Saturday, October 30, 2004
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| | | | PUBLISHED ON OCTOBER 28, 2004: Humble Home Association-weary homeowners team up tofight back By TIM VANDERPOOL   | | Tim Vanderpool | | Rick Happ and Mika Sadai are asking what in the HOA is going on here? | | | OK, maybe they aren't raising holy hell. But milling about the Pima County Courthouse, a band of buttoned-down, middle-aged, disgruntled homeowners sure are unleashing a little heck. Take Patrick Dougherty. Neat and tidy in a crisp blue blazer, he holds a carefully lettered sign that reads "DOES YOUR HOME BELONG TO YOU OR YOUR HOA?" The Las Vegas resident hasn't used his real estate license much lately, not since becoming a paralegal impelled to help elderly homeowners fight their homeowners associations, or HOAs. These cul-de-sac kingdoms need the boot, he says. "A high percentage of retired people are losing their homes" because they can't keep up with association fees. "And many times, association boards are just operating outside of the law." Dougherty's strong feelings drove him all the way from Vegas, along with fellow real estate agent Nancy Barr, for this Oct. 18 rally. They're here to support Mika Sadai, a multi-homeowner who might get smacked with $400,000 in fines and lawyers fees. Sadai's six-year fight with her northwest Tucson HOA over a crooked board election--a battle costing $650,000 to wage--all comes down to her 2 p.m. court slot. "It's chilling," Sadai says. "It's everything that I have, and now this gang in the homeowners association is trying to take it away." Barr agrees. Associations are only able to get away with their shenanigans, she says, "because people don't say anything; they don't get proactive. And even when they do, it's like David going up against Goliath." Backing Barr, Sadai and Dougherty is the Coalition of Homeowners for Rights and Education, or CHORE. Born in Arizona, and now reaching across the country, CHORE has become a far-flung warm-bed of reluctant activists teaming to fight the Man--in this case, homeowners associations drunk with power. CHORE has its work cut out. Promising to maintain property values and keep neighborhoods spiffy, HOAs are mushrooming across the United States. But they're also pushing many Americans across the fence-line of civility. Heavy-handed rules and arbitrary enforcement are often blamed for pitting neighbor against neighbor, and turning serene subdivisions into raucous battle zones. This is not a new phenomenon. With roots in 19th century Boston, these quasi-democratic bodies--also called residential community associations or common interest developments--now number more than 200,000. An estimated 42 million people currently live under their rules, and today, it's nearly impossible to purchase a home that doesn't come with an association attached. Typically installed by developers to govern budding villages, they provide amenities ranging from recreation centers to trash pickup. Under their tutelage, parks are established, swimming pools maintained and architectural consistency imposed, all financed by membership fees. Rules are set through deed restrictions and overseen by boards of directors comprised of neighbors and developers' representatives. Along with promoting a comforting uniformity, they also control the minutiae of daily existence for affected residents, right down to where you plop your petunia patch. All too often, say critics, that power is abused by neighbors with scores to settle. Those mandates often include big fines for tiny infractions such as planting the wrong type of shrubs, leaving a garage door open or even erecting a flagpole. Failure to pay up can mean a lien against your home, or even foreclosure. The result may be a national backlash, says Evan McKenzie, a University of Chicago researcher, and author of Privatopia: Homeowner Associations and the Rise of Residential Private Government. The book is highly critical of many association practices. Left unchecked, they "can really create little neighborhood Hitlers," McKenzie said in an earlier interview with the Tucson Weekly. Still, he's guardedly optimistic that the HOA juggernaut sees a need for change. "I think they realize that it comes down to giving these communities a chance to become communities," he says. Lawmakers are listening as well. Arizona legislators recently passed statutes preventing HOAs from seizing homes for unpaid fines, and requiring that they follow open meetings laws. Other rapidly growing Sunbelt states with a plethora of associations, such as Nevada, are following suit with crackdowns on association excesses And Texas lawmakers have tightened due-process procedures for legal actions against homeowners. Among those now also trumpeting reform is the Community Associations Institute, a Washington, D.C.