Do homeowners get the HOA board they deserve?

By Deborah Goonan, Independent American Communities

Thomas Jefferson. (n.d.). AZQuotes.com. Retrieved September 30, 2016, from AZQuotes.com Web site: http://www.azquotes.com/quote/1136694

 

You’ve probably heard this before: in an HOA, homeowners get the board they deserve. It’s often uttered by HOA industry spokespersons, along with the tired lament about how apathy is destroying Association Governed Housing.

If only homeowners would care. If only they’d give a damn, get involved, and vote in elections. Then everything would be rainbows and unicorns.

But because so many homeowners aren’t willing to volunteer or even pay attention to what’s going on in their Association, or because they just blindly hand over proxies or vote for the same old people on the board, when they end up with weak or abusive leadership, they only have themselves to blame.

But are we to believe that homeowners are to blame for poor leadership? Why don’t we hold accountable the board members themselves? And what about accountability of the paid professionals that are supposed to be guiding them – Community Association Managers and Attorneys?

 

Let’s have a reality check!

Here’s why homeowners should not be blamed and shamed if they find themselves burdened by a difficult or irresponsible HOA board.

 

There’s a critical shortage of willing and able leaders to serve on the board.

I seriously doubt there will ever be enough HOA owners willing to serve on their board of directors – especially without compensation. Here’s why.

It’s really a matter of common sense. Consider that there are 340,000 associations nationwide. That’s almost four times the number of local governments in the entire U.S.

Just take a look at these figures from the 2007 US Census: there were about 89,000 local governments at that time, including school districts and other special districts.

http://www.census.gov/govs/cog/GovOrgTab03ss.html

In smaller local governments it is common for incumbents to run unopposed in elections. (In fact, that is the case for several local elections in my own voting district.)

In the U.S., we cannot find enough qualified and willing leaders to serve in paid positions for local governments. How will we ever find enough homeowners willing to volunteer for 340,000+ Association boards – another layer of governance, typically a privatized, corporate non-profit entity. There just aren’t that many leaders in the entire U.S. Population.

 

The entire premise of an HOA is that someone else will take care of your needs and solve your problems for you.

 

And when you consider the specific demographic makeup of your Association-Governed Housing community, it often presents additional challenges. For example, small Associations of 40 or fewer homes might not have a single qualified person with time to volunteer.

Commonly, in resort or 55+ communities, all but a handful of homeowners happen to be part-time residents. Many cope with health limitations, or may be caring for a spouse or family member.

In an affordable housing condominium, most, if not all, of the residents may be working long hours or two jobs while caring for children. Low income homeowners and residents tend to have limited education, not even a high school diploma, yet as a board member would be responsible for managing 5- or 6-figure budgets.

In upscale associations, busy professionals often need to travel frequently, or work on-call or irregular hours. Their time is valuable and they have very little left to devote to volunteer service with their HOA.

And, of course, quite a few Association Governed Housing communities have a high percentage of tenant residents who are not eligible to serve on the board.

All of these factors lead to a very limited choice of candidates for HOA boards. Quite often, there are not enough candidates to fill open positions, and so no election takes place.

And this shouldn’t be surprising, because…

 

Housing consumers buy into HOAs, condos, and co-ops because they have been sold on a low-maintenance, carefree lifestyle, geared toward convenience.

How many of you reading this article were told that you’d have to watch your HOA board like a hawk, and become actively involved in its self-governance?

And if you had been told you would have to proactively monitor your HOA to keep the board in line, would you have thought twice about buying in?

Let’s face it. The entire premise of an HOA is that someone else will take care of your needs and solve your problems for you.

By comparison, we don’t expect to have to closely monitor our local governments. We rely on built-in governance checks and balances to prevent and expose most misconduct. Our media serves as the citizens’ watchdog, as well as political non-profit and activist groups concerned about specific issues.

No one blames municipal citizens for the incompetence, unethical, or illegal conduct of their elected officials. After all, they were democratically elected in good faith.

In HOAs, it is rarely possible to have a good faith election, yet the industry wants to blame Association members for “electing” one or more bad board members?

 

Apathy is cultivated, not chosen.

 

No one “deserves” to be treated with disrespect or total disregard for their rights.

Homeowners are absolutely entitled to transparency because they pay for HOA services with their own, hard-earned money.

But one of the most common complaints of HOA homeowners is a lack of transparency, where participation in meetings is discouraged. Many HOA board members believe that when no one shows up for their meetings, that’s a good thing. It’s certainly easier than having to answer questions or address concerns of homeowners.

Another common complaint is that the HOA fails to post minutes of board meetings, and/or ignores requests to see financial records. A variation on that gripe is that their management company charges high fees to provide access to records. How can a homeowner be actively involved and educated on important Association issues without free and open access to the official records of the Association?

In short, in HOAs, apathy is cultivated, not chosen.

 

Association Governance discourages meaningful homeowner involvement.

The basic structure of most HOAs actually discourages individual participation. It vests a great deal of power in the HOA Board, and encourages – practically demands – blind obedience and dependence on that governing Board.

Recall of a Board member is exceedingly difficult. Electing a new Board is, at best, a divisive, contentious, 2 to 3 year process.

Indeed, sometimes it is mathematically impossible for homeowners to “get involved” or to replace the HOA board, because…

 

A developer or group of investors might control the association.

If that’s the case, the developer is appointing board members, or at least the majority of board members. And during active construction, when there are still vacant parcels and units, the developer retains weighted voting rights and other special privileges that allow him or her to control the association’s operating and reserve budget, amend the governing documents, and change the development plan without consent of homeowners.

Even if a developer is no longer in control, there could be a voting bloc of real estate investors that owns the majority of units, thereby controlling a majority of the voting interests and ensuring their seats on the HOA board. Associations with low owner-occupancy rates are particularly vulnerable to hostile takeover of the housing corporation by speculative investors.

Undemocratic takeovers are made possible because an HOA is not a legitimate government. It is a private organization, usually incorporated, where voting rights are assigned to property, not people.

Therefore, the old Thomas Jefferson adage, “the government you elect is the government you deserve” – and its adaptation “you get the HOA board you deserve” – do no apply to homeowners and condominium associations.

The HOA-industry uses this rhetoric to deflect accountability from ineffective, unethical paid and volunteer leaders onto unsuspecting housing consumers.