Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual).”     Ayn Rand

June 27, 2009

Petty Meddlers Face Jackboot

by Brad Warbiany

Homeowners’ Associations are one of life’s little sour tastes of government. Petty meddling nannies who tell you that you can’t do X, or that you must do Y, in order to keep the neighborhood “uniform” or somesuch. Sadly, it’s also a microcosm for most peoples’ reactions to government. When it’s a neighbor doing something they don’t like, they scour the by-laws for a way to run off to the HOA board of directors to get a nice little note sent to the neighbor. But when it’s their own behavior scrutinized, they think the HOA board of directors is an intolerable PITA.

So you can imagine I’m not a big fan of HOA’s, and there’s a little bit of schadenfreude in watching them get their hands slapped… But I still can’t support this (via Ezra Klein — hence calling this “good” — on Waxman-Markey):

Lots of small tweaks were added in the past day or two. And some of them were good! Rep. Dennis Cardoza, for instance, added a smart amendment to discourage neighborhood associations from prohibiting solar panels of aesthetic grounds.

So, they can tell you not to paint your door green, but they can’t stop you from filling your roof with a solar array the size of a tennis court.

I have a coworker facing this issue right now. He lives in Newport Beach, CA, and his HOA has some waterfront homes. One of his neighbors with oceanfront (cliff, not sand) is planning to put solar panels down the face of the cliff to electrically heat his pool. This, of course, is California. There are environmental laws, and the HOA doesn’t want to see this happen either. But being California, they ALREADY have laws that stop the HOA or anyone else (including the Greens) from interfering, because solar energy takes precedence. Now it sounds like this will extend nationwide.

This is one of those issues that gets thorny for libertarians. It comes down to property rights, but the question of what legitimate hindrances can be placed on the owners by HOA’s. After all, an HOA is a contract that a buyer of a house willingly enters into. But it doesn’t seem to me like an issue in which Congress has any right to intervene.

As a renter who is waiting for the complete collapse of the market before I buy a home, I know that I may be faced with a tough decision regarding my purchase based upon whether or not I’ll choose a neighborhood with an HOA, and whether the existence of an HOA is enough to dissuade me from the house we otherwise find desirable. But I know what I don’t want, and that is for Congress to be the one telling my HOA what it can or cannot do.

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8 Comments

  1. HOAs are an F’in scourge. I say that as a home owner and also a business owner who must deal with them.

    If Cali is anything like this part of SC, good luck finding a home where you are not dealing with one, basically be prepared to hold your nose, buy the house and then do battle on an annual basis.

    As far as congress getting involved, I don’t know, a couple of years ago I switched from cable to DirecTV because they offered a product I could not get through my cable provider and it was nice that the FCC had already prohibited HOAs from infringing on my right to put a dish wherever I could. It is interesting personally that this has come up. I have been contemplating incorporating some solar when we renovate, and I know for certain my HOA will get its finger in the middle of it if they can.

    IMHO, with municipalities and states looking to privatize every possible responsibility, look for HOAs over the next generation, with the growth of management companies, their lobbies and massive war chests to get a chunk of privatized crafting and enforcement of ordinances.

    I’d say ten years max before it will be impossible to find a home that is not governed by an HOA. You think taxes and government intrusion are bad, wait until you are contractually obligated to comply or forfeit your home.

    Comment by SWilliams — June 27, 2009 @ 4:13 pm
  2. SWilliams,

    Yes, but there is an advantage to an HOA over Congress. You know where the HOA folks live and see them on a regular basis. As you can well note from my posts, I’m anti-government. But if I’m going to accept a government, I’d rather have one that’s local and that I have a good chance at influencing rather than one that’s so big and far away that I don’t have any recourse.

    In addition, there is the advantage of competition. When I lived in Georgia, we had an HOA. We had a family move in who later (after being plied with a little alcohol) admitted that they only moved in after seeing that the yard they were buying was unkempt. They knew that if the HOA allowed that yard to be in the condition it was, they’d be pretty well left alone. They were actually great neighbors and did a lot of improvement to that yard, but they probably wouldn’t have done so if they had to go through a bunch of paperwork hoops to make any changes.

