Despotism Thrives Close to Home

Despotism and secrecy are not restricted to the corridors of Congress, state legislatures or city halls. Despotism is alive and flourishing where you wouldn’t expect to find it--in homeowners associations.

Cities love them. A developer builds a tract, adds a few amenities and turns over all the responsibilities of maintenance for the tract to an association. Cities don’t have to pay for landscaping, gardeners, water or maintenance. Homeowners associations do all that for them, and the cities get the property taxes.

And thus Pleasant Acres Community Assn. is created. Soon Mr. and Mrs. Gullible enter the picture. They see the swimming pool and play equipment and say, “Johnny and Susie will love this.” They envision happy dinners on a moonlit patio and believe the Realtor’s pitch about how wonderful life will be.

They arrange a mortgage, sign the agreements and move in.

Then one day Mr. and Mrs. Gullible receive a letter from the board of directors saying the pool has to be fixed and a $1,000 assessment is due next month; also, the monthly dues have been raised 20%. Mr. Gullible is not happy about this and calls the president of the board to ask to see the financial records. He is told he can’t see them, and besides, he needn’t bother because the decision has already been made. In fact, don’t stick his nose in, just pay up.

So Mr. Gullible calls his lawyer, who tells him his only recourse is to sue, but it would be futile and costly because he would certainly lose the case, so it’s best to pay or the association can begin foreclosure on his house in 90 days and charge him legal fees to boot.

Can this happen? Yes it can, and it does, and it is legal in California.

Mr. Gullible is not a happy camper. The next week he is opening his mail over the green recycle bin when Mr. Wise, a neighbor, walks by and asks “Why so glum?”

Mr. Gullible mentions a new $100 monthly assessment for nonconformance and says, “This smells like dictatorship. Can’t we do anything?”

Mr. Wise tells him the following. Unfortunately most homeowners aren’t aware of this eroding of their freedom until it hits them personally. Although homeowners associations are legally private corporations, they are actually private governments without any checks and balances. They get a lot of power from the Davis Stirling Act. We need to change the law to focus on the rights of homeowners, not management companies, vendors and lawyers.

Davis Stirling, part of the California Civil Code pertaining to associations, gives boards power to disregard agreements. We also need association reforms to guarantee secret ballot elections, access to all association finances and records, to prohibit foreclosure as a penalty, and prohibit overriding agreements without a vote.

Somehow, even though we don’t have funding for lobbyists, we must convince our representatives to represent us homeowners, not the agents for property management companies. And then the floodlight of democracy will begin to shine through the murky waters clouding homeowners associations.