More excerpts from the first part of this 2014 book including bringing up CAI.
Shockingly, most homeowner associations are run by unpaid, untrained, and unqualified volunteers who are overwhelmed in managing their share of an annual $90 billion industry. (page vii)
In 2003, television celebrity Ed McMahon settled a toxic mold lawsuit for $7.2 million. After a water pipe burst in his 8,000-sqyare-foot, six-bedroom Beverly Hills mansion, McMahon’s home became contaminated with a toxic black mold. (page 60)
As a result of the proliferation of lawsuits, most insurance companies now exclude mold coverage from their policies. (page 61)
Not to be outdone by foreclosure syndrome, in 2009, psychologist Dr. Gary Solomon, a tenured professor in the College of Southern Nevada, coined the phrase, “HOA syndrome.” Dr.Solomon observed patterns of ailments among some members in homeowner associations who have experienced abuses by their boards of directors, association attorneys, or management companies, including a cluster of symptoms ranging from depression to paranoia. )(page 88)
According to the Community Associations Institute (CAI), a national organization dedicated to fostering harmonious community associations, homeowner associations now govern 23 million American homes and nearly 60 million residents. For nearly 40 years, CAI has been the leader in providing education and resources to volunteer homeowners who govern community associations and the professionals who support them. IN the 1920s, the forerunners of modern homeowner associations sprang up amid the luxury-home subdivisions of the wealthy in America. The deeds to these exclusive homes included what became known as restrictive covenants that prohibited owners from selling their property to anyone other than white people….In the 1960s, the Federal Housing Administration (FHA) promoted the homeowner associations (HOA) as a way of providing affordable homes to large numbers of people. The FHA issued guidelines and standards that required planned developments to have a nonprofit homeowner association with mandatory membership in order to obtain FHA mortgage insurance. In 1962, there were fewer than 500 homeowner associations in the entire nation. But the number of them has skyrocketed in the last four decades. (page 99)
The Community Association Institute was established in 1973 to bring together all groups that had an interest in promoting HOAs and provide guidance for them. However, consumer advocates say the CAI gradually became controlled by the property management and law industries. Since 1980, the overwhelming majority of new homes built in the United States were erected in developments governed by an HOA that owners were required to join. Today, there are nearly 325,000 homeowner associations nationwide. In the 1990s, the CAI was reorganized as a 501(c)(6) tax-exempt nonprofit business trade organization whose primary mission was to lobby state legislatures. Today, the majority of its members are community associations, property management firms, and attorneys. (page 100)
For many, what was supposed to be a dream turned into a nightmare. Stories of shoddy construction, unending special assessments, and excessive and expensive litigation abounded in the fast and furious world of “Mondo Condo.” (page 107)
Although cooperatives exist in a number of American cities – from Baltimore to San Francisco – a disproportionate share of coops exist in New York City. While only 10 percent of the nation’s housing are cooperatives, the vast majority – approximately 80 percent – are located in Manhattan alone. So it is no surprise that some blue-blooded New York coops require residents to be listed on the New York Social Registry. (page 109)
By the early 1980s, the Chicago Consumer Services Department was receiving a steady stream of complaints about condo boards that held secret meetings or stonewalled members who wanted to see financial records. (page 129)
The apathetic state is characterized by an entrenched board that rarely turns over its membership from year to year. The board’s authority increases over time to the point of dictatorial control, and the board seems to answer to no one. Often the apathetic owners are investors or second-home or vacation home owners and they barely pay attention to the activities of the association. There is little discussion or dispute among the owners and little political activity. This type of board primarily serves the interests of its own board members. Although elections are held, typically the entrenched board members are reelected and control never shifts. A healthy association will avoid these extremes and will attempt to remain in the political stage, where issues are handled in a positive, democratic way. If anarchy reigns, with board members and owners constantly battling each other, the association will never be healthy. (page 146)
Unfortunately, many condominium board members are not real estate professionals, and often they are not familiar with the law. A major responsibility of condo managers is to keep boards educated about fair housing laws. Failure to do so can be costly to board members, the association, and the condo manager if a discrimination suit is filed. (page 151)
On the other hand, some non-transparent associations are now seeing the rise of a new breed of association related websites. Today’s disgruntled owners are using the power of the Internet to set up websites where they can voice their concerns and expose board behaviors – whether it’s discrimination or “selective enforcement” – to the Internet world. (page 154)