    I’m not going to say that HOA’s are good. But they’re less bad that central command and control based in Washington and beholden to special interests.

    Comment by Brad Warbiany — June 27, 2009 @ 9:52 pm
  3. I guess I question exactly why HOAs are necessary.

    I agree fully with the idea of less government. Doesn’t matter if it federal, state or local but there are certain areas that I don’t think “free markets” are the best solution. HOAs, particularly in single family homes where there are no communal attachments to the real property, are an infringement on property rights. Their ability to lien and foreclose with zero investment in the property gives them a power that should frighten people.

    HOAs are simply another extractor of American labor and wealth, one more toll to pay in pursuit of the American dream. They produce nothing, their value is simply a perception that they maintain value and ultimately, like insurance and finance must resort to ever increasing and harsher forms of rent extraction to maintain exponential growth and profits.

    Homes are a perfect example of how disconnected society is from the reality of our economy. Money is loaned/borrowed into existence, all the cash that we pursue through our labor to sustain our existence is loaned/borrowed. The game is rigged in that only the value of the real property in a home purchase is created, i.e. if a home is valued at $100,000 and the loan is 100% of the value, the money supply grows from $0 to $100,000 on your signature but with mark to market accounting the money supply, the amounts needed to pay you for your labor, is in negative territory because the lender has not loaned the interest or the insurance premiums into existence but they are already accounted for. Adding one more constant to the equation, HOAs, will do nothing but make life more difficult for each of us.

    Comment by SWilliams — June 28, 2009 @ 4:09 am
  4. I have lived in an HOA for 26 years and find it perfectly acceptable. I have been on Board of Directors for a cumulative term of 23 years. I have read negative remarks about HOAs and have always wondered the “why” of the comments. Based upon my experience, the answer to the “why” I am sure has to do with alleged restrictions impose upon residents. I am convinced beyond a shadow of a doubt that 85% of those that purchase an HOA project never read the CC&Rs, move in and behave as if they purchase a classic single family home without any restrictions attached and consequently behave as if the CC&Rs don’t exist. In addition they expect the HOA to fix every aspect of damage or lack of equipment function inside and outside of their units. We have simple restriction based upon our CC&Rs, “Whoever it services or controls it maintains it”. Unit improvements and expansion in violation of the CC&Rs is all part and parcel of never reading the CC&Rs

    Then there are the petty dictators on some boards that feel the power and make life miserable for the other homeowners. I have experienced this side of the HOA. Administration of the HOA is the key to a successful operation. We will work around the government laws of allowing TV dishes and solar panels all within the confines of esthetic needs.

    I am proud that my Board and Homeowners are satisfied and believe in our representative organization. We are open with our homeowners and they are satisfied.

    Comment by M. Ogman — June 28, 2009 @ 2:57 pm
  5. I will try to keep this brief and stay out of discussion on my own HOA and stick to my dealings as a builder, other than to say I did read mine prior to purchase. No where did I find mention of a fee being assessed on the sale price of my home, due at closing, nor was there an indication that the HOA planned on hiring an individual to “patrol” the neighborhood once a week and issue fines. Those changes were made after the fact and in conflict with restriction placed on the board, i.e. homeowners must be notified of the details of any such pending changes and be allowed to vote.

    In my first 15 years of dealing with HOAs it was a fairly cut and dry experience, you knew what they wanted and incorporated it into a bid, since around ‘99/’00 dealing with HOAs in my experience has gone down hill. I have been involved in horror stories where homeowners get knee deep into a project and the HOA begins to place demands driving up costs, the worst was an existing home and a simple window, door and siding replacement along with a new deck and pool. The elevation submitted to the HOA and approved by them clearly showed a retaining wall supporting one end of the deck/pool and listed the material that would be used. After installation the HOA, having just lost a legal fight with the homeowner over a demand he remove ALL existing grass and replace it with new sod, began to attack the retaining wall, ultimately he gave in and an addition 20k was spent unnecessarily to appease the HOA. Add that to the, I would assume a minimum of, 10/15 thousand he spent in legal fees battling the sod issue and there is no way he will recoup the investment. In existing homes, I have never seen the first proposal for improvements accepted by an HOA/ARB and never have their demands lead to lower costs for the homeowner or included structural changes. They are always superfluous demands on cladding, roofing, colors and landscaping, all costs that ultimately don’t lend any real value to the home, particularly with the added costs of architects, landscape architects and lawyers now needed.

