Governing bodies are charged with oversight. In order to prevent oversight from becoming overreach, and even downright tyranny, transparency and accountability are key. Homeowners associations, as governing bodies, must work to preserve visibility into the work of Board Members and Managers alike. An overzealous Board Member, disorganized Manager, or belligerent homeowner can do a lot of damage to the community. A simple internet search returns countless “HOA horror stories” with a couple of common themes: 1. Abuse of power by the Manager or Board (or individual Board Member) and 2. Ignorance of or disregard for the rules detailed in the association’s governing documents on the part of Homeowners, Board Members, and/or the Manager. Here is a real-life horror story pulled from the headlines for each of these themes and a summary of how effective use of software may have prevented the drama.
1. Abuse of Power:
There are many stories that fit this category, but most striking are those that involve financial crimes. This one is particularly attention-grabbing due the brazenness of the crime: Roy Charles Mayberry, a former employee of the Lake of the Woods Association of Locust Grove, Virginia, pleaded guilty to an embezzlement and money laundering scheme that he ran for over four years, stealing over $450,000 from the association.
Nobody steals money thinking they are going to be caught. None of the news articles on this crime provide detail regarding how the books were kept for the community, nor is any insight given into the financial procedures in place, but clearly the system was lax. Committing such crimes is substantially more difficult when layers of software standardization and security are applied.
2. Ignorance/Disregard for Rules:
Most of the bad press regarding HOAs seems to arise from Boards taking liberties in interpreting and enforcing the rules, or, more commonly, homeowners disregarding the rules. The most expensive example of current HOA vs. Homeowner litigation in the country is the result of a homeowner, Jim Hildenbrand, not getting approval for improvements to his yard. Even if the landscaping changes were tasteful, the simple fact is they were not approved. Each side has spent around $400,000 on this case and the legal battle continues. Mr. Hildenbrand might well bankrupt the association because of his refusal to seek approval for his improvements and unwillingness to comply even after the court ruled he had not secured the necessary approval.
Homeowners disregard HOA rules for many reasons; maybe they don’t agree with them, maybe the legalese used in the drafting of rules is unapproachable, and maybe they just never read them. In the case of association rules, ignorance is NOT bliss! If you live in an HOA, do yourself a favor and read through the rules that you obligated yourself to follow by purchasing a home in the community. If you are Manager or Board Member, make it easier for homeowners to lookup, read, and understand the rules. Post these documents online in a public website (these are kept as public record, so there should be no privacy concerns with posting), or in a secure community portal. Often these documents are scanned copies of the originals recorded with the county, so keyword search in the PDF could be inoperable, and some text might not even be clearly legible. Although a TEDIOUS task, one thing I’ve done for my HOA is retype every word of the CC&Rs and Bylaws into a Word document, saved as a PDF and uploaded to our eUnify homeowner portal. This allows homeowners to search through text without reading every word.
Most of the horror story headlines come down to a lack of effective communication. Making community information, including governing documents, meeting minutes, and newsletters available online to homeowners is a good start. Adopting management software is a great way to add on two-way communication functions and preserve precious history should a legal dispute arise. eUnify has a great all-in-one offering that can help you keep your financial records, compliance activities, architectural review processes, and homeowner communications in order.