In which community would you rather live??

I was recently reading a post on a very popular business networking website (you know, the one that asks you to “link” with other professionals!).  The post came from the board member of a homeowners association.  The board member asked, “We have one Owner 15 days passed due with his Special Assessment should I turn it over to our Lawyer and start charging daily late fees?”

That isn’t a typo, the question was should an attorney get involved because someone is fifteen days late.  Note, he/she also asks if they should start charging daily late fees.

The first two responses came from community association managers.  Here, in the exact order of the postings are their comments:

Response #1

“Not no but heck no. Even the evil-ones at megabanks won't even try something that aggressive. Actions like that make for tense and unhappy association. There are times when collections efforts are needed but it should take months to get to that point. Not days. Translation - be neighborly.”

Response #2

“It's not your money. Neighborly has nothing to do with it. When the special assessment went out it should have had deadlines and information on what would happen "IF." Follow the "IF," or contact the Board for their direction. I'd rather have someone no [sic] like me for doing my job then for NOT doing my job.

What state? In Florida, generally anything past 10-15 days can be considered as delinquent. A reminder is sent, then if past 30 days referred to the Law firm for collections. No [sic] a matter of being non-neighborly, just a matter of business.
During this 30 day period, the Unit owner can writew [sic] to the Board regarding any circumsatnaces [sic] that will allow the Board to consider a payment plan; however, they have to be careful not to set a precendent [sic] that would affect all Unit owners. (I left in the misspellings in this posting because I wanted you to see that the writer made the response so quickly and possibly without careful thought, that there were several misspellings.)

Let’s step back for a moment and think about why we even have homeowners associations.  First, as developers began to build communities consisting of several homes, the necessary government permits and approvals came with a price tag.  The governmental entity would allow the construction if the developer took on the costs and the subsequent maintenance of certain infrastructure necessary for the community, such as drainage, stormwater management, or street lights.  The developer happily accepted these requirements because they simply passed the future responsibilities and costs to maintain onto the subsequent home purchasers.  They filed restrictions in the Public Records that attached to the land that ensured that all future owners of the property would be responsible for these facilities.  They also established non-profit corporations, referred to as associations, that would be run by the homeowners who would be responsible for overseeing that money was collected from the owners and the maintenance was performed.

Then the developers began to see a market that many people found desirable, living in a community in which all of the houses and yards would be consistently maintained and free from junk and decay.  So the developers began to add to the restrictions in order to help “protect property values.”  The right to ensure this protection finds its roots in the original U.S. Supreme Court cases that upheld zoning laws (and other similar laws), finding that municipalities held “police powers” that could be asserted for the protecting the public welfare, health and safety of the community, which included passing laws putting restrictions on what can and can’t be done with ones own real property.

The problem then became, how do we enforce these restrictions that are suppose to ensure that we retain our property values?  Associations then started to charge fees to pay for the community’s obligations and a whole new cottage industry emerged consisting of community association management companies and lawyers, whose sole purpose was to ensure conformity and to ensure payment of the assessments necessary to ensure conformity.

The question is….do these restrictions really protect our property values?  Is your property really going to lose its value because your neighbor painted their house orange instead of beige?  Are people not going to want to buy in your community because the guy across the street parks his car in the driveway instead of the garage?  Maybe, but then again, maybe not.  Certainly some people only want to live in perfectly maintained homes and communities that ensure this quality is where these people will seek to live.  On the other hand, some of the most desirable and highest valued homes today are in old, urban neighborhoods that have gone through a massive revitalization but where there are still some homeowners that have no intention of renovating and updating their homes.  These neighborhoods see multi-million dollar homes built right next to 1950’s style houses that haven’t been painted in over 30 years!  The owner of the multi-million dollar home may not like that the neighbor's house is old and in decay but they don't care because the are is the new "hot" community and people are paying high prices to live there.

I pose this question, if your primary purpose for living in a specific neighborhood is to maintain your property value, wouldn’t advertising that your community is run by a “neighborly and friendly association” be a good marketing tool?  Isn’t there a market for people who want to buy a new home, within a nice community with rules and restrictions but one that is run by people who are reasonable? Why do we believe that a house that is painted orange will lower your property values but overzealous associations do not? The second respondent to the post (above) states that you don’t want to set a “precedent”!  But what precedent are you setting?  That you are understanding and willing to be neighborly and work with people?  That you are not unreasonable, unyielding and intolerant of a possible oversight or worse, personal crisis that resulted in the missed payment?

To be sure, many, many people simply stop paying their required dues because they are either in a fight with their association or they simply are playing games.  But there are also many, many people who have very good reasons for missing one or more payments.  Imagine your community having a newspaper article written about it because the community showed compassion for a neighbor.  Then imagine your community having a newspaper article written about it because you went forward with foreclosing on someone’s home because they were delinquent in paying their yearly association dues of $175.00 (I chose $175 because of a recent mediation that I facilitated – stay tuned for my next post).  In which community do you think prospective home purchasers would want to live?  Do you want to live in the community that is managed by poster #1 or poster #2?

As always, stop and consider talking to each other and if you can’t resolve the issue then consider calling a mediator.  If it still can’t be resolve, that’s when you should call your attorney.