The (KC)Stars are aligning for HOA consumer advocates

By Deborah Goonan, Independent American Communities

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After decades of swimming against the tide, housing consumer advocates across the U.S. are finally beginning to make some serious waves.

Finally, an online and print media giant, McClatchy publishing, is willing to expose dysfunction in a large segment of the real estate market.

You might remember that the Miami Herald recently did a special report on voting fraud and corruption in South Florida condo associations. If you missed it, check out some previous blogs here and here.

But yesterday, another McClatchy reporter, Judy Thomas of the Kansas City Star, launched an online Homeonwers’ Association series entitle HOAs from Hell with more than a dozen articles and several video shorts, highlighting many key issues across the country – not only in Florida or Kansas. This HOA series is a “must read” for homeowners and home buyers alike.

The articles highlight the darker side of HOA living: enforcement of petty rules, harassment of owners with steep fines and lawsuits, and even foreclosure of homes for a few hundred or a few thousand dollars. Judy Thomas writes about – and documents in photos and videos – Associations that are clearly not well-maintained, and definitely not care-free.

Other HOAs are simply petty: fighting costly legal battles over a few pansies, Mickey Mouse ears, and a backyard swingset.

But some conflicts are far more serious: like the HOA developer turned manager that thinks a child’s safety is less important  than making sure all homeowners use the same kind of window coverings, or the new condo board President that decided to reverse the previous board’s decision to allow a medically disabled resident to keep a small dog.

Some HOA and condo residents have endured such severe emotional stress over vicious legal battles that they have resorted to suicide or acts of violence.

As housing consumer advocates have been saying for decades: the legal system fails to protect consumer rights, and HOAs have virtually no accountability. Finally, investigative news outlets are delving into HOA issues instead of glossing over the problems.

Judy Thomas also highlights efforts to reform the HOA industry, as well as two examples of homes associations that have been turned around with competent and transparent leadership.

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HOA industry reaction

Community Association Network (CAN) is an HOA industry affiliate that operates a comperehensive news website containing over 9,000 articles. (CommunityAssociations.net) Although the usual format is to simply link to each individual article without comment, Joe West, site administrator, included the following introductory comment about the HOAs from Hell Series on KCStar: 

Kansas City Star reporter Judy Thomas decided she doesn’t like HOA’s and wrote a series of stories to support it. Sort of like watching Fox News talk about the President.

Was that meant to be an insult?

Oh, well, this is a typical HOA industry response, and not unexpected. On many occasions, I’ve observed that HOA industry leaders would rather dismiss the truth than accept responsbility for creating and perpetuating problems.

A new era?

When I first became interested in HOA issues about 5 years ago, there was virtually no media coverage of the pettiness, chaos, and financial risk involved in owning and residing in a home that is definitely not your castle. Oh, there was an occasional report of an HOA denying an owner the right to display the American flag or a political campaign sign. First amendment issues tend to grab the journalist’s attention. And there were some stories about petty HOA rules.

But virtually all of the media coverage – print, television, and internet – was driven by the industry: home builders, Realtors, and, most of all trade group Community Associations Institute. Their goal: promote the sale of common interest, Association-Governed Housing.

For several decades, Community Associations Institute (CAI) has served as Cheerleader in Chief for industry stakeholders. Working with media contacts nationwide, CAI regularly submits glowing promotional news releases of “award winning” planned communities and “affordable” condominiums, as well as dozens of syndicated Ask the Attorney columns.

Developers paint a picture of maintenance-free, carefree condominium urban lifestyles. They brag about the many benefits of amenity-rich lifestyles in master planned communities, their brand new homes with pristine lawns mere steps away from a sparkling community pool, brand new tennis courts, and the lush fairways of a golf course.

During the real estate frenzy of the early 2000s, buyers were enticed to “live the dream” and purchase their first home or a vacation getaway. Homebuilders and Realtors boasted about low maintenance, lock-and-leave homes.

As it turned out, most of those homes were overpriced liabilities – ones that buyers really couldn’t afford. Nevertheless, Americans were sold on on the claim that buying a home would be a good investment, and CAI has repeatedly promoted that an HOA protects the value of that investment.

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The turning tide

But when the party ended circa 2008, the vast majority of homeowners watched their property values plummet, while their borrowing costs and HOA fees increased. That created a great deal of strain on household budgets.

The rest is history, and, in some ways, the economy has never fully recovered.

As more homeowners and residents – literally trapped in dysfunctional Homeowners and Condo Associations – began to complain about living conditions in their communities, CAI swooped in to dismiss their problems as “isolated incidents.”

Homeowners were chastised for being apathetic. Owners who demanded to know how their money was being spent, who wanted more transparency and communication from their HOA Board and Manager, who suspected self-dealing or foul play, were summarily dismissed. They were characterized as “disgruntled” residents, told that their Board members were volunteers doing a “thankless” job, and that all that was needed to cure the ailing community was professional management.

But the HOA horrors and condo chaos just kept coming, along with shocking reports of professional managers and attorneys engaged in fraud, theft, and embezzlement. At the same time, millions of owners discovered hidden defects in their homes, condo units, and the common areas. Amenities that had been promised in the sales pitch never materialized. Many developers declared bankruptcy. After a decade of financial distress, poorly constructed and aging Association Governed residential communities are literally falling apart as infrastructure begins to crumble and fail.

As local news organizations and bloggers began to report the problems, it created vast online libraries of thousands of documented, real life accounts of trouble in HOA paradise. The challenges and problems can no longer be downplayed or ignored.

Dysfunctional Association Governance is at the heart of today’s housing crisis, and a significant contributor to economic insecurity and social instability.

It’s time for accountability in the Association Governed Housing industry. And it’s time to build financially stable residential neighborhoods that respect individual rights, while nurturing a true sense of community.

Kudos to Judy Thomas and Kansas City Star for straightforward and honest coverage of HOA issues.

You can read HOAs from Hell here:

http://projects.kansascity.com/2016/hoa/

 

 


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