Will AARP help rein in HOA abuse?

By Deborah Goonan, Independent American Communities

Several readers have circulated the latest AARP article on HOAs, which highlights the problem of older Americans who lose their homes to HOA foreclosure for unpaid assessment debts.

While most HOAs have the legal right to place a lien on a home for nonpayment of assessments, the draconian HOA foreclosure process can rob a homeowner of all the equity in the house. Sometimes, the homeowner is still on the hook for making mortgage payments, even after they no longer own the property.

The majority of homeowners, faced with the threat of losing their home, will fork over thousands of dollars over and above the unpaid HOA debt. But, as noted in the AARP article, HOA collection firms charge exorbitant fees that often exceed the amount of the debt owed to the HOA.

Either way, housing consumers lose.

HOAs Get Tough on Delinquent Residents

Older community association members who fall behind on fees face increasingly harsh treatment

by Joe Eaton, AARP, January 8, 2019

Leah Lally, a 51-year-old homeowner in Tampa, Fla., learned the hard way that dealing with a homeowners association (HOA) can escalate into a costly and years-long legal battle.

In 2015, Lally got nearly $700 behind on the $135-a-month association fees on her five-bedroom home. She explained to the association’s management that she faced financial hardship while caring for her sick parents and asked to work out a payment plan. The management company that contracts with her homeowners association told her it would take the issue to the association board.

But two months later, as Lally waited for a response, she got a letter from a law firm saying that a lien had been filed on her home.

Lally decided to fight. More than three years later, Lally’s HOA claims she owes nearly $15,000 — about $10,000 of that from attorney fees, interest and other charges.

“I refuse to bend because it’s not right,” says Lally, whose court case is ongoing. “It’s cruel that they are aiming to put me out of my home.”

Read more:


AARP missed some points

Some critical issues are not addressed by the AARP.

Most homeowners can agree that every member of the HOA is obligated to pay his or her fair share of fees. But foreclosing a lien, and selling a home at a foreclosure auction for a very small fraction of its value is a case of the punishment not fitting the crime.

The same can be said of burdening the homeowner with collection costs and attorney fees that are 2, 3, or even 10 times the amount of the unpaid HOA assessment debt.

Except in cases where the HOA can prove, in a court of law, that the home is abandoned, the HOA should be satisfied to place a lien on the home, and collect the debt when the home is sold or foreclosed by a lender or at a tax sale.

The HOA industry and AARP might work to convince states to enact laws that allow HOAs to collect the full amount of their assessment liens, with reasonable caps on collection costs, at the time of sale. The goal should be to fully reimburse the HOA, not line the pockets of collection attorneys and bottom feeding real estate investors.

And let’s not gloss over the fact that not all debts claimed by the HOA are valid, especially if the has HOA imposed disputed fines or late fees.

Is AARP finally on the side of homeowners?

Typical of most HOA articles, the writer consults with industry trade group, Community Associations Institute (CAI), specifically VP Dawn Bauman. Bauman’s response is predictable: HOA foreclosures are “rare” occurrences.

Still, some IAC readers are somewhat encouraged by the fact that finally, AARP is talking to attorneys who represent homeowners caught in the HOA fee collection trap.

Among those attorneys are Michael Greenwald, Boca Raton, FL; Brian Boger, Columbia, SC; Lone Star Legal Aid in Houston; and Jonathan Dessaules of Phoenix. All of these legal experts point out the growing trend of HOA attorney collection firms that charge outrageous collection fees to homeowners, often dwarfing the original debt owed to the HOA.

But some knowledgeable advocates remain skeptical about AARP’s commitment to justice and fair treatment of older Americans.

An Arizona advocate for Constitutional Government, George Staropoli, posted his response in AARP addresses HOA abuse after 13 years of silence

Understand that in 2006 AARP produced a public paper, the homeowners’ bill of rights document, co-authored by Texas attorney and homeowner advocate, David Kahne.

It died! How come you ask? Perhaps it has to do with CAI’s Manifesto in which CAI stated its position,

These papers also contain CAI attempts to influence other dominant organizations like AARP and NAR (National Assoc. of Realtors). Furthermore, CAI calls for not only influencing legislatures, but the judges, too.

And where is AARP? Why isn’t AARP protecting seniors as they proclaim, “working for you,” and “fighting for you.” But apparently it seems they have succumbed to the influence of CAI over the years.

