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My descent into HOA hell in North Carolina

Those amenities come at a price. Those buying real estate in North Carolina are forewarned of HOAs’ existence by a section in the N.C. Residential Property and Owners Association Disclosure Form. As someone who spent a few years in real estate ...

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July 1, 2016 4:54 PM My descent into HOA hell in North Carolina North Carolina needs an HOA Commission similar to the NC Real Estate CommissionOften lawyers, developers and management companies are so intertwined in small communities that getting good independent advice is not easy Must be: gallery" --> $(function () { $(document).trigger("slickgallery.init", [ 29505877, 1, { } ]); }); Robert Willett i By David Sobotta Attempting fall-back value. --> LinkedIn Google+ Pinterest Reddit Print Order Reprint of this Story North Carolina has well over 63,000 Homeowners Associations, and almost everyone who has lived being regulated by one probably has a story to tellMany of the stories are not nice onesLiving in an HOA community gives you access to amenities that most families cannot afford on their ownThose amenities come at a price.Those buying real estate in North Carolina are forewarned of HOAs’ existence by a section in the N.CResidential Property and Owners Association Disclosure FormAs someone who spent a few years in real estate, I can tell you most buyers ignore it, and some do not even bother to read the covenantsThey seem to think, “How bad could it be?” Many would be surprised that not only can it be awful, it can also be expensiveAfter eight quiet years living in our HOA, I was elected to the boardMy first two years on the board were uneventful, but the third was pretty well a descent into HOA hell.Just as our second year was ending, our developer – who was also our property manager – told us it was going to drop usWe scrambled and took over running the HOA ourselvesIn doing so, we learned just how poorly it had been runWe also got a very good look at how bad it can get when HOAs have to come to grips with problems that were hidden or ignoredOur first hurdle was sending out bills for annual duesWith the help of an accountant, we accomplished that, but we learned that the bills had been done improperly for the first 10 yearsWe hired a lawyer to help us navigate the problemEven so, we spent the rest of the year caught between two sets of homeowners, one threatening to sue us if we enforced the covenants and the other threatening to sue us if we did not enforce every single covenant.As the going got tough, board members kept resigning, and we hired a management company to helpWe found it talked a good game but delivered almost no real helpSix months later, the company resigned when we asked it to do what it had promised to do when we signed the contract.We had many other surprises along the way, like finding out that we had no insurance on our roads or gatesI called the insurance agent to ask how to handle private docks built into our common-area pondShe said, “You have a pond?” Of course we have no insurance on the pond.As the annual meeting approached, the developers who still owned about 20 lots decided to use their proxies to push through what they called “a more flexible board.” This happened even though all the current board members had declined to run for re-electionIt seems the developers needed a relative on the board to make certain the board took care of issues in a way favorable to the developersSince the new board has taken office, we know almost nothing about what is happeningThe HOA seems to have fallen into a black hole HOA ISSUES LIKE FAMILY FEUDS North Carolina needs an HOA Commission similar to the NC Real Estate CommissionOne of the biggest problems with volunteer HOA boards is finding someone who can answer difficult questionsOften lawyers, developers and management companies are so intertwined in small communities that getting good independent advice is not easyWe need someone to make a quick ruling on situations and provide good informationIt is hard to get lawyers involved with HOA issues, which most view as a family feudEven if you do get a lawyer and win a case, you still have to enforce the judgmentThe HOA Commission could provide online training courses for board membersIt could also license HOA management companies and pull their licenses if they violate their fiduciary responsibilitiesDevelopers would also have to be licensed to create HOAs.We also need:? A state-supported way for HOAs to report delinquent dues to credit-reporting companiesGiving people a negative mark on their credit reports would work far better than the current system of liens and foreclosures?  Independent governance of HOAsMany subdivisions have unbuildable or undesirable lotsIn some situations, subdivisions can be stuck with a developer/management company that has enough votes to control the subdivision for a long timeAfter five years, a developer should not be able to cast more than 10 percent of the votes in board electionsAn independent board is the best guarantee of a well-run HOAIt is clear HOAs are not going awayWe need to make them functional so they can get their important jobs done with less pain, or the problem is going to get much worse.David Sobotta is vice president of marketing for WideOpen NetworksHe lives near Swansboro $(document).ready(function () { // Removing empty paragraphs first $("#content-body-16194926-87219712 p").filter(function () { var html = $.trim($(this).html()); if (html == ' || html == ' ') return true; }).remove(); // Taking a subset of paragraphs using offset and maximum var offset = 1; var max = -1; if (offset > 1) { $("#content-body-16194926-87219712").children().slice(0, offset - 1).remove(); } if (max > -1) { $("#content-body-16194926-87219712").children().slice(max).remove(); } // Show dateline field at the beginning of the first paragraph var showDateline = false; var datelineStr = ""; if (offset Attempting fall-back value. --> LinkedIn Google+ Pinterest Reddit Print Order Reprint of this Story Op-Ed if ( allowAdsState && mi.pageInfo.getConf('marketInfo.allow_ads') ) { window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-e', container: 'taboola-below-article-thumbnails', placement: 'Below Article 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