The Old "HOA Out Of Control" Story

Discussion in 'Politics' started by pspr, Feb 10, 2013.

  1. pspr


    I witnessed something similar with our HOA in Florida as our HOA and it's attorney were ready to go to court over a shed denial that came a day too late. Fortunately, us residents stepped in and made the HOA stand down before it got really expensive for the HOA (and us) and pitted neighbor against neighbor.

    The feud that consumed Fairfax County’s Olde Belhaven would span four years and cost the community as much as $400,000, and it was ignited by one of the smallest of sparks: an Obama for President sign.

    The modest placard Sam and Maria Farran planted in their yard during the 2008 election put them on a collision course with the neighborhood homeowners association. It was four inches taller than the association’s covenants allowed.

    “Need I say more! This would lead to chaos,” a neighbor fretted in an e-mail about the precedent that would be set if the sign wasn’t removed. “Our property values would be put at risk.”

    Such HOA disputes are as suburban as cul-de-sacs and two-car garages, but few metastasize into legal battles that spend years in the courts, break legal ground and bankrupt the HOA.

    Most damaging of all, though, was a move probably unprecedented in area neighborhood feuds: The common area that is the literal and metaphoric heart of Olde Belhaven was put up for sale last year to settle its debts. It appeared that “the square,” as some called the neighborhood, would no longer have a square.

    “It destroyed our community,” Maria Farran said.

    The battle lines in Olde Belhaven were starkly drawn. On one side, the Farrans said they were standing up to an HOA run amok. On the other, HOA supporters saw a couple that inflicted financial ruin on the association — and their neighbors — to make a point.

    Experts say such feuds are becoming more common with the tremendous growth of HOAs, which typically require residents to sign covenants governing architecture, landscaping and other matters when they move into an association neighborhood. The HOAs collect dues and often have the power to fine residents who don’t comply with the covenants.

    There were 10,000 association-governed communities in the United States in 1970, and by 2012 the number had reached 324,000, according to the Community Association Institute. One in five Americans lives in a neighborhood governed by an association.

    “Their growth means there are a lot of people in HOAs who haven’t necessarily bought into the lifestyle,” said Evan McKenzie, a University of Illinois professor who has written two books on HOAs. “Some like the higher level of rulemaking, but others don’t like the fines and control. You have conflict when these groups come together.”

    One community, two camps

    Sam and Maria Farran, a wine broker and a government lawyer, moved to the 44-unit townhouse community in the Alexandria section of Fairfax in 1999. In many ways, it is a typical Northern Virginia neighborhood, with tidy houses and a mix of government employees, service members and professionals.

    The townhouses line the three-quarter-acre square, which is the neighborhood’s central feature and the site of most community-wide events. Without the green plot, it might be difficult to call Belhaven a community.

    The Farrans said the HOA had a reputation for hard-line stances. In one case, board member Don Hughes compared some residents’ refusal to install window-pane dividers to the “cat and mouse game Saddam Hussein played with the USA,” e-mails show. Ultimately, Hussein “paid the price,” he said, concluding that the residents should comply.

    Nevertheless, the Farrans were surprised when letters arrived in October 2008 telling them and others that their political placards were too large.

    “This is our final request,” Hughes wrote on behalf of the board.

    E-mails show that Hughes pushed the board to act. He wrote that he was prepared to make a motion to put a lien on the Farrans’ house if they didn’t comply. He called sending a letter a “teaching moment.” Hughes declined to comment.

    The Farrans were angry. They acknowledged that the sign broke the rules but said it seemed like an assault on free speech to go after a minor violation during the height of an election. Their response: cutting the placard in half. They planted “OBA” and “MA” signs in their front yard.

    The prank did not amuse board members. And they decided to act.

    They passed a resolution allowing the board to fine residents up to $900 per infraction for violating HOA guidelines. Across the country, fining authority has been controversial, with HOAs hitting residents with levies for such transgressions as displays of colored Christmas lights and patches of dead grass.

    Board members believed that they had the right under Virginia law, but the Farrans saw an illegal power grab that had no basis in the HOA’s covenants. When the board, acting at a meeting that was not publicly announced, rejected the Farrans’ roof and deck projects for aesthetic and architectural reasons, the Farrans said it was retribution.

    “It’s like we weren’t living in America,” Maria Farran said. “You are always one board election away from a tyranny. They wield enormous power.”

    The Farrans filed a lawsuit against the HOA saying it didn’t have the authority to impose fines and had vindictively rejected their home improvements.

    Board members were taken aback. They saw residents who wouldn’t abide by the rules that had made Olde Belhaven a great neighborhood and who were willing to resort to drastic action to get what they wanted.

    Archie Umphlett, one of the neighborhood’s oldest residents, put it this way: “When it comes to the Farrans, it’s their way or the highway.”

    A costly conflict

    The legal fight consumed Olde Belhaven.

    The Farrans said HOA backers told them to move. They found bullets in their yard. Someone implored a priest at their church to prevail on the Farrans to stop the lawsuit. A local real estate agent said the infighting was scaring off some home buyers.

    “It was a crusade,” a supporter of the Farrans said.