    In new home construction I could go on about how developers have used HOAs as an avenue to push costs onto future home owners but this is long enough.

    I don’t doubt that you have done a very good job on your board and I have friends who are members of their boards and are shocked when I tell them of some of our dealings but if I may for one moment go back to my HOA. After the blow up over the fees and fines issue our HOA has determined they will farm out the responsibility to a property management company, something one of my friends HOAs in Indiana is looking to do as well. That is ultimately where my fear is. When a market that has no need to exist is created the costs will always outweigh the benefits and while I understand the fear that a neighbor will place a Pinto on blocks in his driveway and bring down the value of adjacent property, is that really a legitimate fear that warrants the added costs?

    Comment by SWilliams — June 29, 2009 @ 2:57 am
  6. I have always viewed the HOA’s as a voluntary association between individuals. I don’t know of anyone who has been forced to join one. They are pretty clear about their rules and restrictions, so if you don’t like them don’t join. There are some people who like living in Stepford-like communities. I for one do not, therefore I will not be joining an HOA. I would have a problem with someone being forced to join, or having the rules changed without a vote by the homeowners. As for doing work in or for an HOA, I usually decline or charge more.

    Comment by John222 — June 29, 2009 @ 5:45 am
  7. Membership in my HOA is voluntary. I live in an older neighborhood, and our HOA essentially exists in order to try to enforce the deed of restrictions, which is a recorded document applicable to every home in this development and which we are all bound by.

    In gated communities with common areas (and the attendant expenses of the costs of security, and landscaping, clubhouse and pool, etc.,) membership is not voluntary. It is like a condominium community. We have lots of these in Florida.

    Most people who buy homes in my subdivision are completely oblivious to the existence of the deed of restrictions, or “covenants.” (including us when we moved here in the early 90s). So when they use their driveway to store commercial trucks/vehciles, or put up a six foot instead of four foot fence, or install a two story kiddie playhouse fort in the back yard (a hurricane hazard) — and they get a letter from the HOA about it – some of them get all indignant and pissed off and holler and scream about their loss of freedom, private property rights, totalitarianism, etc.

    But the problem my HOA has – because membership is voluntary, only about a third of the residents bother to pay their $25 per YEAR annual dues. So the HOA has zero money available in its budget to ever hire an attorney to get an injunction to enforce the restrictions. So most of the time the letter gets ignored, and as a result, anything goes. Which is not a good thing. IMO.

    The last thing I’m ever in favor of are even MORE regulations/government meddling. HOWEVER, I have personally always wished that the Fla Real Estate Commission would enact a reg which would REQUIRE seller (or the realtor if one is used) to provide to purchasers of homes in developments like mine, a copy of the Deed of Restrictions – which must be included in the closing paperwork and which must have a form the buyer initials, acknowledging receipt of a copy.

    My colleague lives in a brand new gated community with golf courses, a clubhouse with a gym and pool, etc., and an Assn. which does all the mowing, landscaping, etc. Real convenient, but mandatory and not voluntary, and real expenive ($3000/yr)…and it is roll of the dice as to whether the board members will be reasonbale and laid back, or be dictatorial jerks (“condo commandos” we call them).

    Comment by southernjames — June 29, 2009 @ 7:03 am
  8. My experience with HOA’s is that they vary a lot, so lumping them into one category or another is hard to do. Part of it is the covenants themselves and how restrictive they are, part of it is the Association Board and how gung-ho they are. The most restrictive covenants in the world don’t matter at all if no one bothers to enforce them; on the other hand, even minor restrictions can be used by a vindictive owner to bludgeon a relatively innocent neighbor.

    Comment by SC — June 29, 2009 @ 10:15 am

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