HOA Trends

OVERVIEW

Throughout the nation, private residential subdivisions controlled by declarant and homeowner association boards have ‘mushroomed’. Increasingly, we are witnessing the handing over the traditional public governance powers, not to mention the quality of our lives, to unregulated private corporations and their outside for-profit operatives.

The HOA private community government provides no system of checks and balances and there is no ‘constitution’ to limit their powers. They are the almost invisible government that intrudes into our very personal lives in a way unimagined by any of the other regulatory agencies of our society. The HOA board members simultaneously occupy the legislative, judicial and executive branches with absolutely no local, state or federal oversight. In disputes with homeowners, the board acts as accuser, prosecutor, judge and jury. There is no appeal process except through the courts.

David Feingold, a California attorney with Ragghianti Freitas in San Rafael, Calif., who’s handled association disputes says:

“You’re mixing your home, your money, your family and you’re putting your neighbors in charge of that. So it’s a pretty volatile mix”.

Applicants for board positions need no education or applicable experience.  There are no background checks and bullies and convicted felons can also apply.

TRENDING LOCALLY IN AZ IN 2014

Recently, on the local level, I have observed an increase in behind-the-scene actions of members in for-profit operatives:

• Political Operatives.  The Community Association Institute (CAI) is viewed by most outside the industry as nothing more than a trade organization for management companies, association lawyers and association vendors. The unannounced purpose of the CAI is to maintain a steady flow of cash into their coffers unencumbered by any regulatory entanglements.  To understand how the ‘outside operatives’ fund their agenda in the legislatures, it is important to follow the money trail.  This trend will continue unabated in 2014 and beyond.
• Community Manager Operatives.  In 1992, the CAI was completely restructured.  community managers took control of the decision making process.  It was then emphasis was shifted to legislative advocacy through paid lobbyists and the grass roots mobilization of thousands of CAI members.  Subsequently, in Arizona, the community managers formed the Arizona Association of Community Managers to promote legislative advocacy on the local level.  A more recent disturbing development is the national mega-corporations that are buying local management companies and consolidating the power base of community managers.  This trend will also continue in 2014.
• Association Attorney Operatives.  A property owner in a community association gives up many of their protections under the Constitution and United States common law.  HOA lawyers know this and it is a prelude to a payday.  This area of law has developed into a cottage industry of lawyers who feed off liens, fines and fees.  A more recent disturbing development is the emergence of litigious law firms in southern Arizona  specializing in representing HOAs and maintaining associations as soft targets.
• Association Vendor Operatives.  Association vendors are recruited to become members and financial contributors to the CAI.  In 1989, California homeowners discovered an advertisement put out by the CAI headlined ‘Strike it Rich’ – an invitation to other vendors and politicians to come to their trade meetings to learn about the financial opportunities available to them in planned communities. Then, fourteen years later in 2007, another CAI ‘Casino Ad’ surfaced in Illinois – an enticing invitation to ‘Hit the Jackpot with Community Living’. 

WHAT DOES THE FUTURE HOLD?

We have been led far beyond the original concept of association governance – that of common area maintenance.  The apathy of homeowners has allowed this to happen.  It will take an organizational effort at the grass roots level to reestablish member control over governance.  That needs to happen.  Individual comments to Board members and management are ineffective…a group voice will have a greater impact. The outside operatives and lobbyists have been able to raise their voices above the association members.

Current Arizona law is seriously flawed in its failure to provide proper checks and balances to prevent HOA abuses. Unethical people can, within current law, commit any number of serious, fundamental abuses by use of the legal powers granted to HOAs. They will often micro-manage your personal and property rights through means of creative interpretation of governing documents and the drafting of new rules and regulations.

As we know, well qualified residents are walking away from Board positions and committee assignments.  Other well qualified residents are not interested in running for those positions. 

Where are you in this picture? There are ways concerned homeowners can make their collective voices heard in a measured and civil way to achieve a more open, inclusive and transparent community government.  Form a neighborhood group and make change happen!

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