Homeowners Associations

Most developments in which we buy or have bought homes are inflicted with a homeowners association, of which there are two types: voluntary and involuntary. Wikipedia defines the second type, in regards to which I have some things to say, thus:

“A legal entity created by a real estate developer for the purpose of developing, managing and selling a community of homes. It is given the authority to enforce the covenants, conditions, and restrictions (CC&Rs) and to manage the common amenities of the development. It allows the developer to end his responsibility over the community, typically by transferring ownership of the association to the homeowners after selling off a predetermined number of lots.”

I hate the very idea of a “homeowners association.” I think of them as leaches in a community. HOAs (or Community Associations) are extra-legal quasi-governments which have the right to tax their members and tell other homeowners what they can and (more readily) what they cannot do with or to their own property.

When I was a youth in Decatur, Georgia, I read an article in Life magazine about the owners of a home in or near Arlington, Virginia. These people, who obviously had money, had built their home with concrete. They’d hired an award-winning architect who provided them an award-winning design. For the time, their home was as energy-efficient as they came, back then. The interior shots (Life magazine was known for its photo-essays, and I ate them up!) were wonderful.

As I remember this story, the neighbors of this family sued them because their home was so “out of line” with the other houses in the area. I don’t recall the complaint being that the new house adversely affected the neighbors’ property values, just that it was so, well, different.

The neighbors or neighborhood association won, and the owners had to have their home torn down.

Fast-forward to 1992 or 1993, and move a little bit over to McLean or Great Falls, Virginia. This was during the recession that President G.H.W. Bush said wasn’t happening, when property values in the Washington DC metro area plummeted by 10% or so. The Gulf War had come to a rapid and successful conclusion, the Wall had come down, and the Soviet Union and Warsaw Pact were no more. Congress, the President, and the People demanded The Peace Dividend in return for all the years of fiscal austerity (!) through which we’d suffered in order to Win The Cold War.

The Peace Dividend resulted in the loss of many, many jobs. (The Armed Services actually RIF-ed enlisted members, the Navy paid petty offices and Chiefs severance pay for the first, and only, time.) Anyway, a rather well-off fellow in McLean or Great Falls lost his job (Reduction In Force) and had to sell his family’s home. The house was on the market for months, perhaps a year (I don’t remember exactly), but they had no buyer. So, they reduced the asking price.

Yup, you guessed it: the neighbors sued him for trying to lower the value of their own properties. So, he was out of work, out of an income, having a hard time with his mortgage, and then he faced legal fees! Good neighbors are hard to find.

I have a couple of reasons for highlighting these stories. The first is, that busy-bodies who think they have some rights over you and your property are not new to our American Experience. The second? That there are people out there, perhaps in your neighborhood, who insist that they have some claim to you and your property.

Developers set up homeowner corporations (usually as limited liability corporations, or LLCs) before a house is built. Since, in the Commonwealth of Virginia, such an association must have a board of three members, the initial HOA board may be comprised of the developer, the developer’s lawyer, and another investor. Under law, the developer does not have to turn over control of the HOA and its board to the general population of homeowners until over 75% of the lots in the development have been sold. And, that board can meet any time it wishes, anywhere it wishes. They only have to have a public meeting (public=all homeowners) once a year, an event known as the General Meeting. The board can add to or modify the Bylaws and Covenants anytime it wishes; only a quorum of the three-member board is required to validate any proposals to modify the Bylaws or Covenants.

It’s not for nothing that those are known as “Restrictive Covenants.” The covenants restrict you from doing things with and to your property. Once, there was serious discussion about requiring homeowners in my neighborhood to ask permission before planting anything in their yards. Why? Because someone might, just might, plant a hedge that, in years, obstruct drivers’ view of cars backing out onto the street. Oh, and a neighbor might not be able to sell his property because the potential buyers don’t like what’s in a neighbor’s yard. In other words, planting plants might lower property values. The restrictions in these covenants amount to no more than prior restraint.


You might point out that I could refrain from buying in a development with a homeowner association.

Sadly, that’s easier said than done these days.

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