Are HOA like taxes and the government?

[Howard_Roark]

I'm wondering what other libertarians think of HOA fees. I absolutley despise them and view them almost as an additional level of government, as if federal, state and local isn't enough we now need a subdivision level of governence. Like the government, it rests on the notion you need to heavily regulate everything and tell them what they can and can't do with there own property. It's also very orwellian to see a pencil pushing HOA person walking around subdivisions writing people tickets for weeds etc. People say its voluntary, but all condos and most new hosues have them and if you stop paying them they can even foreclose on your house.

[Bruehound]

HOA's are the libertarian market alternative to zoning and land use regulation because you voluntarily enter into the restrictions and covenants when you buy or lease the property. If you don't like the fee's or level of restrictions, don't live there.

I. personally hated the Condo Assoc I was in so we sold and bought a home independent of a HOA.

[Live_Free_Or_Die]

You can move and get away from an HOA.

[Bruno]

I'm wondering what other libertarians think of HOA fees. I absolutley despise them and view them almost as an additional level of government, as if federal, state and local isn't enough we now need a subdivision level of governence. Like the government, it rests on the notion you need to heavily regulate everything and tell them what they can and can't do with there own property. It's also very orwellian to see a pencil pushing HOA person walking around subdivisions writing people tickets for weeds etc. People say its voluntary, but all condos and most new hosues have them and if you stop paying them they can even foreclose on your house.

All that is waiting to happen is for a liberty-minded developer to create a subdivision where the traditional HOA rules do not apply, and if people flock to move there, the idea will spread.

[Howard_Roark]

I'm really having a tough time seeing as how having more rules and regulations piled on top of city ordinances is libertarian in nature. If you didn't have to pay property taxes and HOA replaced it then that would be one thing but having to pay city property taxes then an additional HOA fee is rediculous. I think having phone service with AT&T is voluntary, an HOA where you have to pay not so much.

I would think that what Houston has - no zoning at all would be the most libertarian in terms of property.

[TonySutton]

HOAs are a very decentralized way of handling zoning and services as compared to county, state or federal. Some people want to live in areas where these things are controlled and I would much rather them be setting regulations in their subdivision than trying to do it for a whole county, state or all of the US.

[Bern]

I live in a subdivision that does not have an HOA. We are surrounded by subdivisions that do. The subdivisions that do also have community pools and landscaped common areas (medians in roads, parks, etc.).

For many people, an HOA is like an insurance policy for home values. If you are investing a lot of money into your home, you generally want to protect it's value - and that is, for better or worse, defined by your neighbors.

[ladyjade3]

HOAs are voluntary. There are options and alternatives. Buy somewhere else. I would never want to live under an HOA. As an ex-realtor I know what a pain they can be.

I knew I had found my home in Durham when I saw the gawdawful giant swordfish birdbath proudly on display in my neighbor's front yard. If that thing was sitting out all proud in the sunshine, there was surely freedom here, at least among the neighbors. And it was a really great place as far as the neighbors were concerned. Salt of the earth, good all-American people who will share a beer with you, ask about each other's kids, take care of your dog when he gets out of the fence until you find him, invite you to each other's noisy house parties (that way no one calls the cops)

And no one ever complained when we didn't get the yard cut quite as often as we meant to, or left the trash bin at the curb all week.

Great neighborhood for us, but its not for everyone. Lots of people think an HOA will help property values and make sure no house becomes a blight for everyone else. That's the great thing about choice. We chose just to be friendly neighbors, not to develop some authoritarian committee.

[tremendoustie]

HOAs are better than the government, but I'm not sure the way they're currently implemented is entirely voluntary. Agreements can only be made with people -- I can't agree that my property will be uninhabited for all time, for example. Once I die, whoever owns the property can re-purpose it. Similarly, once I die, a property I have designated be part of an HOA could be re-purposed. That's my view anyway, although others may disagree.

People who are alive must own all rights to a property. If I sell you a property with a condition, I in effect retain partial property rights. But, once I die, that partial right must pass to the owner, or some other beneficiary. It can't just stay there for eternity.

[Anti Federalist]

HOAs are a pain in the ass but overall better than taxes.

You volunteer to be part of them and they don't have men with guns to come and rout you out if you default.

[erowe1]

I just recently got in a Facebook debate with people about HOAs.

