerance, acceptance and individuality are frowned upon, the only things owners have in common appear to be the duty to pay whatever they are ordered to pay and to “obey the orders”.  In these artificial “communities”, the descriptive words that more readily come to mind are “war zones”.  When the problems are petty and ridiculous, as they often are, a more sensible approach to dealing with them may be some form of adult supervision.  

Adam Buck joins us On The Commons this week.  Adam is an attorney in Scottsdale, Arizona who has started a new company called Homeowner Legal Services.  Adam says he has represented both homeowners and associations in disputes that have gone to court.  His new company is a membership based dispute resolution venue.  The association signs on and agrees in the event of a conflict, to mandatory, binding arbitration.  This membership extends to the members.  Everyone agrees to appear before a retired judge and abide by his or her decision.  We talk to Adam about the details of how this would work.  We also discuss time lines.  For some of the pettier and sillier “disputes” where “common sense” might suffice for a reasonable resolution, this may well be one answer.  

The views and opinions expressed in this interview are those of the guests and do not necessarily reflect the official policy or position of On The Commons.

Opinion:  It is my belief that much of what goes on in associations is petty and stupid.  However, there are some very serious problems in associations that need to go beyond “common sense” solutions and set legal precedent for how to protect the rights and property of the owners.  In these instances binding arbitration should never be used.  Shu.