By Deborah Goonan, Independent American Communities
It’s official. Homeowners Associations have run amuck, deep in America’s Heartland. Two recent investigative reports of HOA nightmares hail from Carmel and Noblesville, Indiana.
And, oddly enough, it appears both HOAs work with the same law firm, Thrasher Buschmann & Voelkel.
Kara Kenney of RTV-6 reports that 970,000 Hoosiers live in HOA-governed housing. And those HOAs have filed 3,645 lawsuits in the past 18 months alone.
RTV also reports that a “handful of lawfirms” sued HOAs homeowners when they fell behind in their HOA assessments and fees, or when they violated HOA covenants, restrictions, and rules.
Costly HOA lawsuit
One report highlights Jenn Kampmeier. She made the mistake of parking her work vehicle — a wine and beer van for her mobile event catering business — in her home’s driveway on a few occasions.
But Covenants, Conditions, and Restrictions (CC&Rs) at Lakes at Hayden Run prohibit parking commercial vehicles in the community.
So Kampmeier got a violation letter, informing her she needed to remove the van from her property, and cease doing business out of her home. The homeowner says that she promptly removed the van, and that she has never conducted business at her home.
Even after she complied with the rules, she say her HOA sued anyway. And then the HOA won in court. Now Kampmeier is on the hook for $45,000, the amount of her fine, plus attorney fees — the HOA’s as well as her own.
It can happen to anyone
Most HOAs in the U.S. enforce similar onerous rules. It’s very common for the CC&Rs to limit your property to “single-family” and “residential” uses. And to help ensure compliance, most CC&Rs also don’t allow a resident to park certain types of vehicles in the driveway or on the streets within a subdivision.
As explained previously on IAC, HOAs routinely enforce and enact rules that make it difficult, if not impossible to be a business owner, or even a skilled contractor working for a local employer.
If you own or use an otherwise ordinary sedan, van, or pickup truck, but it has a company logo, or it’s used to haul tools or equipment, look out! There’s a good chance your HOA will insist that you either hide the ‘unsightly’ vehicle in your garage at all times, or — preferably — park it somewhere outside of your community.
It doesn’t seem to matter to your HOA, and some of your uppity neighbors, that the vehicle you drive is absolutely necessary for you to earn the money to pay your mortgage, taxes, and HOA fees.
I hear reports from some homeowners that their HOA can be absolutely militant about rule enforcement. Some even stake out your house day and night to catch you violating HOA parking restrictions, even if it’s just for a few minutes or a few hours.
If you live in HOA-ville, you might be forced to find a place outside the neighborhood to park your vehicle overnight.
Sometimes that means paying for a parking space, then walking a quarter of a mile to and from your house, at least twice a day. Sometimes it means leaving the work vehicle at your place of employment or your business, then using alternate transportation to get you to and from work every day.
What a royal pain in the rear. Not to mention the added expense.
No mercy from your HOA?
It’s understandable that, once in a while, a homeowner might need to bring the work vehicle home every now and then, if only to load or unload cargo.
But if your HOA is hell-bent on strict enforcement of rules and collection of fines, don’t expect any mercy.
After all, there’s plenty of power to be abused, and lots of money to be made.
It’s all so unfair, you say. So unjust!
But, as Kampmeier has learned, if you decide to not pay the fines, and fight your HOA, don’t expect an easy win in court.
Unfortunately, state laws give the legal advantage to your HOA, not to housing consumers. A judge will almost always decide that “you agreed” to abide by HOA rules when you bought or leased your home. Even crazy rules.
Forget to pay your HOA dues? You’ll risk lien and foreclosure
Terry McMillen, who lives in North Harbour of Noblesville, Is on the verge of losing his home to HOA foreclosure over a single missed assessment payment of $150.
That $150 payment, with interest, late fees, and HOA attorney fees, grew to at least $700. McMillen tells RTV-6 that, when he found out about the $700 lien this February, he paid his HOA.
He hopes that will take care of the lien and stop the Association from moving ahead with a foreclosure.
Kara Kenney interviewed Fishers attorney Pete Kovacs, who represents homeowners in disputes with their HOA. Kovacs told Kenney that HOAs have ‘huge’ powers to make your life ‘miserable.’
Well, this is old news to homeowner advocates and readers of IAC.
But maybe there’s still a few folks in America who don’t know just how far their HOA can go to collect $150 in unpaid assessments.
Why can’t we talk?
In both Indiana HOA-governed communities, the homeowners say that no one from the Association ever bothered to talk to them face-to-face.
Instead, their HOAs communicated in writing, with terse letters from management agents, and legal notices from HOA attorneys. It’s a hostile form of communication that’s bound to put a homeowner on the defensive, and more likely to provoke an angry response.
But, if you listen to Stephen Buschmann, the HOA-industry attorney interviewed by RTV-6, lawsuits are a ‘last resort’ when homeowners just won’t obey the rules. HOAs don’t really want to take away homes in foreclosure. They just want people to pay their fair share.
It’s all sounds so contrite, until you peel back the onion and see just how frequently his law firm sues homeowners. (Thousands of lawsuits in the past year and a half, remember?)
It makes many homeowner advocates wonder if HOA attorneys are truly interested in resolving collection and covenant disputes in a neighborly manner.
Trade group spouts its usual talking points
It seems like every single mainstream media report on HOA abuse ends with the obligatory advice: Read the CC&Rs before you move in; get involved in HOA elections and consider serving on the board yourself; get HOA approval before making changes to your home; pay your HOA in full and on time; don’t ignore violation or warning letters.
Blah, blah, blah.
The truth is, the CC&Rs can be vague and subject to interpretation. The rules are often selectively enforced, and subject to change after you move in.
HOA elections are easily rigged, and if the developer controls the HOA, there are no elections at all. Not only that, but entrenched board members commonly force dissenting board members to resign soon after their election.
And — shocking as it is — HOAs don’t always keep accurate records of your account.
In other words, it’s not so simple for homeowners to avoid HOA traps.
Consider the source
Finally, let’s take Buschmann’s public statements with a grain of salt, shall we? After all, he serves as a lobbyist for Community Associations Institute’s Indiana Legislative Action Committee.
For the past couple of decades, across the U.S., CAI’s LACs have crafted and lobbied for state laws giving HOAs the power to impose monetary fines and to collect HOA liens through foreclosure.
There’s no denying that, over the past few decades, HOA attorneys have made millions of dollars in legal fees fighting against homeowners, they claim, on behalf of HOAs.
What the trade group won’t tell you is that HOA attorneys routinely collect anywhere from three to ten times the amount of unpaid HOA dues or fines in legal fees.
Whose interest is really being served?
Likewise, CAI consistently opposes regulation of the HOA industry, and lobbies against bills that offer protections for housing consumers.
No simple solutions to HOA dysfunction
Don’t get me wrong. I do appreciate the fact that more reporters are taking on the HOA beast.
It’s high time.
However, the abusive nature of HOA disputes can’t be fully captured or understood in 3-minute or 5-minute sound bites. The problems that underly these disputes run deep.
Indeed, the entire socio-economic structure of common interest housing, and its prominent HOA form of governance, is flawed to the core. Therefore, simple solutions provided by the HOA “experts” from industry trade groups will never be effective.
The solution lies in gradually removing the oppressive fourth layer of government — the HOA.
With its collective ownership scheme, the HOA undermines private property rights by putting a small group of people in charge of everyone else. Typically, excessive HOA power and control pits neighbor against neighbor.
That, in turn, leads to outrageously bitter and expensive HOA lawsuits, and homeowners getting kicked to the curb over a few hundred dollars owed to the HOA. ♦
