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Old 02-08-2013, 05:30 PM
 
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There is one reason HOA's are becoming more prevalent, property values. HOA's protect property values.
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Old 02-10-2013, 06:48 PM
 
165 posts, read 174,503 times
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Quote:
Originally Posted by Wardendresden View Post
Here is why HOA's are and will continue to proliferate:



Homeowner association - Wikipedia, the free encyclopedia

This is why every state needs to have certain protections in place such as those I mentioned in my previous post that are proposed by a Houston attorney.

HOA's can be good, but only as good as the people in them. Buy into one without reading the CC&Rs or without willingness to participate in and monitor the people in charge---well you get the same thing that you get in politics at the local, state, and federal level--lack of accountability.

The last two years of my working career, after retiring from the insurance field, I served as administrative assistant to the president of a small Homeowners Management company (55-60 communities). I saw HOA's that worked well, and several that were completely dysfunctional.

I also served on the board of directors of my own HOA. When I was selected to replace a board member that was leaving, I discovered a community in total disarray. Board meetings would be attended by people screaming and shouting and calling one another names. People from more than half of the 192 units would show up to voice opinions. Within two months of being on the board there was a recall election and all of us were nearly thrown out---fell short by about four or five votes. No one even knew me, but considered me to be a part of the problem because I'd been selected by the current board.

Two months after that was annual election time. Two of the five board positions were up for election, and two of the existing board members decided to resign. My term was to continue for another year, so I chose to stay on. The new board members were part of the "opposition". The old board members wanted to sue the builder for construction defects, the new board members did not want to face the attorney litigation.

The first thing the HOA management company we had did was resign. We would have fired them anyway. We hired another, more compotent firm that came in. Our manager was a former city councilwoman who knew how to handle outbreaks in a meeting. The first time someone jumped up and began shouting she said, "Sir, you will sit down and wait your turn to address the board." He said he would say what he liked when he wanted to, and she replied, "Sir if you do so again, I have 911 on speed dial. The police will be summoned and even if you return to your home they will be at your door."
No one EVER interrupted proceedings again.

My suggestion was that maybe we should call in some outside inspectors to review construction. Ultimately the new board did that and discovered serious construction defects, the worst being that no plastic sheathing was placed between the outer walls and the siding and was resulting in some mold.
Despite the discovery many were still concerned about suing the developer. It took us almost three years to get everyone on the same page--and we did try negotiating with the builder, but of course he had insurance and had to defer any agreement to them--so the lawsuit is STILL in process seven years after it all began. But by now everyone knows that there are serious construction defects on the property.

I left it all (Colorado) in 2010 when we moved to Texas. Served just over three years on the board and was elected twice. Well before I left, we no longer had to hire another facility to hold our board meetings (because of the number of people attending), we could use our clubhouse. Only a dozen or so people would normally show up.

Remember this, boards on HOAs are made up of amateurs. But these amateurs potentially hold your future in the balance. You need to monitor them by attending meetings, requesting copies of minutes (or better still urging the minutes be placed on a website). We posted our budget on a private website including income/expense reports. We sent a newsletter out every other month posting reminders, telling people what was under consideration, and would send out a special letter if any major changes were being considered on the rules in order to get feedback. Our biggest homeowner problem was the limited visitor parking and the narrow streets. We could not allow anyone to park in the the streets because it could potentially block emergency vehicles. We could not allow homeowners to park in the visitor parking areas because there wasn't enough for visitors.

So, like any political organization that is controlled by people, the people have to control it or situations can deteriorate. If you are going to live in an HOA, and since 62 million people already do, make sure you keep your irons in the fire. Be proactive rather than reactive. Insist on regular communication from the board to the members.

In almost every situation, the people most unhappy with HOAs have failed to be involved in the governance of their community.

Again, I suggest every state adopt the AARP Bill of Rights for HOA members. It provides a fair and balanced approach to the responsibilities of boards and the rights of members.
Thanks for your great explanation. As mentioned, I'm pretty sure that any new development in NOVA has to have an HOA for reasons that you mentioned, and probably more. For one thing, the counties don't want to build and maintain roads. Developers in Fairfax Counties must "proffer" and build roads and other facilities in order to be approved for zoning. There is no "by right" building in the state. In other words, you need approval from the county in order to build. This is not just for building permits but for zoning itself.

