Comparing Homeowners’ Associations to Local Government: In Conclusion

by Deborah Goonan

This concludes the blog series  – Are Homeowner and Condo Associations “Mini-Governments?” – comparing the typical governance structure of HOAs (using the term generically) to our local governments, as guided by the principles of our Constitutional Republic.

IN CONCLUSION, Homeowners’ Associations are generally non-profit corporations that have been granted special rights and powers by state law, for the purposes of enforcing CC&Rs and collecting assessments for shared expenses. HOA rights and powers, which are typically reserved only for officially chartered governments, include rule-making, enforcing CC&Rs and rules with fines or other penalties, the right to place a lien on your home, and the right to foreclose to collect on unpaid debts owed to the HOA, among others.

Local government officials tend to regard HOAs as mini-governments, although some attorneys and trade association leaders insist that HOAs are merely businesses, despite all of their special privileges.

1. HOAs are not government “of, by and for the people,” but rather government of, by, and for Developers, later handed down to future owners who voluntarily serve on the Board.
2. Voting in HOAs is based upon the corporate model – the more property you own the more votes you are entitled to cast. With the exception of some cooperatives (less than 3% of HOAs), there is no such thing as “one person, one vote,” despite the federal Voting Rights Act in the US Constitution.
3. HOA powers rest with the Board, and are not divided in any way to provide adequate due process (fair settlement of disputes) or any of the other “checks and balances” that exist in American government. The only power held by HOA members is the right to elect a new Board, often based upon unequal distribution voting rights .
4. HOA rules are almost always more restrictive than local government laws, and those deed restrictions and Board-enacted rules are not subject to any state review or oversight. There are few limitations upon the content of rules that can be created and enforced. Challenging or repealing HOA restrictions is often exceedingly difficult and cost prohibitive, involving a lengthy civil lawsuit.
5. Both landlords and tenants lose several key rights and consumer protections, with the HOA sometimes permitted to interfere with the terms of the lease.

This instructional series illustrates that, in many ways, HOAs are governments of a sort, but they govern in many ways that are absolutely inconsistent with American Constitutional principles.