Rein in associations hostile to homeowners


Article Courtesy of The Tampa Tribune


Published May 6, 2012

Homeowners associations, the first level of government for many Florida residents, have grown too powerful and appear to be trampling the rights of property owners.

In a recent episode in Pasco County, an association evicted a homeowner's tenant, changed the locks and is renting the home itself to try to collect dues the homeowner owes. A judge allowed this to happen even though the house is not in foreclosure.

If taking possession of homes that way is legal, then state law needs to be changed to better protect the actual owners.

As Shannon Behnken reported in the Tribune, the owner is in the process of a legal challenge to try to regain possession of her home. The amount of fees, fines and assessments owed the Bridgewater Community Association is reported to be $2,565, although the owner says she missed only one annual dues payment of $225.

Forcing a renter to pay appropriate dues is not unreasonable, considering the renter enjoys neighborhood amenities supported by all residents. But leveraging an overdue fee into effective ownership is an abuse and, as Behnken observed, "a measure of how complicated the housing bust has grown."

With more homeowners unable to pay dues and more homes abandoned, the homeowners associations have been forced to be firm in trying to protect their members from carrying an unfair share of maintenance costs and dues.

About one in five homeowners nationwide belong to an association, the AP reports. That's 24.4 million homes. Four out of five new homes have gone up in association-run neighborhoods.

An association gives a higher level of service than is usually available from a town or county. This is especially true in unincorporated suburban areas common in Hillsborough and Pasco counties. If you want a community pool, don't expect the county to build you one. The property owners have to build and maintain it themselves.

It's a version of private government, and how transparently and neighborly associations are run varies greatly. Florida law allows unpaid dues to become a lien on the property. In the housing crisis, it can be hard to figure out how to collect the lien.

Some banks and mortgage companies seem to be intentionally slowing down short sales or putting off the process of taking title to a foreclosed home in order to avoid the high fees charged to homeowners. That's why the nation's two largest backers of mortgages, Fannie Mae and Freddie Mac, are justified in giving lenders a push, starting June 15, to keep the liquidation process moving.

The new rules will require a decision within 30 days of receiving an offer for a short sale. Sometimes the process drags on for a year or more. Meanwhile, the house might well be deteriorating and any homeowner dues unpaid.

It is unclear whether the new deadline will help break up the complicated legal logjam. Some lenders appear overwhelmed. Some delinquent owners are trying to game the system. Sometimes potential buyers change their minds, and the whole negotiating process must start over. Sometimes buyers are put off by big liens from homeowner associations.

And sometimes the banker just vanishes. As a real estate broker told the Boston Herald, "You're dealing with one person one day and they say, 'Don't worry, everything's fine,' then suddenly they're gone and you never hear from them again," leaving the deal stalled for weeks.

At the current pace of sales, the country has a 16-month supply of distressed properties, according to RealtyTrac. The faster the process runs, the sooner the housing recovery will begin.

But no matter what the current value of homes, clear ownership of property is a fundamental requirement for a free economy. Where there is doubt, the law should side with the owner, not the neighbors.