July 19, 2011 — The Huffington Post is the world’s master of controversial publishing. Recently they really stirred things up in their “expose´” of Home Owners Associations (HOAs), “Home Owners Associations Cause Trouble in Retirement Communities“. Their one-sided broadside apparently hit a nerve too, generating 634, mostly angry, comments at last count.
The thrust of their mostly one-sided article was this: bad guy HOAs unreasonably foreclose on innocent homeowners, causing catastrophic damage. In particular, the authors cite the Inlet House Condo complex in Fort Pierce, Florida. The community has fallen on hard times, with units that sold a few years ago for $76,000 now going for as little as $3,000. Rats had infested vacant units and sewage was seeping into lower level units. Huff Post took issue with the HOA’s assessments and subsequent foreclosure of condo owners who failed to pay those assessments or other fees. Hundreds of angry people apparently agree, as they vented with Comments laden with examples of diabolical HOAs, vowing never to conform to these power grabbing boards
We respectfully disagree with both the major thrust of the Huffington Post piece and their angry commentators. Make no mistake, Home Owner Associations (often called Community Associations) are not always angels. There are plenty of examples of power-crazed, short-sighted condo boards. Many boards are guilty of poorly thought out rules, selective enforcement, and fiscal irresponsibility. Fortunately, many states and organizations recognize that these boards serve an important function, and are working to improve them. Florida now mandates training for board members as a way to improve management.
But on the other hand…
People who live in condos, co-ops, and planned developments share ownership of facilities and infrastructure. They also typically live close together and usually move into the community because it represents a certain look and lifestyle. Someone has to manage all that, or if not, the situation would become like the town in an old western where there is no sheriff, and the mob takes over. Serving on a condo or HOA board is not that dissimilar from jury duty, or offering to help in a volunteer organization. Everyone enjoys complaining, but only the brave (or foolish?) step up to help out. If you belong to an association and won’t volunteer or come to meetings, don’t complain.
The housing and financial meltdowns have been very, very difficult for condos and community associations. In Florida in particular there are many associations where a significant percentage of the units are in arrears for dues or assessments. Up until recently, most associations were fairly powerless against homeowners who either chose to or were forced to default on their obligations. When even more than a small percentage stop paying on time, the results are catastrophic for the other residents. Cash runs out, bills don’t get paid, and employees and services have to be cut. The owners who pay their bills suffer unfairly. As the Post article eventually pointed out, quoting Association manager and Inlet House resident Janice Stinnett: “It’s unfair that everyone is paying extra to cover these deadbeats”. The problem eventually becomes a vicious cycle. Prospective buyers see that the community is in trouble. Property values fall, and more and more owners either walk away or stop paying dues and assessments. Although it hasn’t happened yet in big numbers, eventually some of these communities will totally fail, and all of the owners will lose equity.
We were appalled at the sensational nature of the Huffington Post article, so we asked Joe West, President of the Community Association Network if he would comment about it. His response is below:
Joe: The article conveniently overlooks the millions of Americans who decided they wanted to live in an environment with a set of rules on how certain aspects of that environment would be operated. Instead it focuses on those who, having moved into this environment, decided they didn’t like some part of it. And when they didn’t get their way, or if they got reprimanded or fined, they ran to the press crying that HOA’s are evil. The people who wrote this article obviously didn’t do much research, or have any basic understanding of the subject matter, and the complete absence of any data supporting any of the claims. They didn’t challenge or ask the person making the statement to provide any sort of facts regarding any of these descriptions.
The news media treats condo’s and HOA’s as if these associations were some monolithic entities crushing the hopes and dreams of individuals. That might get the authors better placement in the news but it is neither truthful nor accurate. The association is a group of people who made a choice to live in a community that had certain restrictions and rules, and elected people from among themselves to govern the association. What is interesting is that somehow the media looks at associations as if they were supposed to be perfect and that human foibles somehow show a failure in the “system”, rather than a microcosm of society in the U.S. today and representative of how electoral government works. Individual homeowners have the same method of resolving disputes with their association as they have with their government, they can take them to court. However they somehow think that there should be some form of “cheaper” solution.
So maybe the authors, or the people they interviewed, might be willing to answer these questions:
– When someone stops paying the assessments they agreed to pay, how long do you allow it to continue before you take any action?
-How much hardship do you want to put on their neighbors to cover their share of the bills? None of the people complaining were serving on a board, faced with the decisions of how to pay the association’s bills, with a declining revenue base. They could complain, but they didn’t have any constructive suggestions, just bile.
Step into the shoes of those unpaid volunteers who have to make the decisions they are required to make. It’s easy to complain – it’s not so easy to make the decisions that have a real impact on your neighbors.
Homeowner and condominium associations are simple:
First, you don’t have to live in one. So for all of the commenters who hate the thought of living somewhere where someone else has some degree of control over your residence and actions – good news, you don’t have to. Of course local governments are beginning to enforce local ordinances a little more so you’re never really going to be “living free”.
Most recent state legislation mandates greatly increased administrative actions on behalf of the association, at increased cost to all owners. These are often enacted as a result of media stories or “anecdotal evidence” presented by upset homeowners, many of whom broke their agreement to abide by the covenants, conditions and restrictions when they moved in. Even the veteran putting up the flag pole – yes the problem was the pole, not the American flag – agreed to abide by the rules when he moved in, so does his breaking his word make him a “dishonorable” veteran? The gentleman in the article who stopped paying his assessments in protest is part of the problem, not part of the solution, and unfortunately, will find out that that he’s going to be on the losing end of this disagreement.
After 35 years of working with associations, I’ve found that you get the association you deserve: “you get who you elect – good boards make good associations – bad boards cause problems”. Almost all of the board members I have met (which number in the thousands) try to do right by their neighbors. Most are not power-hungry dictators. But you would never know that by reading anything in the media today.
Homeowner and condominium associations are not going away. They represent a win-win to local government and developers by increasing property density and the tax base while reducing municipal costs. Without them, your local taxes would be much higher. They will never be perfect and there will always be people who move in and then decide that the rules don’t apply to them, or they will elect some idiot to the board who has his or her own agenda that an owner disagrees with – and trouble will ensue . But you get that with every organization in the world – when people and their personalities are involved – conflict eventually happens.
Condo’s and HOA’s have become a popular “punching bag” with the media. They can present it as a “human interest” story and rarely get countered by spokespersons for the association, as it would normally require the board to meet, and that never fits in with the news timeline. The media, in fact, has become the “bully” that homeowners have accused the association of being. I track news stories about condos and HOA’s and if you took every negative story about associations that has been reported about during the past year, (even the stories that only reported the owner’s side), you still wouldn’t have 1/10 of 1% of the associations out there. Not exactly a major trend. But people don’t sell books or get their names in the news when it comes to boring facts.
Thanks Joe, we appreciate your insight into this situation.
For Further Reference
Home Owners Associations – Friend or Foe
Meet the New Boss – Your HOA
How to Get Ready for Your New HOA
What You Need to Know When Your Developer Turns the Community over to the HOA
HOA Rules and Regulations – Friend or Foe
What do you think? Could you live in a community governed by an Association, as about 1 in 5 Americans do? Have you had experiences good or bad? And what do you think boards should do with their delinquent owners? Let us know in the Comments section below.