Foreclosures, renters, secretive boards and sloppy managers

I read the article – thanks for posting. Assorted thoughts:

I like that Illinois has a condo advisory board – this would be a great thing for Indiana to have, especially if there’s talk about establishing a HOA law. Why not get input from homeowners, property managers and other interested parties on where the law works or does work (or nothing exists) and draft legislation from that?

Rentals are a big issue in my HOA also – for the last three years, we’ve been trying to get updated CCRs ratified, and at first, the sticking point was the rental cap we proposed – and it has a section that allows renting in a hardship situation. We then put in a grandfather clause that would apply to current owners, but still we’re having problems getting it passed (which is another long story I won’t get into here)

Ideally, you should be able to look at any two condos, townhomes or detached houses and not be able to tell which one’s rented vs. owned because both are in good order, but that’s not always the case. I don’t think we’d have all of these issues if (1) owner/landlords took the time to properly screen tenants and explained the HOA rules to them – better yet, write them into the lease, and (2) tweak mortgage lending so that more attention is paid to the buyer’s ability to pay as opposed to the number of rentals in a community. There may be a lot of rentals, but if the maintenance fees are being paid in full and on time, the reserves are being funded and the rules enforced regardless of who lives in the house, the mortgage company should be more satisfied with that.

Rouge boards do exist, but as I’ve said in other posts, they exist in part because homeowners don’t take the time to pay attention to what goes on and participate in their associations to keep crazy board members off (or at least in check). The other part is training – there are resources out there, but not enough boards take advantage of them (our board has had a manual, but it’s in bad need of updating and not everyone, including me, got a copy when we were originally appointed). I think good boards should adopt some sort of code of conduct for homeowners AND board members (CAI has a good one that can be adapted to individual communities.

Finally, there are no easy answers to the foreclosure situation, but I would like to see banks and mortgage companies be held responsible for fees after they take back the house. Instead, nothing gets paid until the house is sold, usually at a loss, and the HOA gets nothing. Meanwhile, we still have to cut the grass, rake the leaves, maintain the pool, clean the gutters, pay property taxes on the common areas, etc. All of this costs money and the older the community, the more money it takes.

In my community, we have lots of delinquencies – and now a big cash crunch due to three incidents of tree root damage to plumbing (the latest episode erupted over Labor Day weekend). If the delinquent homeowners had paid like they were supposed to, the financial hit wouldn’t be as bad, but now, we’re looking at calling for a special assessment AND increasing the fee. The increase may bring more people to the financial brink, but the alternative is even worse.
If nothing else comes out of the current foreclosure mess, I hope it leads to more education on why paying HOA fees is so critical. You can’t just pay and go on about your business and then think EVERYTHING will be covered. The only way common ownership works is if everyone pays their fair share – that’s the part the too many people are missing these days.