Homeowners Speak Out: Our HOA Sets Debt Traps for Us

It’s disturbing to watch our HOA manufacturing bottomless debt for its members. As home­owners fall into the traps, they feel isolated, frustrated, and confused. You don’t understand what’s hap­pen­ing as your own HOA attacks your financial security. Nothing seems clear. But at our community meeting on May 8, 2023, some brave residents stood up and described their personal experiences. Some had just received their first strange “property violations,” while others were already deep into HOA-manufactured debt. It’s a deliberate process. The various homeowners’ stories “connected the dots.” The pattern of coercion became clear to anyone in the room who was listening.

In this essay, we summarize what was said that evening. Each story fits into a sequence that is profitable for HOA-industry corporations, but is destructive to the “health, safety, and welfare of the residents” (to quote from our HOA covenant). Each story describes one of the four traps that are set, in sequence, by the HOA. The underlined citations in this essay link to just a sampling of a wagon-load of evidence collected over four years–evidence of systematic HOA abuse of its homeowners. (Note 1)

In the first trap, the HOA aims “scattershot” property violations at you. Scattershot citations reveal which homeowners will resist abuse effectively, and which homeowners are ripe for further bullying. It’s a sifting process. (Note 2). Families who speak English as a second language often fall into the second bucket. Anita, a 20-year resident of the community, protested this first trap. She stood up and described three absurd citations the HOA had sent to her: dead flowers in flower beds; mailbox is tilting; and the numeral 8 in the five-digit house number is not to style. Anita contested each one. “Each spring, after the tulips fade, I remove them and plant seasonal flowers. Our mailbox is not tilting. The numeral 8 is from the same font bank as the other numerals.” At the community meeting in May, Anita decided to speak up and protest. (Updates on these cases are in Note 3.)

In the second trap, the HOA responds to you with delays, obfuscation, and/or silence.

In response to an HOA citation for flaking paint on the door frame, Marie and her husband, 12-year residents of the community, decided to install a whole new front door and frame. This home-improvement project became a platform for the HOA to deny the family access to the pool for the summer of 2022. Marie explained, “A home-improvement project takes time, and not every step is predict­able. We filled Architectural Change Form and waited for the HOA’s approval. Only then could we order the door and schedule the work and materials. When the door finally arrived, it was not right. We had to reorder and wait some more. The HOA enforced an arbitrary deadline that was not respectful or fair to us. I would call the HOA and get different answers from different staff members. We do not need the HOA to ‘motivate us’ or ‘punish us’ by denying us access to the pool. We take pride in the appearance of our home. Like every family in Quail Valley, we pay all year long for this summertime facility. We are now scheduling the work, and I fear our boys will be denied access to the pool again this summer.” At the community meeting in May, Marie decided to speak up and protest.

Another example: Mohammad (who spoke at the April meeting on Zoom) recently wrote to the HOA, “As you see in this email chain, recently I had lots of communication with the HOA. I was at the [April] board hearing and explained all the fixes I have made as per HOA notice. I fixed all of them almost 6 months ago. … However, the HOA keeps sending me the same violation letters again and again and now I received a letter that If I don't make my payments within the next 15 days my account will be sent to a collection agency [and] a minimum charge of $450 will be added to my account. I'm trying to work with the HOA but it looks like HOA is only after my hard-earned money.” Mohammad is experiencing the delay, obfuscation, and silence.

Yvonne, a 40-year resident of this community, related how she got free of the second trap. She struggled for five years to do a simple thing: to maintain her concrete front steps with a protective sealer. As first, the HOA cited “painted steps” as a violation. “It is not paint,” Yvonne explained again and again, over the years. “Home Depot recommends that you put this sealer on concrete to protect it from salt and the weather. I wrote you letters. I mailed you a photo of the label on the can. I sent you the Home Depot YouTube video, ‘How to Stain Your Concrete.’" On May 8, Yvonne reported to the community that the HOA board of directors had finally accepted the fact that using concrete sealers is good practice. She thanked the HOA board members for deciding (after five years of obfuscation) not to punish her for simply maintaining her property.

