9,000 is a staggeringly large number. It is the number that HOAs in Arizona are believed to be rapidly closing in on, and approximately half of people who own in the Valley belong to one of these numerous associations in their neighborhood. This is just an estimation however, as there is no department or organization on any local, state or federal level that is in charge of tracking these organizations.
What is more interesting is the fact that there is virtually no tracking or regulation implemented on these powerful organizations by the cities or states, really throughout the nation – and that they are run by people who have no training or licensing requirements to meet.
This is becoming more of a problem here in Arizona, where it is plain that bad HOAs are becoming prominent. HOA boards are made up of homeowners. They volunteer their time to be on the board, and there is absolutely no training, licensing or education requirements to serve on these boards. Though the boards make all policies and decisions for the owners in their HOAs, from paint colors to pets allowed, and so much more, they generally hire people to actually manage their communities. These managers often also have no training or requirements. There is no public record of the HOA boards documentation from decisions to financial. It is the perfect place for someone with malicious intent to take advantage of a precarious situation.
At best estimates, approximately half of all Phoenix-area based residents live in a HOA. Upon their closing, some of the piles of paperwork being piled in front of them to sign are known as CCR’s or Covenants, Conditions and Restrictions. With all that they are reading, few are reading exactly how much power HOAs have on their homes, including the right to foreclose for unpaid accrued HOA fees. On the rise since 2015, over 3,000 homes have had foreclosure proceedings started on them by their HOAs, for unpaid maintenance fees totaling $1,200 or more.
Even more scary are cases like the recent one against Karen Whiting who owned Method Real Estate which is one of many community management associations – who HOAs turn to for management of their neighborhoods. In mid-January of this year, Whiting was sentenced to time in prison for stealing upwards of $300,000 from 4 separate HOAs she was responsible for managing. The money was used for her own personal gambling debts. Within the communities she managed, utilities and services were threatened to be stopped to the residents for lack of payment – though they had all been paying their fees.
With the popularity of HOAs, many are pushing for reform. Municipalities, cities and states like HOAs because they take care of neighborhoods and deal with monetary issues that if they fell to the local governments would push already tight funds and budgets to the limit. Letting them be virtually privatized government with no training, licensing or education requirements, and absolutely no accountability to anyone is not the answer. Hopefully there can be a middle ground found to protect Arizona homeowners.
