Department of HOA Regulation and Enforcement

In recent threads posters have been calling for each state to set up a special HOA regulatory agency to basically curb bad behavior of Board members and make them play nice with others, paid for by either tax dollars or by assessing each member of an HOA a fee. Right upfront I wish to say that I personally find this proposal patently absurd. Keep in mind that things like embezzlement and fraud are already against the law and local prosecutors will deal with the perpetrators. That is not what these people want, they want to use your and my tax or assessment dollars to fight their civil contract battles for them.

While something like this might only cost the residents of states like FL & CA a few dollars a year. Indeed I believe FL charges each COA $5.00 per unit per year to fund their ombudsman's office but with states with few HOA's the price would have to be considerably higher per home. And remember that the FL politicians have been known to raid the fund to finance shortfalls in the general budget; think your state will be any different?

The mechanisms already exist to curb bad behavior, recalls, rallying - informing and organizing your neighbors, small claims court etc. Why should the rest of us fund a new bureaucracy to fight your battles? How do you see it working? Do they investigate every claim? Yes, I realize that some people have real conflicts with their HOA but every HOA has at least one Chief Complaining Officer. Now you are going to give them an "Official Place" to complain to. How are the bureaucrats supposed to separate the wheat from the chaff to find the honest to goodness problems?

The above is just my opinion, that and $5.00 will get you a small cup of coffee somewhere but for those of you that want this, I'm genuinely interested in how you see such a system working?

I always find it funny how people want less government in their life but then complain they want more of it to regulate their HOA. Considering all the power to regulate and manage a HOA is entirely in THEIR hands. It is YOU and your neighbors. There is no "THEY" or "THEM" in a HOA... Cause they and them don't care and they and them do nothing...

My solution: More church, more meds, more buyers for my house, and more education...

We pay and have agreed to pay for government services. Glen's point is that if we want to also include HOA control in our government, expect we have to pay for that too. We would have to go to a legislature and supreme courts to get this done. That takes money. It would NOT be a "Free" tax ride to have government be involved in our HOA's. Something I am NOT a supporter of. More government and more subject to taxation and regulatory charges because I bought a home with restrictions the other owner's agreed to...

I am one of those people who would think government regulation could be a good thing and agree that just because a law or bureau gives the state authority over HOAs doesn't mean it would be effective in achieving its goals. I live in a state with plenty of HOAs (HOAs outnumber non-HOA homes in my area) and while not every HOA is bad, and the bad ones make the news, I think that the problems that can arise with a bad HOA are enough to warrant state intervention. While I agree that issues arise are essentially contractual disputes, the nature of C&Rs - essentially private governance with the potential to cause financial ruin, strip a homeowner of their property, etc. over silly (and sometimes extremely subjective matters) - some protections should be available.

First let me state that even though things like fraud or embezzlement are against the law and local prosecutors would deal with such issues, it has been my experience that HOAs are highly misunderstood and the government's official position seems to be for homeowners to lawyer up and fight the fight (or shut up and take it).

Take my situation for instance. Looking strictly at the facts, a HOA outside of my geographic neighborhood (as defined by my C&Rs) decided they had authority to enforce my C&Rs while simultaneously ignoring them (the original C&Rs were quite clear on authority and amending), rewrote the C&Rs, and then threatened legal action if I did not pay a mandated assessment of their choosing. They did this to a few hundred homes and got many of the homeowners to pay giving them virtually an unlimited budget to litigate homeowners who refused to pay.

I first tried to work within the system established by my C&Rs. I brought them to the attention of the HOA. Their response was to threaten legal action.

I brought them to the attention of the entity that the C&Rs granted sole amending authority to (a local philanthropic organization). They held the position that the HOA's actions were in violation of the C&Rs and thus meaningless but they refused to pursue the matter further unless they were to be financially impacted.

I progressed to the next level. There were no state agencies that had the authority to govern HOAs (the legislature stripped the Department of Business and Professional Regulation (DBPR) from having any real authority), I went to the Attorney General and my State Representative for assistance. I informed them of an organization fraudulently claiming to have a contract with me and then using that fraudulent contract to essentially extort money from me. The AG's response - they printed the front page of the DBPR and told me to contact them (I did and the DBPR told me they couldn't help). My state rep responded by trying to find some way to help but said their hands were tied since there was no governing agency.