-based trade group for association managers, lawyers and homeowners. Such efforts represent a shift for CAI: When McKenzie's book was published in 1994, an institute spokesperson labeled it "tabloid journalism." But on the ground, the CAI is still fighting reform every step of the way, says CHORE President Pat Haruff. To get new HOA laws through the Arizona Legislature, Haruff's group broke sweeping changes into bite-sized chunks. "Then the CAI lobbyist complained that there were too many bills," she says. "Earlier, he claimed that the combined bills were too big." By phone from Mesa, Haruff contends that associations have become battlegrounds because lawyers make windfalls. For example, if a homeowner "gets fined $100 for not cleaning his yard and refuses to pay, then the homeowners association takes him to court to collect. And by the time the court rules against the homeowner for a $100 fine, the attorney has made $8,000 to $10,000 in fees." In turn, this pattern is driven by the CAI's claims "that HOA's will go bankrupt if they refuse to go after deadbeats for fines," Haruff says. "But you know what? There has never been an association that has gone bankrupt for that reason." There's certainly no shortage of associations--or lawyers--where Rick Happ lives in New Bern, N.C. A polite electrical engineer in a beard and sensible shoes, Happ became radicalized after buying a couple of country acres with a fenced road. Soon, his HOA was demanding the gate removed. He refused, and $100,000 in legal fees later, he won in court. Now Happ has flown all the way to Tucson to support Mika Sadai. "Look at how much money this has cost her," he says, outside the courthouse. "I was lucky I was able to fight back. The average homeowner wouldn't have been able to do that." As 2 p.m. nears, Sadai is getting nervous and lights up a smoke. As it turns out, the judge won't make his decision today. But that only delays the outcome she's sweating at the moment. Nearby, a well-dressed woman holds a sign high, and pigeon-holes passers-by. "If you care about your rights," she hollers, "don't buy a home in a homeowner's association." Pausing, the woman says she's from Indiana, and won't give her name because she's under a gag order. She fought her association over organic shrubbery. "And now I'm losing my home when I go back. But I'm a Christian, and I don't think God gives you more than you can deal with." |
posted by Las Vegas at 6:37 AM
Friday, October 22, 2004
 | | | | | | | The backlash against homeowners' groups Residents nationwide are increasingly protesting their associations' fees and rules. By Mark Sappenfield | Staff writer of The Christian Science Monitor ORANGEVALE, CALIF. - When Robert Best began building a roof for his patio more than two years ago, he thought it seemed a rather modest prospect. The neighbor didn't mind, after all, and the plan was no Home & Garden channel make-over - in fact, the structure barely peeked above the garden wall. Today, however, the roof is gone - torn down at the command of his neighborhood architectural committee - and Mr. Best has only a slab of concrete and $3,000 in lawyer's fees to remember it. What started as a bit of do-it-yourself home improvement became the latest in a growing number of picket-fence protests against the power of homeowners' associations. For decades, such associations have occupied a murky niche as more than a private business but less than a local government - collecting taxlike "assessments" but subject to little public oversight. Yet as more Americans move into homes governed by associations, there are signs of a mounting revolt. Stories like Best's are but one part of the issue, as residents chafe against the authority of homeowners' associations to determine everything from the appearance of patio roofs to the politics of lawn placards. More broadly, legislators are increasingly taking the issue into statehouses, seeking not only to clarify the laws governing homeowners' associations, but also how to enforce them. "Lawmakers are being forced to deal with the problem," says Marjorie Murray, who tracks the issue for the California Alliance for Retired Americans. The pressure is clearly coming from homeowners themselves. More Americans own homes in community associations than ever before. In 1970, less than 1 percent of Americans lived in a community association. Today, the figure is nearing 20 percent, and with local governments providing incentives for new homeowners' associations - which assume some of the costs of street and landscape maintenance - the trend is likely only to escalate. Familiar spats In some respects, the disputes are the same as they have always been. In Florida, one community has banned a former marine from flying the United States flag because the pole does not conform to neighborhood standards. In Arizona, another prohibited a resident from putting a sign in his window that supported Howard Dean for president. But beyond such displays of pride or politics, there is deeper scrutiny of the rights and responsibilities of homeowners' associations themselves. Although people on both sides of the debate acknowledge that most associations are fair and neighborly, several instances have become rallying points for reform. Last month, one homeowners' association in the Bay Area required that each of its 94 members pay a $12,000 special assessment for emergency repairs, angering residents