About Independent American Communities (IAC)

The purpose of this blog is to inform and educate readers about the economic and political realities of living in Common Interest Developments (CIDs), particularly Association Governed Housing communities (Mandatory Homeowners’, Condominium, Cooperative, or Property Owners’ Associations) as well as Master Planned Communities established as taxable Special Districts.
Articles cover current events, legislative and political news analysis, and consumer protection perspectives for home buyers, homeowners, tenants, and other interested parties.

CID issues go far beyond the sometimes crazy covenants, restrictions, and rules. At issue is how we govern and manage our communities, and the value we place on individual rights.


The core conflict in HOAs

At the core of conflict in many shared ownership communities is the fact that members of the common interest corporation come often hold opposing goals and values.

An owner occupant’s perpsective is that a home should be a place to live, not a speculative real estate commodity, and that a community should be a place for people to nurture, grow, and thrive, not primarily a profit center for real estate industry stakeholders.

The owner of a second home as a vacation property, or as a real estate investment with rental income, tends to be more concerned about good fiscal management and consistently good proeprty maintenance of the association. Their primary concern is the bottom line, maintaining a postitive cash flow from rental properties, and ensuring that their equity position and sale prices increase over time.

Institutional investors, real estate brokers, and developers, on the other hand, seek to obtain or retain majotiry control over the corporate association, for the purposes of protecting their financial investments. Unfortunately, their interests often clash with the interests of non-affiliated homeowners.

This blog documents harm to housing consumers and taxpayers, based upon two erroneous but widely believed concepts: that CIDs and HOAs protect property values and that this housing model somehow saves local governments money.

Disclaimer: Opinion, analysis, and information provided on Independent American Communities is NOT intended to be legal advice. This site is not intended to provide specific advice related to personal issues with your HOA. Please consult a qualified professional, such as an attorney, if you are having a problem with your HOA.

Please know that I am NOT an attorney, and that no information provided on the site or in communications with readers is to be construed as legal advice.

As a member of the independent media, my mission is to educate housing consumers and bring broad public awareness to the serious issues surrounding Common Interest Development and Association Governance of housing communities.

About Homeowners’ Associations (HOAs)

Nearly one in five Americans resides in Association Governed Housing, over 67 million people. Over the past 5 decades, local governments have created land use policies that strongly favor or require establishment of these Association-Governed Residential, Common Interest Developments (CIDs). As a result, most new development is burdened by a set of covenants, conditions and restrictions (CC&Rs). Common ownership also exposes consumers, especially homeowners, to numerous financial risks.

The governance model of HOAs is almost always corporate, resulting in a privatized form of local governance directly affecting individual property rights, Civil Rights, and civil liberties of its owners and residents.

Generically known as HOAs, planned or private communities come in all shapes and sizes: detached and attached single family homes, low-rise and high-rise condominiums, converted apartment buildings or historical structures, townhouses or “twin” homes, and villas. Some large-scale HOA communities combine several different housing types within one Large Scale Association or Development District.

While HOAs can vary in size from a few homes to many thousands of homes, they share certain characteristics:

  • Portions of the property within the community – green space, interior and exterior common spaces, common use building structures, recreational amenities such as pools or sports facilities – are owned collectively by way of the legally established Association.
  • All owners are obligated by law to pay their share of the costs to insure, maintain, repair, and make future improvements to that common property. Owners are also jointly responsible for defending all legal and financial interests of the corporation, with authority vested in a board of directors/trustees.
  • Upon purchase, owners are legally bound to abide by all Covenants, Conditions, and Restrictions (CC&Rs) or Declarations of Condominium that were in effect at the time of purchase as well as any future changes to those legal documents, including Board-enacted Rules and Regulations.
  • The Board of an Association has broad authority to enforce all terms of the CC&Rs, Rules, and Regulations. The Board also has substantial authority and fiduciary duty to manage the financial resources and ongoing operation of the Association.
  • Association-Governed and Common Interest Developments are almost always created of, by, and for a Developer, who appoints the Board of Directors during construction phases. A developer or affiliated party may retain full or partial control over the community for several years or decades, depending on how the association corporation or special district is organized, and subject to state law.
  • The Association is usually established as a non-profit, not-for-profit, or mutual benefit corporation, with governance principles based on a corporate model rather than principles of the U.S. democratic republic.
  • As construction nears completion, control gradually transitions to a volunteer, elected Board of Directors, governed under the same Developer-created CC&Rs and corporate ByLaws. For the most part, volunteer leaders are not legally required to possess any particular set of skills, personal qualities, or ethical standards in order to serve on the Board of an Association.

