HOA Mismanagement

The Standard Examiner reported on its front page yesterday that an HOA for a condominium complex had not paid the water bill for the units it manages. This, despite receiving $75 per month in dues. This is the worst case I have seen of an HOA going bad. The owners in this complex are filling their bathtubs with water as they wait anxiously for a resolution. What a crappy situation. I bet there are criminal charges pending.

This is one of the perils of HOAs. Home Owner Associations are often volatile political entities that are charged with levying fines for violations of CC & R's (restrictive covenants). The officers are usually neighbors who are elected by those who participate in the HOA. Like in many political institutions, these folks may not necessarily be competent. For this reason, some HOAs are farmed out to professional HOA management companies that do the management for many neighborhoods at once and are more impartial and less political.

Unfortunately, Utah HOAs have a history of becoming meaningless institutions after about 7 years in a particular neighborhood. Most new subdivisions come with CC & R's and an HOA to enforce them. As the subdivision is built out, the builder no longer cares about the neighborhood. Most folks in the new subdivision follow the rules. Then a neighbor moves and rents out his home. The renters could care less about the CC & R rules and store their demolition derby car on the street in front of the home. In steps the HOA to enforce the rules. The landlord is friends with the HOA VP so the enforcement is lax. The neighbors complain but nothing happens. Another neighbor decides to buy an RV and parks it in front of his home. Since the HOA didn't enforce the removal of the demolition derby, they now have no ground to stand on to enforce removing the RV. As time rolls on, and this "culture" develops in the neighborhood, the HOA looses its authority to enforce the rules. Hence the CC & Rs become void and the HOA drifts into obsolescence.

You will see that this cycle has a direct impact on property values and desirablilty of a neighborhood. This cycle is why the middle-class is always running away to the newest suburbs to escape the slow erosion of quality of life in the once-new suburb they lived in.

Strong and capable HOAs make for better neighborhoods.