    On the other side, board members said that the Farrans were unreasonable and that they declined numerous offers to begin settlement discussions. And as the case ground on, the HOA increased dues from $650 a year to about $3,500, mostly to cover legal fees.

    The board’s former president, Jim LeBlanc, said the situation put a strain on some elderly residents living on fixed incomes. “Some had their health impacted,” LeBlanc said. “There’s a sense of, what is it going to take to resolve this? This was a tragic nightmare.”

    The Farrans said that they, too, had made attempts to settle matters but that those overtures were rejected by the HOA.

    In 2010, a county judge sided with the Farrans on the fining issue. The case set a Virginia precedent that HOAs cannot claim powers, such as fining, that are not specifically laid out in their covenants.

    The roof and deck issues, which had been spun off into a separate lawsuit, were decided in 2011. Another county judge ruled that the board’s votes to reject the home improvements were improper because they came at a “secret” meeting and followed arbitrary standards.

    The HOA was on the hook for about $100,000 to cover the Farrans’ legal fees, and it owed hundreds of thousands more for its own legal expenses. The HOA was financially ruined.

    LeBlanc said the association didn’t have the money to cover the bills, so residents voted for bankruptcy.

    Late last year, a court-appointed bankruptcy trustee put the community square up for sale to cover the HOA’s debts. The pleasant square, with its trees and benches, had in better times been the site of community picnics and Christmas festivities. Now it was a reminder of the community’s plight. A red-and-white “For Sale” sign drove home the point.

    A developer began negotiations to buy the plot but pulled out. The developer had received anonymous threats. Then, a former board president stepped in and put up a gift of $60,000 to facilitate a settlement.

    A judge approved the plan, but the Farrans filed a motion Friday opposing the settlement because it relied, in part, on the use of capital funds. What will become of the square remains an open question.

    But the damage was done. Large gatherings on the square have all but ceased, LeBlanc said. For now, individual residents are paying out of pocket for the plot’s water, electricity and maintenance.

    The Farrans have built their deck and their new roof. And Olde Belhaven is set to begin discussing what form the HOA will take as it emerges from bankruptcy. LeBlanc hopes the wounds will heal in time.

    “There really, truly was a sense of community here,” LeBlanc said. “That was truly lost in this process.”
  2. This HOA got exactly what it deserved.

    There have been multiple court decisions that state HOAs and local governments do not have the right of regulate the size, number, or color of political signs. This has been held up in over 100 court decisions including one involving the town where I live. HOAs and towns can regulate non-political signs; but regulating political signs is a clear infringement on free speech.

    Obviously not approving the couples architecture plans in a secret meeting is retaliatory.

    This HOA desperately deserved the bankruptcy they achieved.
  3. 377OHMS


    I'm not sure I would ever live in a development that has a HOA again in my life.

    When I was in school my parents let me live in a condo they had in the Bunker Hill Towers complex in uptown Los Angeles. It was a nice place with a great view across the street from the Music Center and the new Disney Theater. It was not in the two towers but the 4 story annex building around the base of the towers. Back then the condo was only worth about $100k, not like the million dollar condos you find in NYC. My parents were living down in Huntington Harbor so they were happy for me to use the condo while I was in school.

    While I was living there a large structural defect in the construction of the building was discovered. They literally had to shore up part of the building with huge timbers placed in the parking garage to bolster the building above. The condo associating said that it needed to sue the construction company so they added a $400.00 per month special assessment to the monthly association fee to cover legal fees.

    When the lawsuit was settled all of us expected the $400.00 per month fee to be recinded but instead the condo association just keep charging the additional $400.00 per month special assessment saying that the association needed the money to pay additional insurance premiums on the building because of the retrofit construction to repair the defect. It sounded like total bullshit so the condo owners forced the association to conduct a vote among the condo owners. My dad wrote a letter that I distributed to the condo owners to try to lobby them to remove the $400.00 fee and vote out the association board. We won but the association board sued the condo owners and then tried to charge all of us for their legal fees saying that we were responsible for any legal fees incurred by the association. It was a huge mess and I told myself I would never own where there was a HOA. I graduated and my folks sold the condo.

    My mom has a house in Palm Springs that is in a development of homes circling a large green common area with a pool and tennis courts. Over the years the homes appreciated and more affluent people began to buy the homes and move in. The newer rich people constantly wanted new amenities like new pool furniture, new landscaping, an upgrade to the pool house etc and so there was a non-stop string of special assessments that the home owners had to pay. By then my mom was on a fixed income and was having to pay $20k here and $10k there and there was always something new that the association wanted to buy. Some of her friends were effectively forced out of the development by all of the special assessments. Apparently it is a common occurrence with rich folks pushing not-so-rich folks out of developments by continuously forcing special assessment onto the homeowners.
  4. I really find it distasteful to support an obama loon.

    But hell the hoa was making it up as they went along.

    I wouldn't even have supported the HOA if it had been spelled out beforehand in the rules and the right to fine a certain amount.

    When negotiating to buy my house I forgot to ask if there was a HOA.

    Upon closing I remembered to ask and was fully prepared to walk away if there was one.
    lucky for both of us there isn't one.