Homeowner associations in Missouri and across the U.S. were created by developers to control home use and homeowners until much of the development is complete. HOAs are then typically turned over to homeowners with all of their powers intact. These powers are at the heart of a growing number of lawsuits that allege HOAs are committing fraud, harassing homeowners and over-reaching their authority.
The Kansas City Star reported on a case involving a veteran of the war in Afghanistan who lost a leg there. He has post-traumatic stress disorder and gets around with the use of a wheelchair. His HOA has fined him repeatedly for his fence, yard edging and setting his trash cans in the wrong spot, which he says is easier for him to manage. After he ignored thousands of dollars in fines due to these infractions, the HOA placed a lien on his home.
Additional cases across the country involving embezzlement and fraud include:
- A husband and wife team in Florida who managed an HOA used $340,000 from the association's coffers for personal expenses
- An HOA officer in Kansas City who siphoned off more than $100,000 of HOA funds for her own use
- A manager of several HOAs in Alabama who stole more than $350,000 from various groups using phony invoices that paid her personal design company for phony services
- A condo association manager in California who embezzled more than $2.8 million from her HOA
Missouri legislators introduced bills this year in both the state House and Senate, according to the HOA watchdog site Independent American Communities. The bills were intended to make HOA business operations and finances more transparent and more responsive to homeowners. The Senate bill was even dubbed "The Homeowners' Bill of Rights."
The bills make some attempts to allow homeowners more insight and oversight of their HOAs, but there is little meat in either to improve situations for homeowners. In fact, the bills seem to solidify the abilities of the HOAs to continue doing business as usual. At any rate, there is no help for homeowners coming anytime soon; both bills died in committee. That leaves homeowners with an all-too-common complaint that the only way they can defend their rights is to initiate litigation.