My condo association story is as good as yours. Since it's too long, I'll just summarize... The developer agreed to build a clubhouse but didn't. It packed the first board of directors with supporters who it had helped, so there was no opposition. There were defects that caused water leakage into the units. After several years, our association decided to sue. They won, but the company was a shell corporation, so there was no money. The lawyers should have known this, and did. They duped the, as you say amateurs, who were in charge of our HOA. I'd like to add at this point that there is a huge cottage industry in taking advantage of HOA's.

After they had taken an insane amount of money from us, a resident pressed them to try to negotiate a lower fee with the lawyers. This was poo pooed by the directors. Eventually, they did do it, and the fee was cut in half. Just the same, it was such an exorbitant amount, that a special assessment had to be levied. During a spell of several years, the board just lollygagged. It turned out that we had far less funding than we needed, so a special assessment was made for this. In addition hundreds of thousands of dollars needed to be spent to fix the water damage.

The new board went into a spiral of increasing HOA fees. It approximatedly doubled in five years. Another special assessment was made for preliminary repairs. Instead of putting the money into a CD or a dedicated fund, they ignored pleadings from members and dumped the special assessment money into the general fund. Much of this money was embezzled but the son of the owner of our management company. This was Koger management in Fairfax. The son invested the money in a steak and sushi bar, lost the money, got caught. It ended in a shooting spree and long police chase. Koger went under, and with our money. Fairfax, Va., Embezzler Is Sentenced to 66 Years in Shooting Rampage


Next the board imposed a $10,000 special assessment on each unit (depending on the size of the unit), which was 2x what was needed. We can never prove it, but it looked like false damage claims were made by many residents. In some cases, the unnecessary fees were never returned to residents.

There were other abuses, such as board members taking possession of parking spots valued at approximately $10,000, towing cars of people who they didn't like, and charging fees for damage to common areas to people that they didn't like but who they suspected of the damage. The increased condo fees came at a time when the housing market was tanking. This devalued the units considerably. The commuinty was very divided with fights similar to the ones mentioned above. Members were told that they could not speak at meetings at all. There was one person charged with assault through an accusation by a board member, which turned out to be bogus. There was more. Now it is an aging, divided community with many renters. Values have not returned to levels that they should have.

As mentioned, HOA boards are amateurs and very fallible people. They can be easily corrupted. Since they are volunteers, they often would rather spend money than have to shop for a good vendor. I have seen this phenomenon over again. When there are ample funds, they spend them. HOA's that are low on money manage to spend a fraction of the cost. I have seen fees for simple projects bidded at thousands of dollars that in other HOA's have been done for about $200 with a few hours of volunteer work.

Anyway, thanks for you information on the regulations that have practically mandated HOA's. Another beef of mine is the requirement in Faifax County to give a certain number of units to low income people. That's another mandate to vent about another time.

I will just end by saying that this condo association decreased values by adding to the monthly fees that buyers calculate when making a purchasing decision. The fee was absurdly high, and it diminished prices. They destroyed a sense of community, wasted thousands of unit owners' dollars, and has created a very undesirable community. It is increasing becoming a rental area, with absentee owners sitting on the board and holding a great deal of sway. The community is probably in the stages of decline.
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Old 02-10-2013, 07:11 PM
 
Location: Maine
2,018 posts, read 2,712,626 times
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Quote:
Originally Posted by mikebnllnb View Post
There is one reason HOA's are becoming more prevalent, property values. HOA's protect property values.
Why many people avoid HOAs:

Fairfax homeowners group humbled by court battle with residents - The Washington Post

Both sides were/are being incredibly arrogant. What a mess. Maybe Old Tired Man is right...
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Old 02-10-2013, 07:28 PM
 
Location: New-Dentist Colony
5,740 posts, read 8,981,697 times
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Quote:
Originally Posted by Fern435 View Post
Why many people avoid HOAs:

Fairfax homeowners group humbled by court battle with residents - The Washington Post

Both sides were/are being incredibly arrogant. What a mess. Maybe Old Tired Man is right...
I'd never heard of Belhaven before, but after reading this, I thought the HOA was the arrogant party. All the couple did was post a political sign right before an election. The HOA said it was 4 inches too high and then fined them $900--with the latter not even being one of its stated powers in its charter.
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Old 02-10-2013, 07:50 PM
 
Location: Maine
2,018 posts, read 2,712,626 times
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Originally Posted by Carlingtonian View Post
I'd never heard of Belhaven before, but after reading this, I thought the HOA was the arrogant party. All the couple did was post a political sign right before an election. The HOA said it was 4 inches too high and then fined them $900--with the latter not even being one of its stated powers in its charter.
The HOA was arrogant. But to me, both sides are to blame. The couple was very selfish and arrogant in how they conducted themselves and seemed unapologetic about ruining what had been described as a sociable neighborhood with a community feel. Was it really worth it to prove some ridiculous point? Who would even want to live in a neighborhood that has that kind of atmosphere?