6 obstacles to peace, tranquility, and happiness in association-governed housing communities

  1. Unreasonable, unconstitutional, or harmful deed restrictions. (CC&Rs or Declarations)
  2. Developer creation and control of communities.
  3. Corporate governance structure and statutes that place too much power in the hands of Association boards.
  4. Consumer exploitation by trade groups serving the industry.
  5. Double taxation, and absence of public administrative support.
  6. Lack of national standards, prevalence of corruption, and lack of accountability.

Disadvantages of Common Interest Development

Rights of property owners and residents, including tenants, are significantly restricted.

  • Residents are exposed to additional layers of regulation, imposed by multiple layers of hyper-local governance, including Special Development, Utility, or Improvement Districts as well as Association Governance.
  • Property owners have limited control over their living spaces, and must seek permission from the Association and/or the District before making any improvements or modifications. In multifamily housing, limited control extends to interior as well as exterior spaces.
  • Residents are legally obligated to compromise many of their personal rights, freedoms, and preferences, theoretically for the “good” of the association.
  • CID residents commonly report that their Associations and/or Districts fail to govern with transparency and openness.
  • Selective enforcement of covenants, restrictions, and rules is common, with little recourse for owners and residents in the event of a dispute.
  • Property owners have very limited control over the policy decisions of their Association or District boards, and tenants typically have no control whatsoever. Yet all residents are legally obligated to comply with those policies at all times.
  • Property owners / shareholders in a cooperative are subject to punitive fines, lien, and foreclosure / eviction if financial obligations to the Association are not met. Often, these financial delinquencies are relatively minuscule in comparison to the value of property or shares owned.
  • Other punitive actions may be imposed upon property owners / share holders including, but not limited to the following: prohibiting access to recreational amenities; revoking voting rights; association collecting rent directly from the owner’s tenants; garnishment of wages.

Property owners are exposed to increased financial, health, and safety risks and liabilities in connection with joint ownership of assets, and joint responsibility for community services.

  • Construction standards for community infrastructure are often relaxed, resulting in roads, storm water management components, utilities, and other essential amenities that do not meet current local building codes. Therefore, infrastructure may be poorly designed, may deteriorate prematurely, and often requires more costly ongoing maintenance and repair than publicly maintained infrastructure.
  • Multifamily housing residents are also exposed to increased financial and health risks related to failure of the building envelope or other common infrastructure, including elevators, common plumbing and electrical components, stairways and corridors, or shared common spaces such as laundry facilities or pools.
  • Security of the community is often privately managed and funded by the association. Examples include paid security staff, entry gates, surveillance cameras, and restricted entry systems. Public services of local law enforcement can be limited, unless the association is willing to arrange additional monitoring by way of contract with local police departments.
  • Costs for all lawsuits, whether involving owners, residents, or third parties, is the shared obligation of all property owners.
  • Property owners are responsible for the cost of insuring the association against various types of losses, as well as covering the cost of uninsured or under-insured risks.

About Deborah Goonan

I am the Administrator of Independent American Communities blog, and a Housing Consumer Advocate, exposing residential real estate corruption & educating consumers in search of the American Dream.

I believe that:

US housing policies must restore and uphold private property rights and civil rights and liberties for housing consumers.

Governance of communities must be open and transparent.

Consumers – including buyers as well as property owners and shareholders -are entitled to full disclosure of the obligations and risks of Association-Governed Housing and Special Districts that govern residential communities.

U.S. consumers and taxpayers deserve a diversity of neighborhood choice – including non-HOA, non-CID housing.

Housing policy must ensure safe, healthy living environments, the utmost respect for individual rights, and stable, long-term affordability for all U.S. residents, no matter where they choose to live.