HOMEOWNER ASSOCIATION COMMUNITIES: DYNASTIES OF DYSFUNCTION

HOMEOWNER ASSOCIATION COMMUNITIES: DYNASTIES OF DYSFUNCTION


By Donie Vanitzian, BA, JD, Arbitrator
(c)2006



In centuries past, an emperor could decide the fate of an entire community with nothing more than a nod of his head. Some believe a similar system exists today, but instead of one emperor there are boards of emperors who on a whim can decide the fate of an entire community of homeowners.

A quasi‑judicial authoritarian panel is established called a "board of directors" which has an unmatched gift for political maneuvering. Directors don't need campaign contributions to stay in power because association operating funds can be plundered at will. The unchecked controls to distribute, gather, and process ballot and proxy votes ensures the imperial board continues its reign. Like dynasties of old, homeowner associations can fall prey to a debauched mistreatment of its owners.


MANAGERS OF MODERN TYRANNY

In the face of crumbling individual rights, censorship is encouraged and laws are passed that further prejudice homeowners. Not unlike feudal systems, boards delegate their authority to handpicked aiders and abetters who carry out their demands. Rebels, dissidents, and rivals of those in control are easily silenced or alienated from the faithful followers In struggling to fight their aggressors, owners are peppered with intimidating salvos delivered by modern day lackeys like lawyers, managers and industry vendors. The job of aiders and abettors in the pecking order is to push through the board's agenda. As those minions become autonomous, the result is a wholesale disenfranchisement of those who are not part of the "chosen" few.


YOUR COOKIE, THEIR FORTUNE

Confronted by aggressive sales techniques, owners are seduced into an illusionary world of affordable housing developments. Frequently, buyers are led to believe they are buying a house "and" a community. Such synthetic communities should be viewed as "commodities" that are in turn reaped by another commodity called "buyers." Of course, the ultimate commodity permeating this housing scheme is money.

Because voluntary purchases are difficult to regulate, buyer problems usually surface after parting with thousands of dollars in down payments. No owner wants to admit they failed to adequately investigate what they bought; yet buyers have been known to do just that.

Some buyers may seek to justify their bad decisions by overestimating the definition of "value." No doubt believing they are graduating from the middle‑class, new owners are quick to brag to friends that they have just purchased a condo packed with amenities. Irrespective of whether the buyer uses that gym or lap pool, they still boast of it. While wanting to leave others with an impression of accomplishment, little thought is given to the maintenance, risks and liabilities of all those "extras" accompanying their purchase. Owners choosing to ignore these added financial obligations later find themselves strapped for cash and unable to make ends meet. Unfortunately, the "largeness" of a development is often mistakenly analogized to the owner's personal success. Quite the opposite is true.


HUNTER AND HUNTED

"When a man wants to murder a tiger he calls it sport; when a tiger wants to murder him he calls it ferocity." --George Bernard Shaw.

Generally, community association industries are parasitic businesses, constantly blurring the line between profit and profiteering. This has resulted in the evolution of an industry that does little more than look and act indispensable. Sucking the lifeblood from owners held hostage by a defective legal system, it is an organism that has perfected taking advantage of those that are most vulnerable.

Without the legislative mandate that owners must belong to the association and pay fees, the organism feeding and growing on those laws would shrivel up. Unable to otherwise nourish itself, the industry can be found wallowing below the association's bowels eagerly living off its excess and swallowing whatever morsels it sucks from its host. It is the homeowner's personal wealth that feeds those parasites which contribute nothing of consequence to the owners' well being. Like traditional hunters, the industry's survival depends on eating their kill.


THE GREAT WALL OF INEQUITY

Beige paint and potholes aside, artificially created communities undermine the social system as non‑board member owners are relegated to positions of second‑class citizenry. Built into this artificial aura of community is an unspoken association ranking order that is arbitrarily decided by a few persons perceived to be oh‑so‑important. This ranking order frequently reflects the wishes of influential members rather than the merits of those elected to the board or the "real" majority. Such living environments promote exploitation of those under it. Here, an owner's life can become subject to power‑mad rulers with the means and ability to ruin and financially devastate them.

Only the owner has a vested interest in property, yet, outside vendors are often allowed to wield their influence on directors. This leaves owners who are lowest in the social order with minimal bargaining power over their living environment and assets. Because owners essentially relinquish control of their assets to those who have been elected to the board, the owner is burdened with a double financial risk.

The owner's financial crisis differs substantially from the association's financial crisis. An association always has Acash requirements,@ and by law it can raise cash on demand from each owner. Even with this ability, these communities can remain in a constant flux of not being able to meet its liabilities. This means that a Again@ for the association results in a corresponding Aloss@ for each owner, subjecting seniors in particular to potential personal financial distress. --T.Foster Real Estate Broker, Certified Personal Financial Planner

As almost nothing in a community setting is designed to be resolved to the satisfaction of all owners, nearly every financial crisis a board faces can keep recurring. In this oppressive regime, owners become dispensable pawns.


MULTI‑HEADED DRAGONS

For all the pomp and circumstance extolling spectacular benefits of community living, it is for the most part, excruciatingly boring, repetitive, time‑consuming, and expensive, all, with little or no tangible return for owners.
Owners at odds with their association are similar to a minority shareholder taking on a corporate monster whose personality is both dysfunctional and manic. Picture a five‑member board of directors, each with a different personality. As the board changes, so do the personalities of its directors. The multiple personalities of each successive board serve to hinder owner autonomy.

