Hello, neighbor!
Time again for one of my favorite topics: homeowners associations, or HOAs.
The HOA Information Office and Resource Center just released a year-long study of Colorado’s HOAs. Results are not pretty.
The HOA office fielded 3,053 inquiries, of which 478 were complaints.
Guess what area produced the highest number of complaints.
The Pikes Peak region, of course, with 21 percent of all complaints!
Are we a bunch of whiners, or what?
Not really, says Aaron Acker, the Colorado HOA Information Officer.
“We started with the presumption we’d get a lot of ticky-tack complaints,” Acker said. “We were wrong. Most of the issues were major ones.”
Complaints like HOA boards and managers hiding financial and governing documents.
“Transparency is a big issue,” Acker said. “Homeowners trying to get information are getting significant blow-back from their management companies or HOA boards.”
Aaron Acker, Colorado HOA Information Officer, spoke to a group of Pikes Peak region property managers and HOA board members on Feb. 15, 2011.
“People want to know what’s going on with their money. And HOA boards have a legal obligation to produce records at the behest of members. But we’re seeing a lot of complaints about them not responding, producing incomplete records, fighting requests or charging very high fees for documents.”
Access to HOA board meetings came up often in Acker’s study, as did failure to listen to homeowners — whether by property managers or HOA boards.
“These are pretty major issues, in my estimation,” Acker said.
Acker and his office were created by the 2010 Colorado General Assembly.
Upon opening the office last January, Acker was told to find and register all Colorado HOAs.
(I used that abbreviation to describe single family resident neighborhoods, condo and townhome associations, voluntary improvement associations, property owners associations.)
So far, he has registered 8,037 asssociations, representing 838,211 homes, condos and townhome units and 2 million residents.
Colorado Springs and the Pikes Peak region are grouped in the South Central category, which has 661 registered HOAs. That’s about 8.2 percent of all HOAs registered. In other words, that 8.2 percent accounted for 21 percent of all complaints!
(Industry experts believe upwards of 25 percent of Colorado HOAs remain unregistered.)
Acker said he hopes HOAs will use his findings as a wakeup call to reform how they interact with homeowners.
Lawmakers are digging into the data, as well, and likely will use it to decide whether it’s time to license property managers or give Acker greater power to police HOAs. Stay tuned!
Here is a link to a column and blog I wrote recently about the issue of licensing property managers.
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The majority of the complaints relate to the activities of the boards of the various HOAs. They are the ones who make the decisions that affect the owners in their communities. They are the ones who adopt the rules and enforce them. The manager does NOT make decisions or adopt the rules. But there is probably no way to regulate boards, so people turn their attention towards regulation of managers, mistakenly believing that this will change the paradigm in some appreciable way. Of course, it will not. It will, however, add another layer of governmental interference in our lives, and give people the false impression that they are, in some way, “protected.”
Even the complaints against managers are really against the boards, but many homeowners perceive the manager as the bad guy for doing the board’s bidding. Managers could help themselves and their profession a lot of good by standing up to boards when they attempt to over-reach or to make poor decisions. They could step up and advocate for homeowners when this is warranted. And they could warn the boards when they attempt to take action which is either illegal or unauthorized by the governing documents (usually the covenants). But they don’t. They sit there and let the boards do as they please. They are fearful of doing anything that the board may perceive as against its wishes, even when such action is clearly warranted. Then the managers shrug it of by saying “I was just doing as the board instructed me to do.” As a professional manager, I can tell you that this is a major cop-out, and leads to more problems than stepping in and doing what is right by the community. That, I think, is the manager’s job; not just to be a mouthpiece or puppet for the board. Manager licensing will do nothing to change this paradigm. But regulating management companies could.
In 1989-90, the husband and wife team who managed Peachwood Homeowners’ Association in Aurora embezzled $50,000.00 from the association’s reserve account. They were apprehended, convicted, and made to pay restitution. And yet, the wife had CAI’s highest designation, the Professional Community-Association Manager, and was the President of the local chapter in 1988. No action was ever taken by CAI against her, and, in fact, she and her husband moved to Las Vegas, where they set up shop under a different corporate name. I attempted to alert the Las Vegas Chapter of CAI, but was told that it could not take any action based on my say-so for fear of defamation. Do not insult anyone’s intelligence by saying that manager licensing would do anything to stop this type of behavior.
Licensing, in and of itself, would do nothing to increase the “professionalism” of a manager, as claimed. All it means is that an individual has gone through the process, obtained the necessary credentials, and paid the required fee. Licensing may, however, impart the impression (sometimes incorrectly) that a manager is more “professional.” True professionalism, however, can be demonstrated only by an ongoing and proven commitment to the industry and to communities by a manager who has a consistent track record of service and ethical behavior. It is up to each association to seek out and engage the management services of such persons.