If you live in a neighborhood that is governed by homeowners association (HOA) rules, or are considering buying into such a neighborhood, then I’ve got a book recommendation for you.
The recently published Bad HOA: The Homeowner’s Guide to Going to War and Reclaiming Your Power by Southern California-based attorney Luke Carlson can keep you from pulling your hair out (and the resulting premature baldness) if you wind up with a bad HOA board.
Carlson said he wrote Bad HOA “to provide homeowners the tools to deal with often frustrating and costly situations. Still, I believe in the HOA concept and have had many highly positive interactions with boards that work to benefit all of their homeowners.”
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
Kiplinger’s Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
Who should consider buying in an HOA?
Carlson described the people for whom living in an HOA would be a good fit:
They prioritize property values and neighborhood stability, which are not always reliable characteristics of traditional homes/neighborhoods.
They want a group — almost like a government agency — that acts as an enforcement arm of the governing agreement all homeowners in the neighborhood sign. If homeowners have a problem, they can go to the board.
They appreciate having a safety net that is able to prevent/resolve conflicts, such as the neighbor who parks junk cars on their lawn, allows their home to fall apart or refuses to safely maintain vegetation — such as trees at risk of falling, creating risk of personal injury or property damage — that are common in traditional neighborhoods.
They want uniform rules about home colors and property modifications to prevent changes that could adversely impact neighbors or their property values. When everyone is required to have nicely maintained homes and yards, Carlson notes, the community is enhanced.
Who would not be well-suited to live in an HOA?
Carlson said he has found that residing in an HOA community is not appropriate for everyone. He described people who might not appreciate the restrictions:
They don’t want constraints on what they can paint the exterior of their home.
They intend to run a business out of their house. That’s permissible in non-HOA neighborhoods, but many associations have restrictions on operating a commercial venture from homes.
They see an HOA board as Big Brother, rather than a safety net. They don’t want anyone having a say over what they can do with their house.
“You’ve got to know yourself,” Carlson said. “Be honest and ask, ‘Can I be happy with these restrictions?'”
What do bad (and good) HOA board members do?
Bad HOA lets readers know what bad HOA board members look like:
- They disregard state laws governing a board member’s activity and the HOA’s governing documents.
- They attempt to personally benefit from their decisions.
- They ignore their fiduciary obligations and set rules that amplify their power in the community or benefit them financially.
Carlson also lists the attributes of a great HOA board member:
- They take their obligations to the community seriously.
- They understand and follow governing documents.
- They acquire a good grasp or their state’s HOA laws, and when in doubt, they consult the association’s lawyer for help.
When things go wrong, keep emotions out of it
If you encounter a conflict with your HOA board, Carlson offers the same advice that most lawyers hear in law school about biting your tongue: “If issues wind up becoming litigated, HOA attorneys just love it when they can present a judge or arbitrator a homeowner’s letter that screams anger and profanity.
“Always remember that whatever you put in writing to the HOA board will be read by others. So, address the issues in a logical, reasonable manner, being mindful of your emotions. Keep it clinical, factual and on point. This will serve you well.”
Homeowners have power
Bad HOA shines a spotlight on the nightmares that often occur with poorly run HOAs and offers suggestions on how to deal with them.
Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.
“There has been so much media coverage about HOAs that have gone really bad,” he said. “I wanted to help homeowners and potential buyers realize that if this happens, you are not condemned to being a victim of that reality. You have tremendous power.”
Bad HOA, which is accessible and so well written, is the only resource I have found that offers step-by-step instructions that empower frustrated homeowners who may have thought, “I’ve got no power at all.”
On the contrary, they do not have to tolerate the actions of a bad board or board member. They can push back against unfairness, and Bad HOA outlines how to do that successfully.
We need more attorneys like Carlson. You won’t see him in television commercials, boasting about how much money he has gotten for victims of auto accidents.
Instead, he and his team devote their education and experience to helping, a goal that many of us had when entering law school, before dollar signs got in the way.
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