The stakes are high for homeowners and an unintentional mistake or error in judgment can have devastating results. The owner's position is instantly prejudiced not only by statute and case law, but also by the inferior status this environment accords. His membership is contingent on restrictions and rules he may not have seen, agreed to, or know to exist. Depending on the rules of any given association, fines, liens, and foreclosures can all occur. Yet, by law the owner must subscribe in order to belong to this fictional entity.


NO TIME FOR TEA

At first it may be unclear and frustrating figuring this out, but homeowners must understand the relevance of their inferior status in relation to the association and its board of directors. Start by treating the corporate association‑entity for what it legally is ‑‑ a corporate fiction created to operate a business. That business is the "association." Next, view the board of directors like any other corporate board, except here, each director is "expected" to be in a "conflicted" position because they are both homeowner and director. When approached by the multiple personalities responsible for the owner's demise one must remember it is impossible to reason with a "fiction."

Given the large turnover in such developments, accomplishing anything becomes a feat in itself. In this atmosphere, it is a challenge for the owner to merely stay on track and stick to a viable game plan for emotional, financial, and physical survival. The corporate entity's adeptness lies in creating confusion and frustrating the opposition. Owners are the opposition. "Every problem the owner encounters steals days, weeks, months, and years away from their life ‑ none can be recovered."


THE TAO OF TERRITORIAL RULE

Each newly elected board establishes its own dynasty and conquers the membership anew. In a real dynasty, mistakes in an emperor's judgment might lead to the downfall of the regime. In an association such mistakes might systematically be ignored or recur at great cost to owners, but the board goes on.

Directors can be influenced by irrational recommendations from those who lack the skill or expertise to render advice, while others succumb to a mob psychology resulting in poor decision‑making and costly mistakes. "Once the psychological investment is made, more often than not, boards are loath to back down, even if doing so is the right thing to do."

By exploiting a failed legal system, boards avoid responsibility for their incompetence and greed by blaming global economics and deteriorating infrastructures. Circumventing political disorder while ensuring control of burgeoning fiefdoms, over‑confident boards take office by dynastic succession while bypassing scrutiny over an election process. In many associations each new board will consume the financial surpluses accumulated during their predecessors' term and then invoice owners for more. When the board's system of alliances proves untenable, it often plunges into a condition of internal anarchy. Actions like these can result in the indefinite rise of owner assessments and fees to replenish operating accounts in order to stay solvent. As these internal control‑monopolies thrive and property is debased, each owner's emotional currency is tested in ways they never thought possible.

Boards act to benefit the association and not the owners who are responsible for bankrolling the fictional enterprise. Uprisings by owners are gaining ground because their finances and hardships are discounted and their assets are at risk. High‑density over‑building, concentrations of noise, water, and traffic pollutants are aggravated by population migration. With each passing year, owners watch their property‑related payouts and taxes increase while their property rights are reduced.

Self‑assured directors are sustained primarily by virtue of their own use and misuse of homeowner funds. This abuse is virtually unchecked because there is no meaningful statutory accountability. An owner's only weapon to dislodge entrenched directors or those managing these dysfunctional dynasties entails the constant overthrow of those in power. Abolishing a system of exploitation takes extensive planning, consistent dedication and the financial means to sustain oneself during this time.


PERVERSION OF THE FITTEST

Something happens to owners when they are in an environment like this. By virtue of nothing more than a "membership" people who might otherwise champion against civil liberty violations or other medieval actions, find themselves promoting if not dispensing toleration of unacceptable behaviors. When aiders and abettors praise an errant board's "wisdom" or propagandize their perceived successes, it is accomplished at a great loss to owners.
In general, homeowners living in communities are "followers" and most reserve a special brand of contempt for their leaders and rulers. Those playing the part of "director" routinely fancy themselves as possessing a type of scholarly acumen, when in reality they sport nothing more than a pedestrian intellect and paint‑by‑numbers leadership ability. Incredibly, no matter how incompetent these leaders are, owners continue to support them.


INVASIONS

Ongoing intrusions and interferences into the lives of owners consisting of meetings, hearings, violations, warnings, intimidation, and restrictions serve to distort reality. These surroundings produce an abhorrent stimulus that elicits a conditioned response by its residents all in the name of "belonging."

The intensity of living under the rule of an association has the ability to transform personalities. It deliberately impairs natural characteristics on an interpersonal level to instead value and perceive events in a certain manner in order to be accepted and fit in. This occurs even if that type of acceptance is contrary to one's own philosophical and moral beliefs.

Even in the midst of pandemonium, owners must ferret out and stockpile evidence for use at a moment's notice. Obtain and keep as much information from as many sources as possible, particularly meeting minutes.

Wanting to protect their interests, owners looking for solace by hiring an attorney may find that reliance misplaced. Cost aside, owners complain that information provided to their attorney was rejected early on, but during litigation turned out to be critical. By then it was too late to develop evidence in a meaningful manner.

The association's well‑funded arsenal of legal weapons is constantly replenished. Lawyers, letters meant to frighten, restraining orders, lawsuits, fines, penalties, assessments, liens, judicial and non‑judicial foreclosure are at the ready. Like emperors who killed not only their victims but also their families, boards have the ability to legally destroy any owner. Then like rats deserting a sinking ship, directors cut their losses. They KNOW what's coming down the pike ‑‑ they sell their property and disappear.

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