There's this state senator here who's considered one of the more libertarian ones (he sponsored the Indiana sound money bill a year ago or so--I don't think it got voted on, if it did it didn't pass). And he put up this comment boasting that they had just passed a new law making it illegal for HOAs to regulate use of political yard signs. I took the side that the law is wrong, because it violates my basic right to enter a contract with others where we mutually agree not to use our property for political yard signs. I was surprised to see everyone else, including pro-freedom people side against me on that.

Ironically, we still have municipal statutes in places in Indiana, including where I live, that regulate political yard signs. So the state apparently has no problem with those. They just don't want HOAs to do it. It seems to me that they just don't like competition.

[ladyjade3]

They have a right to exist, and you can't buy a house without all of those stipulations being disclosed, so pay attention to those details and don't get yourself into an intolerable situation.

[noxagol]

As they are voluntary, it is quite libertarian. Libertarians don't seek freedom from excessive rules, they seek freedom from excessive GOVERNMENT rules. If the choice made was done without force or threat of force, then it is perfectly libertarian.

[Brian4Liberty]

Yes, HOA are like little governments, with all of the same problems. Power goes to the heads of people, insider deals with HOA money, every nit-picky idiot gets to demand new rules, and they usually get implemented.

HOA dues are $400/mo where I live, in a 2bd/2bth condo (no, not a luxury high-rise on the beach). How's that for a government like tax?

[Brian4Liberty]

All that is waiting to happen is for a liberty-minded developer to create a subdivision where the traditional HOA rules do not apply, and if people flock to move there, the idea will spread.

That's the way it used be. The idea that is spreading is that everyone will be under some kind of HOA.

[silentshout]

I agree that they are voluntary, in most areas, but where I live, there are very, very few neighborhoods without HOAs. I dislike them personally, and hope one day to move somewhere where we have more choices of neighborhoods. (I live in SoCal and we like to be close to work, so we have limited ourselves to HOA communities.) However, in essence they are still voluntary so I guess it's ok.

[Howard_Roark]

From http://en.wikipedia.org/wiki/Homeowner_association

[edit] Criticisms
[edit] Onerous regulations
Homeowner associations have been criticized for having excessively restrictive rules and regulations on how homeowners are allowed to conduct themselves and use their property[11]. Some maintain that homeowner association leaders have limited financial incentive to avoid indulging in rigid or arbitrary behavior; unless people begin to leave in droves, it will have little effect on the value of a board member's home.

[edit] Restriction of liberties
Some scholars and the AARP charge that in a variety of ways HOAs suppress the rights of their residents.[12] Due to their nature as a non-governmental entity, HOA boards of directors are not bound by constitutional restrictions on governments, although they are essentially a de-facto level of government.[13]

At their own expense, a homeowner-member may sue a board of directors for perceived breach of duty. Association insurance provides not only for a board member's legal expense, but any judgment attained against them. Homeowners must pay out of pocket for any case they bring to court and risk being personally liable for any judgment and/or Association's legal fees as well as their own, the prevailing party being responsible for liability and legal expenses when judgment is rendered.

Corporation and homeowner association laws provide a limited role for HOA homeowners.[14] Unless either statutory law or the corporation's governing documents reserve a particular issue or action for approval by the members, corporation laws provide that the activities and affairs of a corporation shall be conducted and all corporate powers shall be exercised by or under the direction of the board of directors.

Homeowner associations establish a new community as a municipal corporation without ensuring that the residents governed will have a direct voice in the decision-making process.[15] Voting in a homeowner association is based on property ownership,[16] Only property owners are eligible to vote in elections, which differs from the one person, one vote system prized by modern democracies. Renters are prohibited from directly voting the unit, although they can lobby other the owners, since the association has contractual agreements solely with owners. Additionally, voting representation is equal to the proportion of ownership, not to the number of people.[17] The majority of property owners may be absentee landlords, whose values or incentives may not be aligned with the tenants'. Homeowners have challenged political speech restrictions in associations that federal or state constitutional guarantees as rights, claiming that certain private associations are de facto municipal governments and should therefore be subject to the same legal restrictions.