I passed by that neighborhood often when we lived in that area and always thought it looked so charming. Even I could have tried to get along with the HOA and the NoVA neighbors there!
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Old 02-10-2013, 07:51 PM
 
4,711 posts, read 10,901,514 times
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Originally Posted by Carlingtonian View Post
I'd never heard of Belhaven before, but after reading this, I thought the HOA was the arrogant party. All the couple did was post a political sign right before an election. The HOA said it was 4 inches too high and then fined them $900--with the latter not even being one of its stated powers in its charter.

I agree....that HOA went after these folks unjustly....and it has blown up in their faces.

I can't help wondering if this whole thing would have occurred if it had been a McCain sign....
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Old 02-11-2013, 09:30 AM
 
1,403 posts, read 1,853,947 times
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Quote:
Originally Posted by BMOCCC View Post
Thanks for your great explanation. As mentioned, I'm pretty sure that any new development in NOVA has to have an HOA for reasons that you mentioned, and probably more.
Again, is there a law in VA (as in NC as another poster pointed out) that requires an HOA for developments in excess of a certain number of units?
Quote:
My condo association story is as good as yours... There were defects that caused water leakage into the units.
Your story brings back memories. Back in the 90's, I purchased a condo in the Pacific Northwest. I did the usual due diligence (including reading the minutes of the HOA meetings) and the only red flag I read was some water damage in other units (NOT in the unit I purchased). After buying the unit I discovered upon attending the first HOA meeting that the water damage was much more extensive and, in fact, building-wide. As the disclosure requirement was more stringent in that state, what the seller did was illegal. The HOA was also at fault because it failed to document transparently the actual discussions of the meetings and essentially hid the true extent of the damage to the prospective buyer (which I suspect was intentional).

The president of the HOA was a friendly, but naive person, and continued to send letters to the developer to ask for the repairs. Apparently this went on for some time. At the second meeting, I suggested we begin litigation since the developer had not taken these requests seriously. After the meeting, a number of unhappy owners came to me and asked me to run against the current president mainly in order to deal with the construction defect. I agreed to do so ONLY on the condition that several of them also run with me and help me through what was to come. At the time I had a very demanding and strenuous job (usually about 70-80 hours per week) and this commitment was a serious sacrifice for me.

The overwhelming majority of the owners voted me and my conspirators in. We found an excellent small law firm that specialized in construction defect cases. This was really crucial. I generally hold a dim view of the legal profession, but these lawyers were dedicated, hard-working and truly looked out for the interests of the HOA and the owners we represented. They were mostly responsible for what happened next.

We, of course, needed money to build a case, to do tests, evaluations and to build a war chest for the litigation. So after extensive discussions, the HOA levied a sizable special assessment. A number of owners complained about it and REFUSED to pay. After personally talking to every single owner, laying out the case for litigation (again, the head lawyer assigned to the case was excellent at laying out the case), the board and I were able to get a "buy-in" from every single owner but one. We had to put a lien on the remaining holdout, so she too reluctantly, under legal duress, paid the assessment.

To cut the story short, most of the board members and I spent hundreds of hours on the case, very ably assisted by the lawyers, who went after every single party responsible in this very complicated case. And, as is typical in a case like this DISCOVERY was our friend. During discovery, our lawyers unearthed a treasure chest of goodies, including incriminating memos and e-mails. Eventually, the owners of the construction company offered to settle. While they agreed to pay nothing out of pocket, the insurance company for the LLC and their personal liability insurance companies agreed to pay an amount that would have paid our lawyers and the repair costs in full (it was substantial). There was also money offered from a number of other parties that were involved in the construction defect.

I was very happy at this prospect, but ran into resistance at the next HOA meeting. Many of the owners were angry that the developers would not suffer personally with this settlement. They felt that these men had done wrong and should suffer. I had to, again, talk to every single owner and convince each that "living well was the best revenge." The board was able to get an unanimous vote to accept the settlement in the end. The building was repaired well (our lawyers introduced us to a great architect who in turn did an excellent job for us) and near miraculously all the owners were made whole (for the past assessments to launch the litigation). I quit as the HOA president as I agreed to serve only to see this through. Some of the owners who served on the board with me and a few other owners thanked me heartily for the happy outcome and got a majority of owners to applaud as I stepped down at an HOA meeting. The woman who was the last holdout to pay the special assessment actually yelled out "good riddance!" (never mind she was able to sell the unit after all this was done at a hefty profit.)

