By Deborah Goonan, Independent American Communities
Rebecca Lindstrom of 11 Alive (Atlanta) just completed an investigative report of HOAs, part of the station’s “Keeping the Powerful Accountable” series.
The report highlights several facts about HOA living:
- HOAs have considerable power and control of homeowners
- Assessments or “dues” must be paid in full and on time, no matter what
- State law is heavily skewed in favor of construction companies, developers, and HOAs
- Court costs and legal fees can be far out of proportion to the dollar amount of one or two late assessment payments (in the example highlighted, a homeowner dispute over $75 in late fees has resulted in the court awarding $8000 to the HOA)
HOA Horrors: Few checks and balances put residents at mercy of boards, covenants
11Alive Investigates: HOA Horrors
Rebecca Lindstrom and Adrianne Haney, WXIA 1:17 AM. EDT October 31, 2016
For many, a house represents years of hard work. It’s an investment not only in your finances, but also your dreams.
While that money may buy you the walls, it doesn’t always buy you control over what you do with them. At least not if your house is part of a homeowner’s association – or HOA.
For years, 11Alive received a steady stream of tips from viewers, frustrated by the action of their HOA board. When our 11Alive Investigator Rebecca Lindstrom started digging, she found cases of favoritism, bullying, embezzlement – and very few checks and balances to make sure decisions came coupled with common sense.
Read more, see VIDEO here:
Thank you, Rebecca Lindstrom for taking on the HOA industry, and for challenging Wendy Brant of Heritage Property Management on the subjectivity of HOA rule enforcement.
While management companies do not technically make the rules, they work in tandem with those that do: developers of new housing projects and subdivisions and, in older communities, homeowner board members. And in many cases – and Heritage is one example – the management company provides an in-house collections service, generating additional revenue for the company by collecting fines and delinquent assessments.
So is there truly an incentive for preventing rule violations or delinquent assessments, or resolving these disputes promptly and amicably?
Thank you for interviewing Julie Liberman, one of the rare attorneys that represents individual homeowners in legal disputes with their HOAs. Liberman provides expert testimony that the law is lopsided to favor HOAs, something housing consumer rights advocates have been saying for many years.
I have a few thoughts to add.
Yes, a buyer should carefully consider whether he or she can live with the restrictions of a homeowners or condo association. But, in most cases, an association is not going to allow a non-owner to attend a board meeting, or bother to talk to a prospective home buyer.
And management companies such as Heritage, Associa, First Service Residential, and many others now charge home buyers considerable fees for pre-sale disclosure packets. Is the industry truly interested in transparency and full disclosure, or are management companies more interested in raking in additional revenue to produce vital documentation to home buyers?
Where is the proof that HOAs protect proerty values? There is no evidenced based research to support that marketing claim. Ask folks like Clarence Mitchell and Allyson Smith if their HOAs have provided any value enhancement to their properties. Ask millions of Americans who are still burdened with HOA homes that have not recovered their pre-recession values, or who have lost their HOA homes and condos to foreclosure and short sale in the past decade.
Finally, what about buyer choice? When 80% of new construction nationwide mandates some kind of Association-Governed Community, our local, state, and national housing policymakers need to seriously consider: what options do buyers have? It’s high time for a cap on new construction of Association-Governed Housing, and an increase in new construction of housing that is not burdened by restrictive covenants and mandatory HOA assessments.