who complain they were kept in the dark during the decisionmaking process. Another California association famously foreclosed on a couple because they failed to pay $120 in assessments. "In my view, there is an imbalance of power between homeowners' associations and homeowners," says California state Rep. Darrell Steinberg (D), who sponsored a bill that would have banned foreclosures unless the resident owed more than $2,500 in assessments. "There is an unfairness in giving homeowners' associations that much authority." Although Gov. Arnold Schwarzenegger (R) vetoed the bill, it is representative of lawmakers' attempt to more sharply define the laws surrounding homeowners' associations, both here and nationwide. In Florida, for example, lawmakers passed a suite of bills this year that open associations' records to homeowners and require professional mediation before any disputes become lawsuits, among other things. Arizona passed a set of bills with similar goals, as well. "There have been many complaints to the Legislature and the government during the past couple of years," says William Sklar, who was co-chair of a Florida task force convened by Gov. Jeb Bush (R) to deal with the issue. "We found that there needed to be more accountability across the board." California's proposal The question of accountability, however, might be leading California down a more radical path. Next year, a law review commission looking at homeowners' associations is expected to make a sweeping recommendation: that the state create an agency to regulate them. It is needed, officials say, because most association disputes involve relatively small amounts of money - or ideological issues such as access to records - so homeowners aren't likely to spend thousands of dollars for a court fight. For his part, Best turned to a lawyer as a last resort. After a year-long battle with his homeowners' association about the architectural appropriateness of his patio roof, the association said Best had to pay its legal fees, which totaled more than $5,000. When they did that, "they abused their authority," he says. "At that point, I wasn't fighting over the deck.... It was more a Don Quixote-type fight." The association says it felt it was within its rights. "Our thought was that this was an enforcement act," says Charles Preston, president of Rollingwood Bluffs. Last month, however, a judge found in Best's favor. Yet Best admits that he wasn't blameless. He didn't submit the plan for the roof to the homeowners' association until after he had finished building it, and he missed a deadline when the association demanded that he tear it down, bringing a $800 fine. It's a common narrative of mutual misunderstanding, experts say. And as homeowners' associations spread into the American mainstream, homeowners, too, will have to educate themselves and share in the accountability. "The sense has always been, 'My home is my castle' - I can do what I want," says Mr. Sklar. "But the more you have close-in living, the more you have to give up some of that liberty for the common good."
from the October 14, 2004 edition - http://www.csmonitor.com/2004/1014/p01s02-ussc.html |
posted by Las Vegas at 1:19 AM
Saturday, October 16, 2004
AP: Planned communities pose threat as "financial time bombs"
JIM WASSERMAN
Associated Press
ROSEVILLE, Calif. - Jim Viele moved to Sun City Roseville in 1997 expecting to think more about golf than landscaping, drip irrigation systems and lawsuits.
But as head of his homeowners association, Viele is mired in a lawsuit with Del Webb, the nation's premier builder of privately run adult communities. The association claims the developer saddled the 5,400 residents with defective water systems that caused trees and turf to die and the golf course to become soggy.
So, Viele and other residents in this decade-old community east of Sacramento, fearing huge hikes in their $120 monthly dues or a big drain on cash reserves, sued Del Webb to fix it or pay the bill.
As developers build more planned communities, they are also turning them - and their multimillion-dollar annual budgets - over to residents and volunteers to run once the developers sell out. Often, development experts said, residents from California to Arizona to Florida learn they've inherited financial time bombs.
Cracks develop in clubhouses, tennis courts and roads. On the championship golf course that once lured buyers, grass either dies or turns soggy because of defective irrigation systems. Often, residents find the problems are due to construction defects and that the developer didn't leave enough money in the reserve funds to pay to fix them. Either the associations have to raise dues or collect one-time special assessments, often hiking living costs beyond buyers' original expectations.
With so many of these communities being built each year, often to house the pool of aging baby boomers entering retirement, situations like the one in Roseville could become commonplace across the country, experts said. As they do, some of the nation's largest builders are finding themselves the targets of lawsuits from unhappy buyers.