This left me with one other option - pay up or sue. Luckily a homeowner in the neighborhood could afford the lawsuit and after hundreds of thousands of dollars and several years the courts ruled in their favor. I for one did not have that amount of money so what were the options left? Allow a corporation with a fraudulent contract authority to enforce said fraudulent contract? Even if I did and tried to work within that fraudulent system, I would have had no luck - the BoD ran the show. They held unseen proxies, changed the Articles of Incorporation and By-Laws to suit their needs, locked homeowners out of meetings, and when elections took place, the BoD granted them the only people to be proxy holders, the only people to appear on the ballot (although they left a blank spot for write-ins next to their names, and when other homeowners did become board members they were treated as glorified volunteers - they got a seat at the table during meetings but they were not invited or privy to any real information and were kept off state filings.

Now the costs of such an agency? In Florida I believe the cost is $4 (or maybe $5) of every property in a HOA. Considering my experience in just one neighborhood, I think that is a small price to pay for security of one's property. I do find it reprehensible that the state could effectively raid those funds and render the agency useless but that is probably the chance with anything, and I think that the protections to the individual property owner can help stabilize the housing market somewhat. Imagine if a state agency was able to help my situation. A lot of people would have been saved a lot of money and the HOA would have been sent back to their neighborhood and continued to serve their homeowners who set them up. Now the HOA is bankrupt dozens of homeowners are facing legal action because of the methods in which they attempted to gain control of the surrounding neighborhoods. I am sure any potential home buyer who comes to my neighborhood and hears of a massive lawsuit of bankrupting possibilities would be scared away. The desirability of homes probably dipped in an otherwise desirable neighborhood.

Glen asks "How are the bureaucrats supposed to separate the wheat from the chaff to find the honest to goodness problems?"

I think the answer is simple: look at the facts.

When the HOA argued their case they cited condo and mobile home law (not HOA law) to defend their actions and insisted that because people believed in them they existed (I call this the Tinkerbell defense). The plaintiff cited state statutes and official records - all easily-investigated documents.

Consider this - the cost of the HOA attorney delaying the case and tying up the courts for years or a bureau looking at the information and stopping the dispute from ever progressing, all at a minimum cost?

I see another positive regarding elections. I have read that here in Florida the Condo ombudsman had done a great job dealing with elections disputes. Taht seems to be a big thing in the communities down here. Many of the complaints are probably unfounded but the government has done a great job mitigating those disputes and saving those affected communities lots of time and money, and as some here state, the HOA's money is the money of the membership so in Florida, is worth a $4 dollar annual tax or a special assessment of much, much more?

The HOA is already controlled as a corporation. Those documents are filed with the state. Which means the HOA has to follow state laws. Violations of corporate law or other state laws have an avenue to pursue. The Covenants and Restrictions are filed at the COUNTY level. That means the HOA has to follow COUNTY laws. There are an avenues to pursue that. The by-laws of a HOA are internal documents. There are avenues to change them and adapt them within your own HOA.

So why if there are State, County, and even HOA rules/laws already in place do we need more rules and regulations? A HOA is managed by it's member for it's members. You don't like the rules or how things are run, take a gander at your documents. They will tell you how to resolve, change/amend, or even to kick out those not behaving. The power is already in your hands as members. It is just done by majority. Just like our own government.

Still I don't get how in these belt tightening days of the government and trying to save costs, that we would want our tax money to go toward resolving HOA matters? If a majority of Americans are against us paying for care for illegal residents, then why we be for paying someone to control HOA's? They make court mediators for that...

Your HOA is a government onto itself as well as a corporation. It's no different than any other organization with it's issues. Your dealing with people. It just happens you are one of those people and you just don't like it. Why then ask for MORE people to step in if they aren't already members who have voting powers?

HOAs were required by local governments to help relieve their financial burdens as it applies to certain infrastructure within each of these communities.

