HOA Living

It is estimated that about 74 million people or about 30% of the population live in HOA communities. Including present time, I live or have lived in five in four different states. This includes being HOA Board Chairperson in mountain resort in Montana. This has given me some perspective on HOA living which may be of interest of others.

Best Parts of HOA Living
My first HOA was with townhouse which we bought in Fargo, ND when I still owned my firm. When I realized the first time it snowed and I did not have to shovel at minus whatever degrees, I knew HOA living was for me. In the summer when the grass got too long, I would go to work and come home and it was freshly cut. Wow, who knew? For me, HOA living first in ND, then MT and now MN and without worrying or having to do winter snow/ice removal and groundskeeping in the summer is awesome. Being in an HOA in Oro Valley, AZ, it’s more about year round landscaping and pest control. [Insects and bugs, not the other.]

One of the best parts of HOA living is many home ownership responsibilities are being done by someone else. Your paying for it, but some else is doing the work. As a lazy unhandy person, this is the dream for me. HOA’s give the owner more time for other stuff.

HOAs which cater to retirees and pre-retirees in addition to providing an enjoyable campus, provide of activities, lots and lots of activities. Most of the people I know in my AZ HOA are busy day doing activities every day. It’s like be in a perpetual summer camp for adults except the adults get to elect their leaders.

Buying into a Set of Rules
When you buy into an HOA you accept the HOAs governing documents. In MT we called them By-Laws and Rules and Regulations. I often hear owners complain about HOA rules. Suck it up, you made a decision to buy into the HOA. If you do not like a particular rule try and change it. If you cannot find enough owners to agree with you, the problem may be you.

Who Owns and is Responsible for What?
Understand in your HOA what do you own and is your responsibility and what does the HOA own and is their responsibility?

A major problem I inherited when I was elected to the HOA Board in MT was we had a huge roofing problem. Specifically, the roofs were old and many leaked in the winter primarily from ice damns. Since the roofs were owned by the HOA any damage to unit’s interior was an HOA responsibility. And some years there was a lots damage.

At the Annual Meeting in which I was elected I was unable to attend due to visiting family. Found out later the meeting was very dysfunctional and some owners were actually yelling at each other when discussing the roofing problem. The consultant said later he was actually afraid he would not get out alive.

Some owners did not feel we had a roofing problem while others needed the problem addressed as soon as possible. At every Board or Annual Meeting when an owner said his/her rood did not leak, I would patiently explain, you do not own a roof. You are part owner of all the roofs. If someone’s roof leaked on the other side of the campus, its your problem just as if the roof on your unit. We initiated roofing committee which were public, brought in consultants, showed pictures, [HOAs are little like kindergarten] and within a couple of years we had a fully funded roofing project going. And we went with “cold roofs” which are the highest priced, but also the best roofs for mountain resorts. It was part of the education process.

Being and HOA Board Chairperson is a Stupid Unpaid Job.
I was elected as Chairperson five minutes before my first Board Meeting because the previous Chairperson resigned. As Chairperson of five minutes I said we would there would be no public comment until the end of the Meeting and only if time. Shortly into the meeting while discussing one topic, one owner jumped and started to express her opinion. I politely said no public comment until the end of the Meeting. A bit later later the same owner jumped in again to loudly express an opinion. I again said no public comment until the end of the meeting. The owner than said looking at me, “what do you have against me?” I said nothing, I’ve never seen you before, its just were not going to have public comment until end. A few days later I found out she lived across the street from me. Awkward.

Another thing I did during the meeting was ask to owners who were continually whispering to leave. They were both annoying and impolite and it does make it difficult for others to hear. They agreed to stay and refrain from talking to each other. I assumed they were there because they had been kicked out of kindergarten.

While Chairperson the next few years I spent between five and twenty hours a week on HOA business. It really is a dumb unappreciated job.

Each Board and Annual Meeting I started the Meeting with the phrase “thoughtful intelligent people can disagree without being disagreeable“. Since very few if anyone want to be know as neither thoughtful or intelligent, meetings were very respectful.

Some of the stuff a Board deals is routine, other times not so much. A few months after become Chairperson while traveling for business our on site manage called me to tell me one of the renters of a small percentage of the HOA, had just threatened to shoot a painter who was17-years old. Prior to the painting, we had not only sent emails to all owners but also put notices on doors with the schedules. The renter just decided 8:00 AM was too early to start. Did I take is seriously? In today’s world, absolutely. Was it addressed and solved, yes. Did many in the HOA know, no.

HOAs Dysfunction
Every HOA I have belonged to has had some dysfunction at some time or another. Sometimes the disfunction is real and needs to be addressed. Other times the dysfunction is from a few owners who are unhappy for one reason or another and may related to wearing underwear two sizes to small putting pressure on uncomfortable places which can lead to grumpiness.

If an HOA has 250 members, and 25 are unhappy, that’s only 10%. If an HOA has 2500 members and 250 are unhappy, its more in numbers but still only 10% of population. By comparison, a survey a couple of years ago found that 7% of the population thought that chocolate milk came from brown cows.

So how does one know if the dysfunction real or pretend. If the unhappy owners can point one or more specific violations, then it can be real. If there are personal attacks on the Board, management company and other owners who disagree with them, then its pretend.

If it is a disagreement on finances and outlook that is a good thing. As long as the debate is thoughtful, intelligent and has supportable positions that’s healthy. If the debate is “I’m right, your wrong”, participating in that discussion is a total waste of time.

A thought on HOA finances. I would suggest if the HOA fees are not increasing the quality of the campus and life will decrease. This may lead to a decline in market values which affect owners overall personal wealth. HOAs need to be not only addressing today, but planning for the future. New buyers put HOA fees into the decision to buy, but I would suggest more important, they are looking for quality of life, quality of campus and activities available and the facilities for them.

Too often I will hear owners say they want to save money. My first thought relates to the roofing project in MT. It could have been done for over a Million less dollars five years earlier. Saving money literally cost the HOA over a Million dollars. Some owners who want to save money can be very expensive.

HOA Management
In addition to the BOD, HOA’s have some type of management. Most hire outside HOA managers, some that are large enough have internal management akin to small town and some are do it yourselfers. I have been in all three.

HOA managers have a lot of responsibilities and should be judged on their overall services and performances. When I became Board Chairperson in MT, it was clear that the HOA manager who I liked and liked me, at least for awhile, had to go for a number of reasons. Fortunately they saw the writing on the wall and resigned. We did a search and hired a new company. Though our management fee went up, so did the services they provided and overall cost efficiency improved. Any HOA member who just looks at cost is likely missing the big picture.

Recently, one of the HOAs I reside the management provided an opinion as fact, twice. Once is bad, twice is not acceptable. The primary reason is once this happens some if not many of the owners lose confidence in management and then the Board. When elected the Board in MT, it was clear many owners had lost confidence with the management company and it needed to be addressed.

Finally, when I was in an HOA leadership position, I told owners I believed the BOD and Management company have four objectives. The first three include maintaining and improving the campus, quality of life for owners, and appreciation of units. Number four is too often overlooked but extremely important, especially for long term appreciation. It is having a long-term outlook for 5, 10, and 20 years. This incudes planning and funding deferred maintenance along with improving the campus. I believe HOAs who do not do so, will lose the competition battle to other similar HOAs for market appreciation.

The HOAs to which I belong in MN an AZ are different, neither perfect, but both provide quality lifestyle, activities, and campuses. The BODs are striving to do a good job for the owners. There will be problems and disagreements and that’s ok. But for owners who are living on a nice campus with lots of amenities/activities and still are perpetually unhappy and complaining, check your underwear size, it may be too small.