In the third trap, the HOA issues excessive fines and fees, and your credit rating is damaged. A 16-year resident of the community, Evan has been trying to get clarity from the HOA for five years, during which time the HOA aimed more than $10,000 in fines and fees against his family. He refuses to pay because he believes the citations are invalid. Evan said he and his wife and children have been denied access to the pool for five years. The HOA claims the concrete front steps need repair, but nether Evan nor I can see anything wrong with the steps. They are exactly like the front steps on neighboring properties to the left and right (which have not, however, elicited citations from the HOA). Vague "problems" with concrete steps or stoops are an often-used coercion tool of the HOA, although board members get a pass. At the community meeting in May, Evan decided to speak up and protest.

In the fourth trap, the HOA deploys steel-jaw techniques of “equity theft” against you. This is the end game. The HOA places a lien on your home. It sues you in court. It amasses fines and fees against you that must be paid as you prepare to sell your home. On May 8th, Ms. Knight stood and spoke. She held papers in her raised hand. She and her late husband paid more than $10,000 to the HOA for infractions like loose cable wire and handrails need painting–and for the battery of fines and fees that get tagged to the original citations. Her alleged new debt, suddenly $4,000, continues to rise each month. A "statement of account" reveals that she is experiencing both “reassigned payments” and “accelerated assessment.” These are illegal collection practices in some states, but not in Maryland. At the community meetings in April and May, Ms. Knight decided to speak up and protest this manufactured debt, aimed at her family over seven years.

I first became aware of this type of HOA abuse four years ago, in June 2019, when another pair of homeowners, Len and his wife, shared their papers and their puzzlement with me. (Note 4) The HOA had taken their monthly assessment of $89 and applied it to other debts it had suddenly generated (i.e., “reassigning their payment”). Then it punished the homeowners for “being late” on their dues by charging the remaining six-month’s-worth of dues (July-December) all at once (i.e., “accelerating his assessment”). Three months earlier, their account had showed $12 actually owed to them by the HOA. Now they were $1,080 in debt.

If the HOA takes you, the homeowner, to court, then you and the other members of the community are paying for the HOA lawyer who attacks you. Hire your own lawyer, if you can afford it, to defend yourself. Or you might defend yourself without an attorney, as one father, Hoan Nguyen, did successfully in 2021 in court.

If you decide to flee the HOA community, putting your house on the market, then all of the alleged debts you owe to the HOA have to be paid at closing. The HOA's non-responsive silence, mentioned above, was strategic. Suddenly it finds a voice. This is the HOA's final, coercive squeeze, and both sellers (Joe, Note 5) and buyers (Ishmael and Isabel) are targets of this coercion. Your house, your biggest purchase and likely your primary investment, is merely a target for the HOA, right up to the end. This is a form of equity theft.

All of these homeowners have maintained their properties very well. They are up to date on their monthly HOA assessments, mortgage, and taxes. [CX: One family missed some COVID-era dues. Note 3] Many are parents or grandparents. All are responsible members of the community. Evan, for example, will interrupt his daily jogs around Quail Valley to engage with dog owners who do not pick up after they dogs, speaking gently but firmly about proper dog handling and the law. Yvonne is a prominent leader in many civic organizations in our county.

Eleven of the 14 homeowners mentioned in this article are immigrant Americans, ethnic minorities, or both.

Please consider the scale of what is happening. There are 592 properties in Quail Valley. Very likely, there are dozens of families who could not or did not appear in person at the community meeting in May to protest the odd, scatter­shot "violations" they had just received. The HOA is lining up those families, silently, to serve as "profit-generators" for their HOA-industry partners, as one 23-year resident described it. Your lawn. Your house numbers. Your chimney. Your flower or food garden. These are "crimes" for which these families will eventually be fined thousands of dollars by the HOA. An estimated 400,000 homes in Maryland are part of HOA communities. (Note 6) How many of these homeowners are experiencing this harassment? (Note 7) The material harm is real. It is traumatizing for families, and it demoralizes the community.

What can a homeowner do? We can protest by showing up and speaking up at an HOA Community Meeting (as these five homeowners did); or filing a complaint ($50) with Montgomery County; or filing a complaint (free) with Maryland's Attorney General. These options for redress are your right to explore. But these are Band-Aid measures that require homeowners to spend yet more time struggling alone against an entrenched system that profits from their suffering. It is in the HOA's financial interest to keep things murky, to NOT communicate well. What homeowners really need is leadership from HOA board members who will interrupt the process and refuse to feed the predatory system. We also need a campaign to reform state laws, and we need state legislators who see this issue as a priority.