I can only speak for myself in California, but I pay a double tax. I pay property taxes and HOA assessments. My property taxes are used to help maintain the roads I travel throughout the city. I also pay an assessment, which in part helps pay for the roads in my community, no government involvement. I also pay to maintain a private street that the rest of the city uses without paying for.

I don't think it's out of the question to have a government agency oversee the enforcement of the rules that the legislatures have put upon us. As HOA and corporations we pay annual fees to the Secretary of State. I would not be against paying a few extra dollars for government oversight.We aren't talking a few HOAs here. California has more than 47,000 HOAs and growing.

As a community manager, I see abuses of power everyday of the week.

Mike once again you are long on rhetoric, short on substance or facts. Unless they have repealed it NJ HOA homeowners get a break on taxes if the service is available to non-HOA residents. We used to have a poster here Gerald from NJ who explained it and posted the law.

Two years ago the state of Virginia established the Common Interest Community Board (CICB). Our HOA is charged a yearly license fee of $1000 to support this board. So far my experience with this board is that it provides political cover for the management companies and law firms that work for HOA's (see, we are regulated by the state so we're legit ...) and not much else.

I guess another SheliaH posted that, because I don't remember saying this. HOWEVER - recalling the board is precisely what homeowners need to do if they don't like what the current bunch is doing. I never said it would be easy, change is NEVER easy. Yes, it's more problematic if you have a small group of people and you're the only one who wants the change (remember majority rule sometimes means all the fools are on the same side)! But for the larger HOAs, you might have 9 board members vs. 100 homeowners, for example. You mean to tell me the other 91 are completely incapable of getting rid of these people?

I know people have a dozen other things to worry about and working for change can be stressful and expensive (which is why you try to rally the neighbors to share the load). It may may sound idealistic, but honestly, where would we be if a few people didn't decide enough is enough and started the work to make the change. It wasn't easy for them - why the hell do you think it'll happen overnight for you?

This is YOUR home and HOA or no, no one will care more about it than you do. Homeownership is not the same as renting - you have more responsibilities, so if you're in a HOA, you better pay attention to what rules are being made, how they're being enforced and where the money's going. After all, you already spent lots of time and money looking for the house and sitting through closing. Your house won't increase in value just because you're a homeowner and you lived there for X number of years - you have to invest in it. And people have to understand you don't just buy a home, you buy a neighborhood. You have to consider that just as much as the house and if the neighborhood is governed by a homeowner association, you'd better get an understanding of what that means. HOMEOWNERS are the ones who make or break the organization, just like parents, students and teachers make or break a school district - you have to pay attention to who's making the decisions, not just pay your money and go watch TV because your quality of life depends on it.

Kevin,

I can provide you a copy of the invoice from the CICB. It shows how that fee is calculated. It is $1,000. We are an association of 801 homes so it amounts to $1.25 per home per year.

Oh. The way I read it each individual homeowner had an assessment of $1000. In my opinion $1.25 isn't bad but only if the regulatory board actually works.

From my experience with some agencies, judges etc. they just ignore the problem o gloss over the details. When my HOA was sued the first judge didn't even look at the information. He granted all the HOA's motions and dismissed much of the case. He was originally a family court judge. When the plaintiff cooperated with the motions and filed more of his own the judges switched and a more detail oriented judge familiar with property and contract laws.

That is why while I am in the opinion that regulation would be great but realize not all is effective.

It was me, SharonH posting this. Brings up a funny story. On our first date my husband kept calling me Sheila. I told him if he couldn't get my name right I wouldn't go out with him anymore. So then he started calling me Cheryl. Yikes!!! We've been married for 40 years and he may call me other names but he has never called me Sheila or Cheryl again. LOL!

My overall issue is I distrust politicians/bureaucrats less then some of my fellow owners. When push comes to shove, I would rather deal with my fellow owners as we have some things in common.

When I read of some of the problems with HOAs on this site, I realize the problems we have are small compared to some problems others have. I would be concerned about more government regulation. None of our units qualilfy for a FHA loan. The possiblity have having some units qualify for a FHA loan was discussed, but we decided we did not want the extra government regulation.

