As HOAs become more common, so do the conflicts between homeowners and their HOA Boards. A Common Interest Community bill that recently passed the Assembly in New Jersey would task the Department of Community Affairs (DCA) with regulation of elections, recalls, and homeowner access to HOA financial documents, among other things.
As many owners and former owners of homes in Association-Governed Residential Communities know from personal experience, it can be very difficult to remove and replace rogue Board members, and quite often defensive Boards simply refuse to operate transparently.
Who could be against some common-sense measures aimed at reining in near-absolute control of runaway HOA Boards?
Answer: One Republican Senator by the name of Christopher Connors. In the Shorebeat article linked below, Connors is quoted with regard to his opposition to DCA regulation of NJ HOAs:
“This single provision [DCA regulation of HOAs] is very alarming in that it would most certainly lead to the state interfering in the operations of homeowners associations,” Connors said. “How would the state know how better to run a community then(sic) its residents?”
Time for a little injection of common sense.
Keep in mind, prior to enactment Civil Rights legislation in the 1960s, there were certain elected officials who thought the Voting Rights Act was “interfering” with states’ rights to limit who could and could not vote at their local polling places. Interference is not always a bad thing! The reason our country was established with multiple levels of representative governance at local, state, and federal levels was to ensure checks and balances. No one level of government should assume unchecked control, including local private governments through their homeowners’ associations.
Connors statement implies that in an HOA, residents have a great deal of control over how their community is managed and governed. That’s simply not the case. Nearly all power is vested in the HOA Board – a Board which may be Developer-controlled for many years, before it is turned over to volunteer homeowners. And those homeowner volunteers, even if they are well-meaning, usually know nothing about how to “run a community.” By comparison, cities and states are usually staffed by paid, fully trained public administrators that do, in fact, better understand how to run a community. But election of city and state government officials is conducted by a closely monitored, democratic process. The typical HOA election is conducted by proxy, loosely governed by corporate law, with very little, if any, monitoring of proper procedures to ensure a valid or fair election. The proposed bill would require a standardized, monitored, secret ballot election process. That would certainly be an improvement for most HOAs.
Who really runs the show?
In addition, Connors deliberately clouds the issue at hand. The pending NJ bill would provide limited oversight of HOAs, particularly with regard to Board elections and recalls, and financial transparency. The DCA would not “run the community,” but merely seeks to assist Association members in keeping their Board in check. The currently proposed law would override contrary and less restrictive By Laws.
Sadly, every state that attempts to rein in the power of HOAs is faced with stiff opposition from special interest lobbies that bend the ears of sympathetic politicians. If you follow the money, you will often find a direct link back to campaign contributions, or direct and indirect affiliations of politicians with developers, real estate investment firms, or service providers to the HOA industry. Could that be the case in New Jersey? Concerned voters should look into the possibility.
Pending N.J. Bill Could Affect Brick Homeowner Associations’ Governance | Brick, NJ Shorebeat