Silence is not golden! Seems that too many Homeowners Association (HOA) home owners can get long on complaints but short on acting on their concerns. If you have/had an HOA complaint or feel you’ve been wronged by your HOA Board or property management company (PMC) you’re not alone but you must be heard. The State HOA Office and your State representatives have received thousands of HOA complaints over the past two years. This represents but a fraction of HOA complaints.
HOA home owner apathy is no different than in our general population. What drives apathy in HOA disputes is an inability of home owners to successfully exercise their rights. In Colorado we have many HOA laws and nearly two-thirds of our population live under HOA governance. Home owners encountering problems and simply trying to get their HOA to comply with their own governing documents quickly find out that what is in the law and their by-laws is not always enforceable from the home owners perspective. The number one reason for our HOA laws being basically unenforceable is that they all lack a viable, affordable, and accessible means for dispute resolution except our costly, time consuming, litigious, and “pay to play” court system. This dilemma on HOA governance increases home owner apathy and disengagement but doesn’t dampen individual disenchantment with the HOA living concept.
The solution to enforcement of HOA home owner rights rests with implementing an out of court binding dispute resolution process. A process that is affordable and accessible and has a definite beginning (filing a complaint) and end (a decision). Such a process was recently passed into law for HOA home owner complaints with PMCs that will go into law in July 2015. This process is also used when filing complaints against licensed professions in the State via the Department of Regulatory Agencies (DORA). Why not for HOA home owner complaints?
The State of Colorado completed a study that identified out of court binding dispute resolution for home owner complaints. This process would handle 95% of home owner complaints that involved non-compliance with HOA law and HOA governing documents but not be applicable to felony cases or those over a certain dollar limit in damages. Home owners could still opt to go to court vs this process and thus no one’s legal rights to a court case are forfeited. The process levels the playing field by not requiring lawyers and costly court proceedings, decides cases on current HOA law and HOA governing documents not legal maneuvers in court, allows for home owners to have their “day in court”, provides no advantage to those with financial resources, keeps frivolous complaints out of court, saves home owners and HOAs in court costs, and provides finality to complaints. It is the solution to HOA complaints.
Implementation of an out of court binding dispute resolution process only awaits legislator sponsors in the upcoming Colorado legislative session. I can assure you that those opposed to reform such as the Community Association Institute (CAI), property managers, and HOA lawyers are already at work with their lobbyists, lawyers, and financial influence to stop such HOA reform in Colorado.
Our organization, Colorado HOA Forum, knows your State legislators are finally beginning to understand HOA issues from the home owner’s perspective. They know what should be done but to date have no done it. In the past, legislators only listened to well paid lobbyist such as the CAI to craft legislation and pursue HOA issues. Of course this ensures nothing changes. HOA home owners must contact their legislators asking them to support the State HOA study and implement an out of court binding dispute resolution process. This can easily be done by visiting the Colorado HOA Forum’s web site.
Showing posts with label hoa dues. Show all posts
Showing posts with label hoa dues. Show all posts
Friday, September 12, 2014
Your Voice: HOA fees: it’s not the amount but the value and justification
Two thirds of Colorado residents live under Homeowners Association (HOA) governance. All live under covenants, controls, and restrictions and are assessed dues and fees in return for community provided services and amenities. Amounts vary and so do the range and quality of service. Dissatisfaction arises when the value of services for fees is not in line with home owner expectations and/or the justification for fees is poorly supported and can’t be contested. So what causes this misconnect between expectation and delivery.
Problems can occur when HOA home buyers/owners are unaware of what services are to be provided by the HOA. Providing this information to home owners prior to closing on the sale of a home and having buyers certify they read it should be a legal requirement. Problems also occur when HOAs mismanage funds resulting in an inability to provide services at a quality level. This includes not funding HOA reserve funds for planned maintenance, using intended maintenance funds inappropriately on Board special projects or on costly and mostly avoidable law suits, over paying and not competing contract work, and just poor financial planning and management with no oversight or accountability. Then there is the problem of HOA dues being too low for too long to deliver services. Another significant and less discussed problem relates to the lack of oversight and control over the property management companies (PMC). In most HOAs, the PMC runs the community and yes this is the tail wagging the financial dog with little oversight or disclosure to home owners. One more but necessarily the last problem is that HOA Boards have almost zero accountability and unlimited authority in making financial decisions for the community without apprising or with the approval of home owners. This includes raising HOA dues, making special assessments, embarking on high cost law suits, and funding special and high cost projects all without home owner approval or having to justify their actions to home owners.