The change will arise from many sources. Maybe residents will continue speaking up about how they want their community to run. Maybe the board members will awaken to their responsibility to halt the setting of debt traps. Perhaps all 592 households in our HOA community will reconsider the costs and benefits of sustaining this HOA. What's the added benefit that an HOA adds to community life? What are the down sides? Many neighborhoods function perfectly okay without an HOA. That might work well for us too.

Steven Sellers Lapham is a 22-year resident of the Quail Valley HOA community and author of the “Cuckoo Court” blogs on PATCH.COM, at tinyurl.com/CuckooCourt.

Notes

Note 1: The first blog was published on April 6, 2021. “17 True Stories from Quail Valley.”

Note 2: The systematic, scattershot "property violations" described here resemble many others, including the ones we (S.L.) received in 2020 for "stains on steps" (caused by leaves from the neighbor's tree); "color of shed does not match the house" (which is not actually required for a plastic shed); and a "leaning front stoop" which, after 20 years, the HOA was objecting to during a global epidemic. It cost $3,000 to fix the stop, steps, and walkway–an amount unaffordable for many blue-collar families during the epidemic. At that time, neighbor D.V.C. wrote to me, "I got a letter about my front porch too. It’s sloping away from the house, but it’s been like that for 25 years, since we moved in and wasn’t a problem for them until now."

Note 3: Updates, three weeks later. Residents speaking assertively at the Community Meeting helped resolve some of the more-recently-issued, alleged violations. Others await fair action from the HOA.
* Ana’s alleged property violations were “closed,” which is good news.
* Marie received pool passes for her family, which is good news.
* The HOA charges against Erin’s account remain. His parking space # is still obscured, and his family is denied access to the community pool. UPDATE 8/27/2024: "Erin" was a pseudonym for Eric, and the outcome of his situation is reported here.
* The HOA charges against Ms. Knights account remain, her parking space # is still obscured, and her family is denied access to the community pool. UPDATE 8/27/2024: A complaint filed with Md. Consumer Protection Division gets better results.
* Mr. Nguyen mailed a “cease and desist” letter to the HOA, which was continuing to harass him in defiance of the court’s decision. His parking space # is still obscured.

Note 4: In 2019, I first began to awaken to the harm the HOA was causing. On July 11 of that year, I wrote directly to the HOA: My neighbors [Len and Marge, 20-year homeowners in QV] have shared with me your (undated) letter and “statement of account” that arrived at their home in early July. It is puzzling to me. Although this family began the year with a zero balance (actually $12 credit) in their HOA account, and have paid four monthly HOA fees (set at $88), they apparently owe $1,080 -- immediately – and more, with fines and fees, if that full amount is not paid soon. The statement appears to be charging the family for six months of future HOA payments, a so-called “accelerated assessment.” Your letter is also threatening this family with a lien on their home “if full payment is not received within thirty (30) Days (of your un-dated letter). Partial payments will be subject to a $15 collection cost.”

Note 5: Joe, a homeowner who fled Quail Valley in 2023, emailed this message: [The HOA] will send you to an attorney [and] increase the amount you had owed to an amount that is almost impossible to dig your way out, regardless [of whether] you pay the monthly [dues]. We should get an anonymous survey of how many people owe money to the [HOA] ... I did sell my property to a 3rd party, but [the HOA] put the screws to me at the end. In fact, they tried to tell the title company that I had not paid for January and February [dues], and I had to send statements to the title company to prove to them I had paid it. Then they tacked on a penalty with additional charge of $500 dollars, saying I owed that as well. So had to fight about that. Just an FYI [to share with] people in the community.

Note 6: A recent tally shows, "9% of Maryland homeowners are part of HOAs. An estimated 398,462 homes in Maryland are part of HOA communities." HOA Statistics (October 9, 2022). Source: https://ipropertymanagement.com/research/hoa-statistics.

Note 7: Acronyms or initials are used occasionally in this blog because many residents fear retaliation from their HOA, among other reasons.

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