Beware of communities with HOAs

September 3, 2014

The events which resulted in our move to Sussex County last year originated from our desire to be free of involvement in a homeowners association. The challenge of finding property, building a home, selling a home, moving, and starting anew were all dwarfed by our desire to rid ourselves of involvement in an HOA.

The problems associated with HOAs are many, and the issues involving HOAs can be very complex. Before making a decision to move, I spent years trying to resolve problems in our HOA. During the last year prior to our move, I was very involved with the press, the Kent County Levy Court, and the state. My actions proved futile.

There are two main problems facing anyone who lives in an HOA community in Delaware. The first has to do with both the state and county looking to avoid responsibility for things which I believe they should be responsible for. These include drainage management and snow plowing, with drainage management being the most important by far. The second problem facing members of HOAs has to do with a legal structure that is almost unique to Delaware - I am referring to Chancery Court.

Politicians passing the buck and avoiding responsibility is not something unique to Delaware. Chancery Court is another matter, and I think most Delawareans have no idea what Chancery Court is and how it relates to them personally. HOAs are corporations, and all legal matters concerning corporations fall under the purview of Chancery Court.

Simply put, there is no simple, cost-effective method of addressing an internal HOA matter in court. If the board of your HOA becomes a problem, you can either go to Chancery Court or vote new members to the board. Voting new board members into office can be very timely, and can be like locking the barn doors after the cows have left the barn.

When you move into an area covered by an HOA, you are entering into a legally binding partnership with all of the other homeowners in that area. You are financially responsible for your share of the costs incurred by the board of your HOA. The people on your board may have no knowledge of business, accounting, stormwater management, etc.

There are no requirements for board members becoming board members other than getting elected. In most HOAs there is a problem finding people to run for the board.

Here are two facts: If there is one member of your HOA who is not paying dues, your HOA is in the process of failing. In Kent County, it was not uncommon for a third to a half of HOA members to be delinquent in their dues. Second, your property values and financial well-being are directly related to what happens within your HOA. The value of your home can be degraded by an incompetent board. Your financial liability can be greatly increased by an incompetent board.

My advice to people is to avoid HOAs. For those who wish to move into areas covered by an HOA, the best advice I have is that given to people looking to buy a yacht - if you have to ask how much it costs, you probably can’t afford it.

Brendan Buschi



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