As I have said elsewhere, HOA's should be licensed like dogs. Like dogs, those HOA's that are lame, incurably ill, rabid, or vicious should be exterminated.

Erika

There has been a bill in the SC Legislature to control HOA's. It has been stalled for several years by people like me. I am not a lobbyist nor do I know how CAI stands on the bill. I am a simple HOA owner who advocates for and wants the bill not to be passed.

I believe our present SC Incorporation laws and our Covenants/Bylaws work quite well.

I also distrust politicians and bureaucrats.

There are some BOD's that should be "slapped silly" but we do not need to do that. Just follow the law, Covenants, Bylaws, etc. and get them out. If unable to do so, then one must ask themselves is this the way the majority here wants it? If the answer is yes, then maybe this is not the place for me. Thus either accept it or move on.

SC does have a Condo control act (SC Horizontal Property Act) for high rise, multi unit, Condo Associations. It is not for other Owner Associations.

Erika,

Excellent point!

John,

You don't trust politicians, but honestly that is what the BOD is comprised of-at a very local level. So, like you, I don't trust politicians including the BOD. There ought to be some manner in which the wronged can appeal without having to spend a small fortune to do it. Some board members take advantage of this IMO, that the cost of litigation is enough to deter action being taken. This then encourages the behaviors so many write about here. They know they can get away with it most likely. It is my opinion that is what we have experienced.

John,

We all know that all politics is not local, it was just a nice saying years ago. Obama won with a national e-strategy that Republicans are behind on trying to duplicate for 2016.

My point wasn't an analogy, it is simply that every elected position should have some checks and balances. The situation I live in is IMO an onerous one in which the burden to protect my own investment is too great.

Please again, look at all of the stories posted on just the home page of this site. There are real problems out there. It seems a group of you just want those of us who rationally criticize our boards all while offering constructive help prefer us to just admit we are the ones to blame, that all HOA boards are populated by saints and if we can't get along we should just move no matter what the local real estate market dictates.

And I am the one who needs help?

John,

Generally I agree with your principles. IF voting were fair we could make progress. It is not. The unsold lots in my community are allowed 10 votes each, and only pay 10% of the dues a sold lot pays that receives only 1 vote. Please point me to other elections other than HOAs that "stacked" voting is allowed. I understand the developer's need to protect their investment initially, but this place started in 1997 and with over 75% of the lots sold that argument is mute at this point. The developers IMO are taking advantage of rules that were intended for one purpose, and not what they have used them for. To think the membership would make decisions placing values in jeopardy is a joke. IMO we would make better decisions than the developers/board and would most likely help sell the remaining lots if we could announce that our community is now independently managed.

Again, IF the voting were fair your points are solid. I would much rather see the membership manage an ugly situation than invite more government intervention. But, if the membership cannot effectively protect their investment and prevent harassment, then there has to be some avenue to seek recourse that is not so burdensome to one party that the other party can take advantage of this lopsided situation. Address this for me.

Tip O'Neil's autobiography 'Man of the House' was an enjoyable read, even though I do not have much in common with his side of the aisle. Interesting how back then he and President Reagan could fight against each other so passionately, but at the end of the day share an adult beverage or two. This country needs to have that style of working with each other brought back-fierce disagreement punctuated by civility. This is a great place to start-on a local level

Thanks.

So if a BoD is out of control, breaking laws, covenants, bylaws, etc., and a homeowner in the right is unable to succeed in get them out that homeowner should be the one to leave?

I disagree.

I heard that a lot of times from the homeowners who supported the HOA - "If you don't like it, move."

I find that same kind of rhetoric as offensive as when an abusive BoD may try to litigate someone wrongfully into submission.

That is exactly what happened to me.

When the crap started and after the BoD circulated their new covenants and joinder and consent forms my family contacted the BoD and their attorney. We asked a couple simple questions. How were they able to force my property into a mandatory-paying situation and what laws could they cite to back up their position.

Their lawyer responded with a veiled threat. They told my family that they have done it before and they will do it again and they would take us to court and force us to not only pay my legal bills but the HOAs and it would be expensive. Their basis was a collections case in county court that they cited from another neighborhood. They probably didn't count on my family taking the time to look up court records. That case involved a family not paying their assessments and when sued by their HOA they claimed the bill must have been lost in the mail or something and that they were willing to pay the assessments.