Also somewhat amusingly, the person who sold the condo to me sent me a letter demanding a portion of my share of the settlement money. What nerve! Obviously I rejected politely and the person went away quietly, never to be heard from again (actually he was lucky I did not sue him for failing to disclose facts which affected the value of the property, a requirement in the state -- since I was made whole with the settlement I decided not to pursue that avenue).

The whole thing was a pretty harrowing, learning experience that consumed several years of my life. But I learned a lot about people, both good and bad. (You see, BMOCCC, I am actually sympathetic about your situation with your condo building, because, as Bill Clinton said, "Ah feel yah pain.")
Quote:
regulations that have practically mandated HOA's.
There is no such thing as "practically mandated." Either something is mandated or not. As I wrote before, I don't oppose a regulatory environment that is friendly to HOAs, but do oppose a government mandating HOAs.
Quote:
Originally Posted by Fern435 View Post
Why many people avoid HOAs:

Fairfax homeowners group humbled by court battle with residents - The Washington Post

Both sides were/are being incredibly arrogant. What a mess. Maybe Old Tired Man is right...
I read that piece too. It's a clear case of people (on both sides) losing their heads and destroying a community. They all needed to understand a simple lesson that took years for me to learn -- it's better to be good than right.

If both parties in that sorry story had simply understood that and did what was good rather than trying so hard to be proven right, none of this would have happened. Also, something I pushed very hard in every single HOA to which I belonged was to reduce the number of regulations BUT enforce the few rules that remained strenuously.

So far the two HOAs with which I dealt in this region have been well-run by reasonable people who represented the interests of all the owners. It is absolutely true that HOAs can be and sometimes are run by incompetents and/or petty dictators, but I suspect that for every one of those HOA boards, there are several that are run ably by conscientious people. With people, including those on HOA boards, I follow Reagan's refrain regarding the Soviets and arms control: "trust but verify."
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Old 02-11-2013, 09:53 AM
 
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Argh, I forgot to mention that the very first thing the new board and I did was to fire the existing HOA management company and hire another one after an extensive search. The new management company's owner was worth her weight in gold -- she was very experienced and gave us excellent advice, including our search for the attorney we eventually picked. She is owed a great deal of credit for how things turned out.

The board not only provided excellent referrals for both the law firm and the management company, we also sent them very nice gift baskets when the lawsuit was settled and invited all of them to the grand party we threw on our roof deck.
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Old 02-11-2013, 11:10 AM
 
2,688 posts, read 5,964,161 times
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Originally Posted by car54 View Post
I agree....that HOA went after these folks unjustly....and it has blown up in their faces.

I can't help wondering if this whole thing would have occurred if it had been a McCain sign....
I suspect it would have -- because these types of people are just power-hungry. And they drive more reasonable people off of their boards. But these particular homeowners are obstinate and selfish too. A case of the worst meeting the worst, and their neighborhood getting the worst of it.

I don't know if he's still there, since it's been several years since I talked with him, but Fairfax County had (or has?) a staff member who deals with HOAs. He would agree with you up and down and all around that your HOA was indeed in violation of the law and exceeding their authority. But when you asked what the remedy was, he would say "the courts." The only way, he said, to bring the HOA into compliance was to challenge them legally -- with, of course, you and your neighbors paying the bill. Which would discourage anyone, as it could escalate into the type of situation above.
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Old 02-11-2013, 02:02 PM
 
1,403 posts, read 1,853,947 times
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Originally Posted by Yankeesfan View Post
I suspect it would have -- because these types of people are just power-hungry. And they drive more reasonable people off of their boards. But these particular homeowners are obstinate and selfish too. A case of the worst meeting the worst, and their neighborhood getting the worst of it.
To quote Plato "if the good are unwilling to rule, they are punished by being ruled by worse men." The lesson is, buy into an HOA with eyes wide open and, as another poster recommended, participate, participate and participate.

As much as we all want it, there is no such thing as entitlement to good governance (of an HOA) -- one has to work at it (by participating and/or monitoring) like any other organization, club or association in life.
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