It seems like a week does not go by without a negative newspaper article or negative broadcast news story about a homeowner association somewhere. The story usually has an emotional narrative and most of the time appears decidedly one sided against the homeowner association or the HOA’s board. The most common theme of these stories are that the HOA boards are out-of-control and are taking advantage of the membership. It is never pointed out that the HOA is controlled by the membership and the membership elects the board of directors. But facts such as these do not lend themselves to supporting the overall premise of the story.
It goes without saying that these negative stories are detrimental to HOAs as a whole, because they can result in a negative opinion of associations by the public while overlooking the countless benefits. These negative stories and public sentiment can lead to ill conceived legislation that may fail to resolve any issues, but makes the administration of a HOA more difficult and costly. If nothing else, negative perceptions hurt property values.
Why this should concern every HOA board of director and every HOA member is that, with enough negative attention from the media, politicians become involved with wanting to correct these “injustices” by passing legislation that constrain HOAs from operating effectively and efficiently. Every time in recent memory, when legislation has been enacted, the primary result has been to increase operational costs for HOAs. These politicians many times have never lived within a HOA and do not have a vested interest in an HOA. Without any of these experiences, they do not have a good understanding of how a HOA operates and many times never see the unintended consequences of their legislation.
For example, in the recent past, there was a legislator in a state General Assembly who wanted to propose legislation that would limit collection authority on a member for non-payment of assessments. During discussions with this particular legislator, they revealed that they had never lived within a HOA and basically did not know why a HOA needed to collect assessments in the first place. After a brief discussion with this legislator about common expenses and operational budget requirements, they still felt that legal collections were just too extreme and other remedies needed to be utilized. Unfortunately, this legislator did not have any suggestions on what those other remedies could be. When it was pointed out to them that the paying members would have to pay more to offset those who could not be collected from, the legislator did indicate that was a viable approach that they did not have a problem with. Fortunately, by the dedicated efforts of our client boards of directors and other interested parties lobbying other legislators, this legislation did not gain any traction.
The reality is no matter what the media reports, it is imperative to keep everything in perspective. Perspective being that in the United States 62.3 million Americans live within a HOA or other planned community, which means that almost 1 in 5 Americans lives under the governance of a planned community. A great gauge of these so called problems is a Zogby survey taken in 2012 that discovered that 92 Percent of residents said they are satisfied (70 percent) or neutral (22 percent) when association members are asked about their HOA experience. Just 8 percent expressed dissatisfaction with living within a HOA.
Again, the real problem HOAs have is not the reality, but the perception. The media or politicians will many times focus on one extreme situation with one individual member and not factor in that the vast majority of people who live in a HOA are perfectly satisfied with how they function. A great example was a meeting with a legislator who produced a three-ring binder and stated the binder “was full of complaints” against HOAs and something needed to be done immediately to rectify this vast problem. Upon examination, the binder contained 11 complaints/issues going back over five years. Considering that in North Carolina and South Carolina there are an estimated 25,000 associations, 11 complaints puts everything in perspective. Interestingly, all but two of the 11 complainants dealt with architectural issues. While architectural matters can be a pressing issue within a HOA, it is doubtful that lawmakers understand the complexity of the issue and hopefully do not feel a need to weigh in on what type of bush can be planted in front of someone’s home.
Changing the perception begins with communicating effectively and getting the facts out to the media and politicians. There are two primary misconceptions that, if countered, will address the majority of what is used to attack associations. The first misconception being that associations are undemocratic and the second misconception being HOA boards are petty in dealing with the membership violations.
The charge that a HOA is undemocratic is unfounded. Quite to the contrary, HOAs are the most democratic institution in most every state. Boards of directors when under membership control are directly elected to their positions by the members at duly held annual meetings. And if problems arise, almost all association governing documents specify how to remove association board members and entire boards. Many state statutes have provisions allowing for the removal of board members. For example, in North Carolina, state statutes allow for as little as 10% of the membership to call a special meeting and recall the entire board with 10 days notice. Interestingly and ironically, elected state and local politicians in North Carolina and South Carolina are not subject to recalls like most HOA boards.
The second misconception is HOAs are petty in dealing with the membership regarding covenant enforcement. Many times in a news story, a covenant violation will be made to look minor in nature without the entire background being given or the reasoning behind the board’s enforcement. A great example is if a member is changing their car’s oil in the driveway. This may not seem like a big deal, but it is important to point out that the real concern is where does this maintenance end: rotating tires, brakes, replacing the transmission. Uniform and reasonable enforcement heads off issues before these issues become major problems.
In conclusion, the media and politicians need to understand that every reasonable and legal effort was made to seek conformity of the member. No one wins when issues escalate, the member loses and the HOA loses. The goal of a HOA board should always be to be viewed as extremely reasonable or, as one of our long term board members says, “fanatically reasonable” with regard to dealing with the membership.
Copyright – William Douglas Management, Inc. 2017