“If money go before, all ways do lie open.” — William Shakespeare
Does this scenario look familiar: a land developer, concerned with making profit on the investment, records it as a planned community and institutes typical bylaws and CC&Rs (Covenants, Conditions and Restrictions), written in hard to understand legal language and heavily centered around maintaining common areas and paying assessment fees to service them.
Then the developer advertises the project as a community “with reasonable CC&Rs and no association dues.” Most people find it attractive and, driven by affordability and attractiveness of the location, buyers follow. Soon enough, they learn that, in fact, they were deceived at purchase, and there are no common areas or any shared property at all; the CC&Rs enforcement did not happen or, at best, was selective and biased. Even worse, the owners are mandated to pay arbitrarily determined assessment dues, spent entirely on bureaucratic needs of the homeowner’s association (HOA). Transparency is nonexistent, benefits are invisible, and, like in a famous humorous story, for its address, the HOA names a vacant lot. To add to the confusion, the board renames the entity to AOPO to leave everyone wondering if it is Agent Orange Project Office or Association of Organ Procurement Organizations.
As properties get sold, the developer leaves the HOA behind and withdraws from the project, “forgetting” to record the factual absence of common areas or to remove his outdated “no dues” advertisement. He might still linger around if there is a remaining financial benefit in any form, for instance, collecting fees for architectural design review, though the developer is neither a designer nor an architect.
When puzzled owners ask about the HOA’s documentation and finances, or question the board’s need for expensive software, professional management, legal support, and additional insurance, their concerns are ignored or dismissed. The only response owners receive is the snippets of rules from the outdated deceptive bylaws and demands for prompt payments with threats of liens, foreclosures, and additional legal fees. These unsolicited demands have become especially frustrating throughout difficult COVID-19 time, when people are mostly preoccupied with survival.
Additional problem arises when board directors and their supporters display their own serious “violations” in plain sight of the neighborhood. Obviously, they don’t care that it is ethically wrong to control others from a position of however dubious power if your own property is not without issues. Some owners with “violations” quickly figure out they have to “pay the mafia dues to be left alone.”
All others have to seek legal guidance and quickly learn that Hawaiian Revised Statutes (HRS 421J) mandate planned community associations to own and maintain certain property for the common use or benefit, or both, of the owners of units within that community. The law clarifies that “assessment fees are administered with the purpose to maintain that common property and provide services.” Furthermore, “common area” means real property within a planned community, which is owned or leased by the association or is otherwise available for the use of its members. HOAs with zero common property, misspent assessment fees, proxy and voter fraud, and decades long CC&Rs nonenforcement fail to meet the basic requirements of the state law. They are questionable business entities paying the annual registration fee to stay viable. Without any common areas to enjoy and maintain, membership and dues in such entities cannot be forced on unwilling homeowners.
At the owners’ expense, the HOA board also seeks advice from property managers (often not licensed in the state of Hawaii), lawyers, and some friendly real estate agents, who have figured out how to keep mostly elderly owners either obediently paying the imposed dues or selling their properties. They go as far as to write additional “rules” and “fine schedules” for the communities, and to harass the dissenting owners with threats and suggestions to move. They insist that HOAs, even the ones without any common property, are vital to everyone’s well being and to values of our homes, though other than statements of the interested parties, there is no reputable independent research to prove that it is so. Neither in Hawaii, nor elsewhere in the United States, homeowners residing on public streets ever complained that their property values suffered because they did not have an HOA.
The owners feel forced and threatened into that scam, but are often too busy, tired, unable, or preoccupied with health and family matters to respond with adequate force and numbers. They ask the county and legislators for help, but receive none because, strangely, there is no agency or mechanism to keep the checks and balances on HOAs in single-family home communities. With complete lack of oversight and consequences, unscrupulous and unjustified businesses operate and prosper where they shouldn’t even exist.
The question remains open-ended: who will stop lawless HOAs in Hawaii?
Olga Alvord is a Kona resident.
