High Marks Given to Homeowners Associations

Article Courtesy of AOL NEWS By Broderick Perkins Published March 19, 2010

COMMENT Jan Bergemann

Joseph Prudente, 66, of Bayonet, Fla., was jailed after his adjustable-rate mortgage reset and forced him to make what he thought was a no-brainer of a decision: pay the extra $600 a month and replant the lawn later.

But that prompted his homeowners association (HOA) to bring charges against him, ultimately landing him in the slammer until neighbors banded together and bailed him out with cash for new landscaping.

Never promised a rose garden of the size he wanted, Jeffrey DeMarco, formerly of Rancho Santa Fe, Calif., lost his home when he planted too many bushes and re-graded the four-acre property in violation of his homeowners association's rules.

In addition to foreclosure, he got stuck with the association's legal fees: $70,000.

Homeowners association rule enforcement can be so notorious it was once lampooned by an episode of the old "X-Files" television series. The episode's HOA president conjured up a Tibetan monster to eat association residents who didn't toe the line.

HOA rules can really bite, so how is it that the vast majority of the 60 million people who live in the nation's 350,000 HOA communities are happy with their lifestyle?

"Conflict and dissension make headlines, and that's what many Americans read in newspapers and see on television about community associations," Thomas M. Skiba, CEO of Community Associations Institute (CAI), said in a statement. "But when you ask residents themselves, the news is largely positive. While there are serious issues in some communities, this research affirms that vast majority of homeowner board members and professional managers are doing good work for the community associations they serve."

Home Sweet HOA

Only 12 percent of community association residents expressed some level of discontent with their communities, according to recently released research commissioned by CAI.

The vast majority, 71 percent, said they are satisfied with HOA life, and 17 percent said they were neither satisfied nor dissatisfied with their communities.

Buying a home in an HOA community is a lot like buying a share in a closely held, publicly traded real estate holding company governed by an ever-changing regulatory system and managed by volunteers -- your neighbors.

The associations are typically self-governed communities managed by a board of directors (typically residents who volunteer), with the help of a management company. Together they oversee finances, maintenance, day-to-day operations, the by-laws and the rules. Those rules typically address issues such as architectural guidelines, common area use, pets and parking.

Homeowners associations have seen their share of shoddy construction leading to nasty building defect litigation as well as poor management and disgruntled residents, but most residents are quite satisfied with how they operate.

Nearly 90 percent of residents say board members either "absolutely" or "for the most part" work to serve the communities' best interests. Only 7 percent expressed displeasure with their boards. An estimated 2 million homeowner volunteers serve on the boards that govern associations.

The communities range from townhomes and cooperatives to high-rise condominiums and city-size master-planned associations. Most residents have heard the horror stories about HOA living but don't choose to participate without careful consideration.

The type of housing often is relatively more affordable than a single-family detached property and, most residents believe, the rules benefit home values.

Zogby's telephone survey for CAI conducted in December found that 70 percent of HOA residents surveyed said the rules "protect and enhance" property values. Only 2 percent said the opposite and 27 percent said the rules have no impact.

Other findings include:

• Eighty-two percent said they get a "good" or "great" return on their association assessments or dues. In addition to a mortgage, HOA residents typically pay a monthly assessment to fund the association's operations and services, including landscaping, maintenance, garbage pickup, snow removal, street lighting, pools, club houses, tennis courts, playgrounds and association-sponsored social functions.
• Seventy-six percent say management companies provide value and support to residents and the association at large.
• Residents say the best aspects of HOA living are neighborhood attractiveness (23 percent), less maintenance for individual homeowners (22 percent), community safety (13 percent) and property values (11 percent).
• When asked about the worst aspects, 37 percent of residents said there were none. Fourteen percent mentioned restrictions on exterior improvements, followed by dealing with neighbors (12 percent) and paying assessments (10 percent).

Previous studies have revealed similar findings.

"Americans have weathered difficult times, and that would normally create more negative views toward most institutions," Lincoln Hobbs, a member of CAI's College of Community Association Lawyers and president of CAI's affiliate Foundation for Community Association Research, said in a statement. "That hasn't happened in the case of community associations. That says a lot about the dedication and skill of the vast majority of homeowner volunteers and professionals who govern and manage these communities."