Both AARP’s and George’s article prompted me to do some research on AARPs role — for better or for worse — when it comes to advocating for older Americans, with respect to HOA abuse and corruption.

Where has AARP been since 2006?

I’ve found a smattering of activity related to HOAs from AARP:
As referenced by Staropoli above, AARP publishe the 2006 HOA bill of rights in conjunction with Attorney David Kahne from Texas.

Unfortunately, the HOA Bill of Rights went nowhere in most state legislatures. And, in this writer’s opinion, that’s just as well. Residents of the U.S. already have a Bill of Rights and a Constitution, and those legal constraints and protections should apply equally to all Americans, no matter where they live — including HOA governed communities.

See Court Upholds California Anti-Foreclosure Protections, by Barbara Jones, Sr. Attorney, AARP Foundation Litigation

In the meantime, HOA industry trade group CAI  continues its attempt to influence AARP, by participating in a meal-assembly event for a food bank, part of CAI’s mission to leverage external influences in its favor.

Where does AARP stand on housing policy?

The following reference articles from AARP.org provides some insight.

For instance, AARP touts the virtues of increasing housing density, in mixed-use communities, located near public transit. The references to “walkable” communities are, in essence, synonymous with New Urbanism.

Here’s one AARP feature article, based upon a 2017 study of U.S. communities following the blueprint of New Urbanist, Transit-Oriented Developers. (Read about the pros and cons of these communities here on IAC on the Higher Density/Mixed Use Communities page.)

Transit-Oriented Housing Helps Older Adults Live Independent Lives
No car? No problem. AARP found more than 100 ways government support for public transit is energizing communities and enhancing lives
by Jana Lynott, Public Policy Institute

In one respect, TOD [Transit-oriented development] is a victim of its own success. The first waves of TOD construction often result in significant property value increases. The downside to the otherwise positive achievement of mobility and economic development goals is that lower-income residents can either be displaced from or kept out of these transit-rich neighborhoods that offer mobility and econominc benefits.

Source: Communities Are Embracing Development near Transit:
A Snapshot of Transit-Oriented Development Support across the United States
By Jana Lynott, AARP Public Policy Institute and Mariia Zimmerman and Patricia Happ, MZ Strategies LLC (September 2017)

MZ Strategies is firm specializing in urban planning and financing. But, I give AARP credit for acknowledging that increasing density almost always leads to decreasing affordability of housing.

Now take a look at this: Livable Communities page, AARP outlines several housing options previously addressed here on IAC:

Tiny houses
The “Missing Middle” housing (groups of small, multifamily housing)
ADUs (Accessory Dwelling Units)

Digging a bit deeper, let’s examine AARP’s Public Policy Institute, and Public Policy Book.

AARP Public Policy Book (2017-2018)

Creating Livable and Sustainable Communities

Considering all of these articles and policies, it’s clear that AARP is on board with the ULI New Urbanism crowd — only now they pitch it as “transit oriented developement (TOD).”

From AARP’s Roadmap to Livability, Part 1:

“Livability features that benefit everyone
1. COMPACTNESS helps make a community walkable, decreases automobile dependence and supports a socially vibrant public realm
2. INTEGRATION OF LAND USES enables people to live closer to or within walking distance of work, community activities and the services they need
3. HOUSING DIVERSITY helps ensure that suitable housing is available for each stage of life
4. TRANSPORTATION OPTIONS allow older adults to remain independent, mobile and engaged
in their community”

AARP is very much in favor of the LIHTC, a tax give-away to developers/real estate finance companies, and a government boondoggle fraught with corruption.

Clearly, AARP’s housing policy aligns perfectly with the sector of the HOA industry that pushes mixed-use, common interest communities, where all housing is either a condo or a rental apartment. To a lesser degree, AARP public policies support housing cooperatives, and manufactured housing on leased land.


What is AARP’s role in housing reform?

In conclusion, most of the homeownership options supported by AARP are, by default, under the rule of one or more homeowners, condominium, or cooperative associations.

That flies in the face of a strong stance against HOA abuse, and dysfunctional or corrupt common interest community governance.

That said, if AARP were so inclined, the organization could theoretically advocate for safe roads, truly affordable housing, accessibility, and opportunities for social interaction completely separate from the mandatory HOA or common ownership of property.

There’s no reason older Americans cannot have all the benefits of safe living environments and diverse housing choice, without promoting — almost exclusively — common ownership and privatization of local government.


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