One of those is Stuart Diamond in Delray Beach, Fla. He leads the homeowners association at Villa Borghese, which is suing the community's developer, Ansca Homes, after they inherited a $280,000 deficit and a defective irrigation system.
"I didn't expect to be involved in a quagmire," Diamond said of the association's $1.2 million lawsuit against the developer, which has also been sued by the Ponte Vecchio West Homeowners Association in nearby Boynton Beach for the same reason.
Industry watchers said problems stem from competitive pressures and the lack of government oversight. Some builders, they say, set monthly or yearly assessments as low as possible to attract buyers while they sell the community. After the developers sell out, the low assessments that enticed buyers aren't high enough to run the place or repair swimming pools or streets when they crack.
Such "lowballing" of fees does occur, acknowledged Donna Reichle, a spokeswoman for the Washington-based National Association of Home Builders. But she said costs can rise after a builder sets the assessments and reserve funds.
"When the assessments are initially set, they reflect the price of labor and materials at that time," she said. However, the cost of building materials could "increase at a rate higher than at the time of the reserve study."
There are no statistics on how often these problems occur. But experts in association finances say they're one element in a larger phenomenon in which one-third of the nation's 260,000 associations don't have enough money for their long-range upkeep.
At Sun City Roseville, where golf cart lanes line wide boulevards and retirees from Minnesota and South Dakota host golf tournaments and card games, Viele said Del Webb left the association with enough money when it departed the community in 2004. But the community's lawsuit alleges a flip side of the lowballing issue - leaving behind defective infrastructure that could overwhelm even adequate funds with repair bills.
"The budget may have been all right, maybe, if this thing had been built the way it was supposed to be built," said Tyler Berding, the association's attorney.
Del Webb's attorneys have denied allegations of defects, and talks are aimed at resolving the issue.
Del Webb, which began creating communities for adults 55 and older in 1960 - and became the signature name in communal Sunbelt retirement living - also has attracted lawsuits alleging construction defects or inadequate reserves at Sun City MacDonald Ranch and Sun City Anthem near Las Vegas and Sun City Grand near Phoenix.
Las Vegas attorney Edward Song has sued Del Webb's parent company, Michigan-based Pulte Homes, alleging it underfunded a homeowners association that took over its 372-unit Stone Ridge condominium project in Las Vegas. Pulte's 2001 merger with Del Webb made it the nation's largest homebuilder.
Pulte strives to ensure smooth transitions, said spokeswoman Mark Marymee.
"When we transition out of communities we leave reserves fully funded," he said. "We want to leave a community with a positive feeling for both sides. That goodwill is something we definitely feel is important to us."
But Song said lawsuits may become increasingly common as more adults flock to privately governed communities that share facilities such as pools and golf courses, and as competition spurs builders to "do it quicker, faster and then get it to the market as soon as possible."
Virginia attorney David Mercer said cities that approve development projects and property management companies that run them should be more outspoken about the financial foundations developers leave for private communities, many thousands of homes.
"They've created a little city in many respects," he said.
California is one of the few states that makes developers prove adequate startup association budgets and reserve funds. But it requires only the minimum, and formulas used to set it haven't been updated since 1999 because of a state budget crisis and staff cuts. Most other states have no rules.
At Sun City Roseville, Viele said his advice to other associations soon to take over their communities is "make sure you do your due diligence."
In Delray Beach, Diamond said a new community with pools, golf courses and clubhouse may look like a bargain to buyers with dues of $155 a month, "but the bargain is you end up picking up the difference once the developer leaves."