Of great concern is the fact that several court decisions have held that private actors may restrict individuals' exercise of their rights on private property. A recent decision in New Jersey held that private residential communities had the right to place reasonable limitations on political speech, and that in doing so, they were not acting as municipal governments.[18] With few exceptions, courts have held private 'actors' are not subject to constitutional limitations — that is, enforcers of private contracts are not subject to the same constitutional limitations as police officers or courts. In 2002 the 11th Circuit Court of Appeals, in in Loren v. Sasser, declined to extend Shelley beyond racial discrimination, and disallowed a challenge to an association's prohibition of "for sale" signs. In Loren, the court ruled that outside the racial covenant context, it would not view judicial enforcement of a private contract as state action, but as private action, and accordingly would disallow any First Amendment relief.[19] In the Twin Rivers case, a group of homeowners collectively called "The Committee for a Better Twin Rivers" sued the Association, for a mandatory injunction permitting homeowners to post political signs and strike down the political signage restrictions by the association as unconstitutional. The appeals court held the restrictions on political signs unconstitutional and void, but the appeals court was reversed when the New Jersey Supreme Court overturned the Appellate courts decision in 2007 and reinstated the decision of the Trial Court. The Court determined that even in light of New Jersey’s broad interpretation of its constitutional free speech provisions, the "nature, purposes, and primary use of Twin Rivers property is for private purposes and does not favor a finding that the Association’s rules and regulations violated plaintiffs’ constitutional rights." Moreover, the Court found that "plaintiffs’ expressional activities are not unreasonably restricted" by the Association’s rules and regulations. Finally, the Court held that "the minor restrictions on plaintiffs’ expressional activities are not unreasonable or oppressive, and the Association is not acting as a municipality."

In some HOA's, the developer may have multiple votes for each lot it retains, while the homeowners are limited to only one vote per lot owned. This has been justified on the grounds that it allows residents to avoid decision costs until major questions about the development process already have been answered, and that as the residual claimant, the developer has the incentive to maximize the value of the property.[20]

[edit] Board misconduct
The New Jersey Department of Community Affairs reported[21] these observations of Association Board conduct:

“It is obvious from the complaints [to DCA] that that [home]owners did not realize the extent association rules could govern their lives.”

"Curiously, with rare exceptions, when the State has notified boards of minimal association legal obligation to owners, they dispute compliance. In a disturbing number of instances, those owners with board positions use their influence to punish other owners with whom they disagree. The complete absence of even minimally required standards, training or even orientations for those sitting on boards and the lack of independent oversight is readily apparent in the way boards exercise control"

Overwhelmingly ... the frustrations posed by the duplicative complainants or by the complainants’ misunderstandings are dwarfed by the pictures they reveal of the undemocratic life faced by owners in many associations. Letters routinely express a frustration and outrage easily explainable by the inability to secure the attention of boards or property managers, to acknowledge no less address their complaints. Perhaps most alarming is the revelation that boards, or board presidents desirous of acting contrary to law, their governing documents or to fundamental democratic principles, are unstoppable without extreme owner effort and often costly litigation.

Certain states are pushing for more checks and balances in homeowners' associations. The North Carolina Planned Community Act,[22] for example, requires a due process hearing to be held before any homeowner may be fined for a covenant violation. It also limits the amount of the fine and sets other restrictions.

California has severely limited the prerogatives of boards by requiring hearings before fines can be levied and then limiting the size of such fines even if the owner-members do not appear. Any rule change made by the board is subject to a majority affirmation by the membership if as few as five percent of the membership demand a vote. This part of the civil code[23] also ensures that any dissenting individual who seeks a director position must be fully represented to the membership and that all meetings be opened and agenda items publicized in advance.

[edit] Double taxation
Most homeowners are subject to property taxation, whether or not said property is located in a planned unit development governed by a homeowners' association. Such taxes are used by local municipalities to maintain roads, street lighting, parks, etc. In addition to municipal property taxes, individuals who own private property located within planned unit developments are subject to association assessments that are used by the development to maintain the private roads, street lighting, landscaping, security, and amenitites located within the planned unit development. A non-HOA property owner pays taxes to fund street repairs performed by the city; the HOA property owners pay these same taxes, but without the same benefit, since the local government will not maintain the streets to their homes. Thus the HOA property needs to pay a second time, to privately maintain the street.

