The trouble with HOAs – 5 risks for homeowners

It’s not just about the rules

By Deborah Goonan, Independent American Communities

Most HOA discussions focus on rules. Are the rules reasonable? How are they enforced? Does the HOA board abuse its power?

However, HOA problems are not limited to disputes about rules and restrictions.

HOA Problems are often tied directly to shared ownership of infrastructure and amenities or the developer’s role in construction and management of the community.

Today’s post provides five examples of financial, health, and safety risks for owners of homes in association-governed common interest communities.

1. One Arkansas Property Owners Association manages a private water supply. Recent water quality tests show high levels of disinfection by-products, a know carcinogen when consumed over many years. Homeowners worry about the safety of their drinking water, but the HOA is dismissing their concerns, and insisting the water is safe.

The POA is promising to take the next round of water samples from a different place along the supply line, as if that’s going to help correct chemical balance of the water supply. At best, this approach might fudge the test results so the POA can say the water utility is in compliance.

2. In Las Vegas, a run down, moldy, pest infested condominium gains notoriety in local news as the ‘worst ever.’ IAC sees countless examples of once decent and affordable condo communities gone bad. Generally, a condo association takes a turn for the worse when the condo board doesn’t collect enough money to make repairs. Poor, possibly corrupt management is the norm when a few investors own most of the condos. Before long, the units become uninhabitable for owners and tenants alike, and squatters move into vacant units. Crime and blight follow.

3. In a South Florida community, the HOA is suing its developer, D.R. Horton, for failure to pay its share of HOA dues and utility bills. The HOA lawsuit also alleges the developer-managed HOA opted not to enforce collection of unpaid assessments, to avoid depressing home values with HOA foreclosure sales. The HOA says their clubhouse has water intrusion construction defects, and that trees planted by the developer are now destroying the community’s sidewalks. The lawsuit claims the HOA is $1.8 million in debt following D.R. Horton’s turnover of control to homeowners.

4. In a small community in Alaska, several townhouses were severely damaged following an earthquake. Unfortunately, the condo association didn’t have earthquake insurance, because it wasn’t required by law. Homeowners cannot live in or rebuild their damaged homes unless and until the condo association stabilizes the steep slope behind their homes.

An attorney for the association says owners of all 40 condos will end up splitting the cost of making the homes safe again.

5. And in Texas, a developer of a community centered around a lagoon breaks several promises made to home buyers. First the HOA lagoon is now open to the public, even though sales agents told buyers that it would be for the exclusive use of members. Second, HOA assessments are rising by $300 per year, to cover the cost of maintaining the massive lagoon. And the developer also started charging homeowners a fee for home security services, with a 10-year contract commitment to the HOA.

Talk about bait and switch.




Bella Vista Residents Receive Water Violation Notice, POA Says Water is Still ‘OK’ to Drink

By: Kelly O’Neill
Posted: Dec 04, 2018 06:08 PM CST

Updated: Dec 04, 2018 10:04 PM CST

BELLA VISTA, Ark. (KNWA) — A notice sent to people living in Bella Vista regarding a water violation has left many concerned, but the city says there is no immediate health risk from drinking the water right now.

The Bella Vista POA water utility sent out a notice to people living in the area that a violation occurred after water samples tested above average for a disinfection by-product, trihalomethanes, for the second time.

These samples were tested from July through September near the town center.

The Bella Vista POA Water Utility is relocating the sample site to an area that better represents the water quality in the system.

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‘Worst living conditions ever’: Local condominiums under investigation for code violations

by Gabby Hart
Monday, December 10th 2018

LAS VEGAS (KSNV) — Joshua Stark, Las Vegas Metropolitan Police sergeant, says he responded in October to Desert Garden Condominiums on Bonanza Road twice in a 24-hour period for a shooting and a murder.

Stark says that’s when he discovered what he describes as the worst living conditions he’s ever seen.

“Glass all over the ground,” he said. “There’s no more grass, there’s no more plant life, and everything’s dead. Multiple buildings are boarded up, and windows are broken all over the place. There’s glass everywhere. Kids are out there playing in glass and animal feces, broken walls. I can go on.”

Tammy Gilliland has lived in the complex for three years and says the problems don’t stop at the broken glass and boarded up windows.

“It’s not safe, it’s not clean. It’s disgusting. There’s mold, there are bugs, there are roaches, ants. There are even bed bugs. There are bed bugs!” Gilliland explained.

Read more (video):




D.R. Horton Left Defects, Cash-Strapped Miami-Dade Association, Lawsuit Says
The Mandarin Lakes community claims it is more than $1.8 million in debt because of D.R. Horton failures on assessment collections and utility arrears.

By Lidia Dinkova | December 07, 2018 at 03:40 PM

Home construction giant D.R. Horton Inc. is accused in a lawsuit of failing to pay its association dues, enforce collections and report the deficit to residents of one of its Miami-Dade County communities.

The complaint alleged the homebuilder wanted to avoid liens and foreclosures that would reduce prices and hurt company profits.

The Arlington, Texas-based company built Mandarin Lakes with 875 single-family homes and townhouses along Southwest 140th Avenue between Florida’s Turnpike and U.S. Highway 1 near Homestead.

D.R. Horton managed the community by appointing employees to the homeowner association board from 2004 to 2014, according to the Nov. 30 complaint filed in Miami-Dade Circuit Court.

The developer retained control because it hadn’t sold 90 percent of homes, said attorney John Arrastia, who filed the case against D.R. Horton. He is a partner at Genovese Joblove & Battista in Miami.

Read more (legal complaint attached):




Homeowner Association didn’t have quake insurance, residents of condemned Eagle River condos say

By Sean Maguire | Posted: Mon 2:51 PM, Dec 10, 2018

ANCHORAGE (KTUU) – An Eagle River homeowner association was not carrying earthquake insurance when the 7.0 magnitude temblor struck on Nov 30., despite that insurance being a requirement of the homeowners’ agreement, residents say. The damage caused by the earthquake will potentially cost tens of thousands of dollars for each of the 42 condominium owners.

River’s Edge Condos sits right on the northern bank of Eagle River. At least eight of the units that back onto a hill on the northern side of the property have been red-tagged as “unsafe to occupy” by the Municipality of Anchorage.

Another four condos on the northern side of the property have been yellow-tagged as “restricted to use.” As of Dec.9, the remaining condos have not been inspected yet by MOA.

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See also:

Eagle River condo residents may pay for neighbors’ quake damages (KTVA)




Lagoon blues: Homeowners say promise of paradise broken

Nancy Sarnoff Dec. 14, 2018 Updated: Dec. 16, 2018 4:52 p.m.

Hayley Arceneaux and her husband discovered a rare turquoise lagoon lined with white sand and palm trees in a suburb just 20 miles from downtown Houston.

They believed it would be a private refuge for their young family of five, shared only with other residents of a new development called Balmoral off the North Sam Houston Parkway at Woodland Hills Drive. But now the developer is selling annual passes to people who don’t live in the development.

“We were promised exclusiveness of the lagoon,” said Arceneaux, who is scheduled to close on her new home in Balmoral in February. “We almost want to back out, but we will lose $12,000 if we do.”

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