O.C. Homeowners Battling Associations : Regulation: Critics call the groups intimidating bullies. They say they are protecting the rights of all.
Dotti Lesko’s lawn is so tiny that gardeners mow it in less than five minutes. Yet a dispute over the lawn with her homeowners association has left her in emotional turmoil, fearing she may lose her home through foreclosure.
The association accused Lesko of violating maintenance rules with an unkempt lawn. It imposed a lien against her property after she refused to pay a $500 gardener’s fee to clean her yard and repair and adjust three sprinklers.
The association then used Lesko’s $258 monthly dues to pay the gardener. As a consequence, Lesko’s dues became delinquent and now a management company, acting on behalf of the association, is threatening foreclosure.
Lesko is one of dozens if not hundreds of homeowners in Orange County fighting their homeowners associations. Critics charge that associations are intimidating bullies who levy unfair fines against the very people they are supposed to represent.
But lawyers for associations contend that the organizations have an obligation to protect the rights of all homeowners and that they are the only policing group to make sure dues are paid and that homeowners follow regulations.
Typically, association-homeowner squabbles are settled before they run the length of Lesko’s case. In Lesko’s situation, the association through its management company has chosen to rely on state law that gives it power to file a lien and begin a foreclosure process.
Lesko’s case is now in the hands of a foreclosure specialist, who said it is stalled in settlement negotiations.
The work on Lesko’s lawn was completed on July 16, 1990. “It’s been a nightmare ever since,” she said.
Lesko claims she never received notice of a hearing to argue her side. The association said it sent the notice in a registered letter that was returned “unclaimed.”
These cases usually pit recalcitrant homeowners against associations in what is becoming more of a legal battleground than mere disagreements among neighbors.
“You have these homeowner associations deferring these collection actions to a law office, which is literally handling hundreds of these matters,” said Mark A. Kompa, a Santa Ana attorney who has had experience in the homeowner association wars.
The tendency is to stay out of court, Kompa said. But that allows case files to thicken, more attorney-to-attorney communication and talks about settlement negotiations--all while the legal meter is running.
“It’s become such a rampant, abusive practice, it’s a disgrace,” Kompa said. “And you can quote me.”
Debra Bass, a spokeswoman with the Community Assns. Institute in Alexandria, Va., said the planned-communities industry is only about 25 years old, “still new and experiencing growth pains.”
Bass estimated that there are 150,000 homeowner associations, including both condominium projects and detached, single-family homes, in the United States.
“We’re still finding ways for people to live together peacefully,” Bass said, adding that the institute is researching alternative dispute resolution to help prevent fights from escalating into nasty court cases.
With associations, every owner of a lot is a member and subject to payment of regular and special assessments to the association for the purpose of carrying out its community functions.
Some associations have taken their quasi-governmental status beyond the norm, complained Lesko and other property owners. They have the power through the so-called CC&Rs--the; covenants, conditions and restrictions--to tell homeowners both what is expected of them and what will not be tolerated. They may spell out, for example, what color you can paint your home, what kind of vehicle you can park in front of it and whether you can have a basketball hoop.
“An association can recover a legal assessment,” said Lesko’s attorney, Paul C. Ward. “But this was not an assessment (for dues), it was a fine and therefore the association didn’t have the authority to file a lien against her property.”
Richard P. Neuland, an attorney representing Lesko’s homeowner association, disagreed.
Neuland, who declined to answer questions on the telephone, responded in a letter to The Times that most homeowner associations use the “first-in, first-out” accounting method, applying payments on a homeowner’s account to the oldest bill.
Most members in a homeowner association expect and want the board to make the violator, rather than the community, pay added expenses for work done on a particular homeowner’s property, he said.
In addition, Neuland said, use of one account for association dues and another for payment of landscaping charges “would create a huge increase” in the homeowner association’s administrative expenses.
Lesko’s lien is now about $2,300, which includes delinquent dues, interest charges and attorneys’ fees.
Lesko, 43, who works for a temporary job agency, said she cannot afford the lien or the most recent settlement offer of $1,500, which was made by Association Management & Maintenance Co., the management firm for the association.
Because of the lien, she has had trouble renegotiating a mortgage loan with a lower interest rate. Now she just wants to sell the property, but that may mean paying a large settlement figure.