The HOA attorney misrepresented a collections case to make it sound like they had legal authority to do what they were doing simply to intimidate homeowners into paying. The BoD even published the attorney's response in their HOA meetings and handed it out to all those in attendance.

The homeowner that sued them also faced opposition. The HOA filed motion after motion. One motion was to dismiss his attorney because he worked for a firm that had worked with the HOA nearly 30 years ago. They delayed every motion and would purposefully supply incorrect or incomplete information in discovery. That is why the case has been going on for more then 5 years and cost a few hundred thousand dollars. How many homeowners do you know who have that kind of cash? In my neighborhood, 99% of the homeowners don't but if the HOA got their way they could have levied an assessment of just a couple hundred dollars on every one and have enough funds to last a decade.

What I see from my own experience is a small group of unqualified people taking over HOAs and using the authority and funds from that office to harass members. For this reason, I do find it in the public good to have an enforcement agency to ensure board members follow the law, including maintain the property.

The problem goes further than just behavior. In my case, amenities have been mismanaged and not properly maintained. This leads to lower property values which affects not only the homeowners but the community tax base as well -- it's a public concern locally.

A second way it affects the public concern is when the HOA violates Fair Housing Laws. HUD intervenes when board members violate a resident's civil rights by enacting rules that target and discriminate, or enforce rules in a discriminatory way. In my HOA, they constantly call the police when people of color are doing things and claim not to be racial profiling because they believe "only those people are breaking the rules." We know from literature that most people break the rules and we only discover it when we are watching certain people more closely. In any case, thousands of tax dollars for my local police, court costs for restraining orders, sheriff dispatch dollars through my county, and local HUD funding have been spent on just my little HOA. You are already funding HUD because it's federal and are most likely already paying for other such costs in your community indirectly.

Finally, many HOAs, including mine, have had people default. Yes, it is the housing crisis but it is much more. When people are miserable they often choose to avoid and leave. They don't stand up to the bully on the board, they just stop paying and try to find another property. It has happened in my community quite a lot -- where someone has just bought elsewhere and waited for a short sale on their place. I don't have signed statements as such, but I surmise that much of that is related to the shock of being harassed and hounded by neighbors on the board. This is a systemic problem in our society and affects us all.

As many of the reason related to local, state, and federal services as well as the economy in general, I would much rather see the funding and efforts focused on training and enforcement. Wanting to be happy where we live does happen to be a compelling reason for me to want this service too; but even outside of that it is clear to me that we could do better with prevention than is currently being done with reaction.

How it would work: mandatory training course to get certified, register with the state, meet requirements, bonded, pass annual survey by members, term limits

Karen,

Thanks for some reasonable recommendations that I find myself in full agreement with. It is amazing how board members get away with bullying. So many people recognize it but are very hesitant to stand up to it. I guess they fear becoming the target as well?

Karen with all due respect only CA may have more HOA regulations than FL and Fl does have an ombudsman. The problem with HOA's as one poster quipped many years ago is that they have people living in them. Who elects out of control Boards? Their fellow homeowners. Who keeps them there when they are doing a bad job? The same homeowners. I don't mean to be religious here but you reap what you sow. Meaning you get out of a HOA just what you are willing to put into it's upkeep.

I thought the new law authorized a HOA ombudsman but the DBPR has been slow in updating any information and I have yet to see that new HOA "tax" deducted on HOA home tax bills.

I also partially agree with you regarding homeowners reaping what they sow but I feel the burden should be equally distributed. In my neighborhood the board was indeed elected by the membership and things were fine... Until that board decided to push an agenda contradictory to the desires of the membership, going beyond and becoming dictatorial, refusing to grant entrance to meetings, refusing to acknowledge new board members, and essentially wage a legal war against anyone who vocally opposed them. In those situations an impartial state agency would be welcome. Had there been an ombudsman 5 years ago many homeowners in my neighborhood would have been spared costly legal battles and the HOA would have been preserved.