The proliferation of planned unit developments has resulted in a cost savings to local governments in two ways. One, by requiring developers to build 'public improvements' such as parks, passing the cost of maintenance of the improvements to the common-interest owners, and two, by planned unit developments being responsible for the cost of maintaining infrastructures that would normally be maintained by the municipality.[24]

[edit] Financial risk for homeowners
In some U.S. states (such as Texas) a homeowners association can foreclose a member's house without any judicial procedure in order to collect special assessments, fees and fines, or otherwise place an enforceable lien on the property which, upon the property's sale, allows the HOA to collect otherwise unpaid assessments. Other states, like Florida, require a judicial hearing. Foreclosure without a judicial hearing can occur when a power of sale clause exists in a mortgage or deed of trust.[25]

A report self-published by a professor at Washington University disputes the claim that HOAs protect property values, stating, based on a survey of Harris County, Texas (which had an unusual legal regime regarding foreclosures): “Although HOA foreclosures are ostensibly motivated by efforts to improve property values, neither foreclosure activity nor HOAs appear linked with the above average home price growth.”[26]

Homeowners association boards can also collect special assessments from its members in addition to set fees, sometimes without the homeowners' direct vote on the matter, though most states place restrictions on an association's ability to do so. Special assessments often require a homeowner vote if the amount exceeds a prescribed limit established in the Association's by-laws. In California, for example, a special assessment can be imposed by a Board, without a membership vote, only when the TOTAL assessment is 5 percent or less of the association's annual budget. Therefore in the case of a 25 unit association with a $100,000 annual operating budget, the Board could only impose a $5,000 assessment on the entire population ($5,000 divided by 25 units equal $200 per unit). A larger assessment would require a majority vote of the members. In some exceptional cases, particularly in matters of public health or safety, the amount of special assessments may be at the board's discretion. If, for example there is a ruptured sewer line, the Board could vote a substantial assessment immediately, arguing that the matter impacts public health and safety. In practice, however, most Boards prefer that owners have a chance to voice opinions and vote on assessments.

Increasingly, homeowner associations handle large amounts of money. Embezzlement from associations has occurred occasionally, as a result of dishonest board members or community managers, with losses up to millions of dollars.[27] Again, California's Davis-Stirling Act, which was designed to protect owners, requires that Boards carry appropriate liability insurance to indemnify the association from any wrong-doing. The large budgets and expertise required to run such groups are a part of the arguments behind mandating manager certification (through Community Association Institute, state real estate boards, or other agencies).

The AARP has recently voiced concern that homeowners associations pose a risk to the financial welfare of their members. They have proposed that a homeowners "Bill Of Rights" be adopted by all 50 states to protect seniors from rogue Homeowner Associations.[28]

[Brian4Liberty]

Increasingly, homeowner associations handle large amounts of money. Embezzlement from associations has occurred occasionally, as a result of dishonest board members or community managers, with losses up to millions of dollars.[27]

This is the root problem of all socialization. Whether it is the government, homeowners associations, insurance companies, charities, or any large pot of money, it is always ripe for the taking, usually by the people who are supposed to oversee that money.

Who wants to be on the HOA Board? Most people don't. And when there is a vote for members, people have no idea who they are voting for.

One of many scams: A large HOA has a ton of money sitting in the bank. A sleezy contractor (or family or associates) purchases a property, runs for HOA Board. Maybe two of them do it. They get on the Board because no one pays attention. At that point, they push for a major project (such as replacing all of the roofs, which is an HOA responsibility). Guess who gets the contract? And that big bank account that was ripe for the picking gets drained. And no, the roofs don't need replacement, but the "experts" (guess who?) say that it is necessary.

And even better, once the HOA accounts are drained, they can push for an "assessment". That means that each home owner has to pony up another $10k-$20k for some project. They are like Congress. They need a majority vote of homeowners for an assessment, but they will just keep coming back. They lose the first vote, they will lobby, harass, modify plans, and come back for another vote, over and over until they get it.

HOAs are exactly like government, just on a smaller scale.

[fisharmor]

We waited a whole year as our realtor friend checked the market every. single. day. to find our house.
I had two criteria: had to have a space for a shop, and NO HOA.

The result?
I live in the only neighborhood in the DC suburbs where I know all my neighbors.
One neighbor I met when he flashed a light in my picture window during a party. His dogs were going berzerk over something so he took to the street with a shotgun to check how everyone was doing.
We've set off mortar fireworks in my back yard.
Last fall I utterly crushed my neighbor's fence with a 10" diameter tree limb. She got it fixed and asked me to pay half of the cost because the fence was 6" over the property line.
When my daughter was accidentally born at home, nobody thought anything of us knocking on doors at 10pm to find a heating pad.
All the neighborhood kids have access to pretty much everyone's front yard.
As soon as it stops snowing, all the young men get to work shoveling out the elderly neighbor's houses.

In short, in the absence of an authority, we are forced to know and work with each other.
It's one of the reasons I lean so much toward anarchy. I know it works.