Recently, NBC reported on a new “Condo Takeover Scheme” where homeowners who are actually paying their mortgage risk losing their condos to the condo association. How does it work? In a nutshell, an investor comes in and starts buying up other foreclosed units in the condo, eventually getting enough votes to take over the condo board. Once in control of the board, they can set monthly assessments to whatever amount they want. The other owners end up facing foreclosure because they are hit with skyrocketing condo assessments they cannot afford.
How is this even possible? Because condo associations are the devil. Too harsh? No. Not too harsh. Some wise person said “Power corrupts. And absolute power corrupts absolutely.” Yea, absolutely.
Now granted, the scheme discussed in this article is not your everyday event. But the fact that this scheme is even able to happen proves what I have always said, “Condo association and HOA’s have way too much power and no checks on this power.”
Maybe you’re saying, “C’mon Paul, get real. We need these associations to maintain property values by keeping the neighborhoods looking good and clean. Besides, the people on the board are the owners themselves. They don’t have personal agendas. They just care about their community.”
OH REALLY? So it’s for the “good of the community” that an association can foreclose on an owner who owes less than $100 but with outrageous attorney’s fees and tacked on “costs” now has to pay over $3000 to avoid losing his home? How is this fair? How is this reasonable? How is this for the “good of the community”? That’s just one example. I could go on and on and on.
Listen. I’m not saying that associations don’t serve a legitimate purpose. But the reality is that many of these boards are made up of people who have little to no experience in leading or governing and have even less knowledge about the law. Not that the law helps in this area because the laws give them so much power that there is little they cannot do. And if they are wrong or abusive, what can a homeowner do? The only real option is to suck it up and do what they say or sue them. In my opinion, we need to get some checks on these condo and homeowner associations. They need someone to answer to that doesn’t require homeowners to submit to their regime or be forced into an expensive lawsuit.