In an industry that harbors some pretty infamous characters, some members of the Board of Directors and its committees (your neighbors) are likely to be among the most menacing on a day-to-day basis. There are several reasons why this form of private government runs counter to the principles of good democratic government.
Once the developer has sold nearly all of the homes in the subdivision, he will turn the association over to the homeowners who are supposed to elect a Board of Directors. The process is supposed to appear democratic but HOA "elections" are incredibly easy to steal. The purpose of the Board is to oversee the maintenance of the common area and uphold the CC&R’s. However, I think you will find in most HOA’s, maintenance comes in a distant second to covenant enforcement, which can become an absolute obsession.
The board has a fiduciary responsibility – a trust to act in the best interests of the association and its members and not in an arbitrary and capricious manner – but there are numerous accounts where just the opposite happens. Many times homeowners have no time for, or interest in, neighborhood politics and this situation creates a void, which will attract those most likely to abuse these positions of trust. The ruling group oftentimes seems to attract homeowners who, for whatever reason, have a great deal of time on their hands and a distinct inclination towards adversarial engagement.
The characteristics of this powerful form of corporate governance….
(1) The CC&R’s provide board and committee members powers that would make any totalitarian dictator smile with approval.
(2) No experience is required and there are no minimum levels of education or competency, just a measurable pulse.
(3) Board members escape responsibility from their actions while serving as a board member and the association attorney is there to defend them.
(4) Board members can bring suit against a homeowner for almost any reason and the association members pay all their legal expenses.
(5) In the HOA private corporate government, there is no system of checks and balances. Board members simultaneously occupy the legislative, judicial and executive branches with absolutely no local, state or federal oversight. In disputes with homeowners, the board acts as accuser, prosecutor, judge and jury.
(6) Board and committee members often tend to impose their own personal standards of neighborhood appearance by micro-managing your property through means of creative interpretation and embellishment of the CC&R’s.
(7) The homeowners are sitting ducks!
The CC&R’s make no provisions for democratic principles and the Board is not obligated to recognize them. For that reason, homeowners should take a keen interest in those who seek a seat on their Board of Directors and maintain oversight of their actions and the actions of the committee members.
Sources of Information:
My experience as:
An elected HOA Board of Director member
As chair of an Architectural Review committee
Other blog postings