Martin L. Lee, a Newport Beach attorney who has represented both sides in association-homeowner disputes, said that while foreclosure is sometimes threatened, it infrequently takes place in contested claims of CC&R; violations.
“Foreclosures are occurring,” Lee said, “but they’re happening where homeowners simply don’t make the payments to the association. The value of property has declined and times have gotten worse in the last few years and foreclosures because of this are increasing.”
Lee said these battles often involve personality conflicts, and people fighting for what they believe.
“And that’s the worst internecine kind of battle,” Lee said. “I’ve represented both sides on these matters and for every such dispute you find heavy-handedness sometimes on the part of the association, and, sometimes, you find a degree of unreasonableness and stubbornness on the part of the homeowner.”
Lee said he recalled one dispute about a homeowner who wanted to park his recreational vehicle next to his condominium. The association said no. The homeowner sued, only to lose and find himself facing a judgment for the association’s attorney fees of $37,000.
Another case involved absentee owners who refused to landscape their property and fought the association for years, a decision that cost thousands of dollars.
Lesko and her attorney criticized homeowner associations for becoming “judges and juries,” which impose fines, then turn delinquent parties over to law firms that serve as collection agencies.
Santa Ana attorney Kompa has had experience in the homeowner association wars, which he believes are getting out of hand.
“You have these associations which owe a fiduciary obligation to a homeowner that are, instead, deferring actions to law firms that generate fees,” Kompa said.
Kompa, formerly a member of an Orange County community association, has firsthand knowledge of homeowner Angst.
In December, 1989, Kompa received a notice of violation for failing to plant ground cover on a slope. He was fined $150, which grew to $200 for a second fine.
“I, of course, refused to pay the fine,” he said. It was “inconceivable to me,” Kompa said, that an indebtedness that began as a $200 debt could have evolved into a delinquency of $3,493.91. In addition, when he sought the management company’s accounting records, and pursued the matter, they referred his case to a foreclosure specialist who threatened to sell his home at auction.
“If you have a homeowner who wants to challenge the $200 cost, the lien cost, the attorney fees, it can literally go into the thousands of dollars,” Kompa said. “In the end, the homeowner just wants to settle, and that’s expensive too.”
Elizabeth McMahon, a member of Anaheim-based American Homeowners Resource Center, said she recently joined Willowdean Vance, 65, a Lake Forest activist, in successfully opposing a bill in Sacramento that would have made it easier for homeowner associations to foreclose on owners like Lesko.
Vance, who founded the American Homeowners Assn. to help fight for homeowner rights, said that Assembly Bill 1793, sponsored by Dan Hauser (D-Arcata), would have allowed homeowner associations to levy fines with the authority of liens, although the bill’s supporters deny this.
“Technically, many homeowner associations are already doing this,” Vance said. “We call it non-judicial foreclosure because they’re bypassing the courts and putting liens on homes for even trivial fines like for putting the garage door up at the wrong time of day, or fining a lady for cutting grass in violation of restrictions, or putting a basketball hoop on the wrong side of the yard.”
A legislative aide for Hauser, who chairs the Assembly’s Housing committee, described the bill as a “minor one” that cannot be put on the floor this year but can be heard in January.
“It’s not a minor bill,” McMahon said, “because this is how they’ve been passing these bills all the time and they’re taking away more and more of the homeowner’s right to due process.”
Hauser sponsored the bill on behalf of the Community Associations Institute, which represents homeowner associations. Proponents of the bill said the bill helps set a standard for amount of fines and the power of homeowner associations to levy fines. Under the proposal, one-time fines would have a $250 limit. The maximum on continuous violations would be $1,000 or six months’ regular assessments, whichever were greater.
But McMahon said the bill would empower homeowner associations to levy fines, put liens on homes and threaten foreclosure for non-payment “even if the fine was inequitable.”
Vance said the May 12 hearing was abruptly postponed after only one person from her group was allowed to speak against the bill.
As for Lesko, she said she is ready to settle, sell her home and move on.
“I don’t have the money to fight them,” Lesko said. “I want to settle for $1,000 to have the lien removed, so I can sell the home, although I don’t feel that I owe them a penny. I wish I never moved in this place.”