posted by Las Vegas at 11:22 AM
Wednesday, October 13, 2004
The backlash against homeowners' groups Residents nationwide are increasingly protesting their associations' fees and rules. By Mark Sappenfield | Staff writer of The Christian Science Monitor ORANGEVALE, CALIF. - When Robert Best began building a roof for his patio more than two years ago, he thought it seemed a rather modest prospect. The neighbor didn't mind, after all, and the plan was no Home & Garden channel make-over - in fact, the structure barely peeked above the garden wall. Today, however, the roof is gone - torn down at the command of his neighborhood architectural committee - and Mr. Best has only a slab of concrete and $3,000 in lawyer's fees to remember it. What started as a bit of do-it-yourself home improvement became the latest in a growing number of picket-fence protests against the power of homeowners' associations. For decades, such associations have occupied a murky niche as more than a private business but less than a local government - collecting taxlike "assessments" but subject to little public oversight. Yet as more Americans move into homes governed by associations, there are signs of a mounting revolt. Stories like Best's are but one part of the issue, as residents chafe against the authority of homeowners' associations to determine everything from the appearance of patio roofs to the politics of lawn placards. More broadly, legislators are increasingly taking the issue into statehouses, seeking not only to clarify the laws governing homeowners' associations, but also how to enforce them. "Lawmakers are being forced to deal with the problem," says Marjorie Murray, who tracks the issue for the California Alliance for Retired Americans. The pressure is clearly coming from homeowners themselves. More Americans own homes in community associations than ever before. In 1970, less than 1 percent of Americans lived in a community association. Today, the figure is nearing 20 percent, and with local governments providing incentives for new homeowners' associations - which assume some of the costs of street and landscape maintenance - the trend is likely only to escalate. Familiar spats In some respects, the disputes are the same as they have always been. In Florida, one community has banned a former marine from flying the United States flag because the pole does not conform to neighborhood standards. In Arizona, another prohibited a resident from putting a sign in his window that supported Howard Dean for president. But beyond such displays of pride or politics, there is deeper scrutiny of the rights and responsibilities of homeowners' associations themselves. Although people on both sides of the debate acknowledge that most associations are fair and neighborly, several instances have become rallying points for reform. Last month, one homeowners' association in the Bay Area required that each of its 94 members pay a $12,000 special assessment for emergency repairs, angering residents who complain they were kept in the dark during the decisionmaking process. Another California association famously foreclosed on a couple because they failed to pay $120 in assessments. "In my view, there is an imbalance of power between homeowners' associations and homeowners," says California state Rep. Darrell Steinberg (D), who sponsored a bill that would have banned foreclosures unless the resident owed more than $2,500 in assessments. "There is an unfairness in giving homeowners' associations that much authority." Although Gov. Arnold Schwarzenegger (R) vetoed the bill, it is representative of lawmakers' attempt to more sharply define the laws surrounding homeowners' associations, both here and nationwide. In Florida, for example, lawmakers passed a suite of bills this year that open associations' records to homeowners and require professional mediation before any disputes become lawsuits, among other things. Arizona passed a set of bills with similar goals, as well. "There have been many complaints to the Legislature and the government during the past couple of years," says William Sklar, who was co-chair of a Florida task force convened by Gov. Jeb Bush (R) to deal with the issue. "We found that there needed to be more accountability across the board." California's proposal The question of accountability, however, might be leading California down a more radical path. Next year, a law review commission looking at homeowners' associations is expected to make a sweeping recommendation: that the state create an agency to regulate them. It is needed, officials say, because most association disputes involve relatively small amounts of money - or ideological issues such as access to records - so homeowners aren't likely to spend thousands of dollars for a court fight. For his part, Best turned to a lawyer as a last resort. After a year-long battle with his homeowners' association about the architectural appropriateness of his patio roof, the association said Best had to pay its legal fees, which totaled more than $5,000. When they did that, "they abused their authority," he says. "At that point, I wasn't fighting over the deck.... It was more a Don Quixote-type fight." The association says it felt it was within its rights. "Our thought was that this was an enforcement act," says Charles Preston, president of Rollingwood Bluffs. Last month, however, a judge found in Best's favor. Yet Best admits that he wasn't blameless. He didn't submit the plan for the roof to the homeowners' association until after he had finished building it, and he missed a deadline when the association demanded that he tear it down, bringing a $800 fine. It's a common narrative of mutual misunderstanding, experts say. And as homeowners' associations spread into the American mainstream, homeowners, too, will have to educate themselves and share in the accountability. "The sense has always been, 'My home is my castle' - I can do what I want," says Mr. Sklar. "But the more you have close-in living, the more you have to give up some of that liberty for the common good."
from the October 14, 2004 edition - http://www.csmonitor.com/2004/1014/p01s02-ussc.html
posted by Las Vegas at 3:48 PM
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