Then there are fees assessed HOA home owners by PMCs that are not in any HOA documents or approved by HOA Boards. For example, the HOA Transfer Fee. This fee is NOT imposed by, determined by, or retained by the HOA but pocketed by the PMC upon the sale of a home in an HOA. No justification or legal requirement is given, the amount is arbitrary ranging from $100 to over $1,000, can’t be negotiated, must be paid or you can’t sell your home, and worst of all you don’t know about the fee until the closing on your home.
HOA fees and financial accountability are an ongoing problem for HOA home owners. Although Colorado has many HOA laws they all lack an ability to hold the HOA Board and/or PMC accountable for financial mismanagement, reckless behavior, or to provide quality services. The laws lack mandates for home owner involvement and approval on spending HOA funds. Home owners are left paying the fees and assessments unless they choose to challenge the HOA in our costly, litigious, time consuming, “pay to play” court system and most simply can not afford this venue. The good news is that most HOAs and PMCs operate with a good degree of integrity but when bad apples arise the financial consequences can be catastrophic and costly to home owners. Until our State laws are modified to empower home owners with a means (out of court binding dispute resolution process) to hold HOA Boards and PMCs accountable home owners will remain vulnerable to financial abuse and unexpected financial obligations.
Problems can occur when HOA home buyers/owners are unaware of what services are to be provided by the HOA. Providing this information to home owners prior to closing on the sale of a home and having buyers certify they read it should be a legal requirement. Problems also occur when HOAs mismanage funds resulting in an inability to provide services at a quality level. This includes not funding HOA reserve funds for planned maintenance, using intended maintenance funds inappropriately on Board special projects or on costly and mostly avoidable law suits, over paying and not competing contract work, and just poor financial planning and management with no oversight or accountability. Then there is the problem of HOA dues being too low for too long to deliver services. Another significant and less discussed problem relates to the lack of oversight and control over the property management companies (PMC). In most HOAs, the PMC runs the community and yes this is the tail wagging the financial dog with little oversight or disclosure to home owners. One more but necessarily the last problem is that HOA Boards have almost zero accountability and unlimited authority in making financial decisions for the community without apprising or with the approval of home owners. This includes raising HOA dues, making special assessments, embarking on high cost law suits, and funding special and high cost projects all without home owner approval or having to justify their actions to home owners.
Then there are fees assessed HOA home owners by PMCs that are not in any HOA documents or approved by HOA Boards. For example, the HOA Transfer Fee. This fee is NOT imposed by, determined by, or retained by the HOA but pocketed by the PMC upon the sale of a home in an HOA. No justification or legal requirement is given, the amount is arbitrary ranging from $100 to over $1,000, can’t be negotiated, must be paid or you can’t sell your home, and worst of all you don’t know about the fee until the closing on your home.
HOA fees and financial accountability are an ongoing problem for HOA home owners. Although Colorado has many HOA laws they all lack an ability to hold the HOA Board and/or PMC accountable for financial mismanagement, reckless behavior, or to provide quality services. The laws lack mandates for home owner involvement and approval on spending HOA funds. Home owners are left paying the fees and assessments unless they choose to challenge the HOA in our costly, litigious, time consuming, “pay to play” court system and most simply can not afford this venue. The good news is that most HOAs and PMCs operate with a good degree of integrity but when bad apples arise the financial consequences can be catastrophic and costly to home owners. Until our State laws are modified to empower home owners with a means (out of court binding dispute resolution process) to hold HOA Boards and PMCs accountable home owners will remain vulnerable to financial abuse and unexpected financial obligations.
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