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Misinformation About Arizona Homeowners Associations

2/14/2018  -  Falls Church, VA

​​Media statement ​in response to this article, published by azcentral. 

Thank you for publishing your recent article, “Protection vs. HOAs Is Scarce in Arizona." It is indeed important to raise issues of concern that may have an impact on the nearly 2 million Arizonans living in condominiums and homeowners associations, especially as they relate to embezzlement and theft of community association funds. Your article, mentions that the community management profession is not regulated. That is correct, but unfortunately even professional licenses do not stop criminals. As you will note, at least one of the examples in your article—Karen Whiting, the woman who pled guilty to theft from an association—held a Realtor's license and is an active faculty member of the Arizona Realtors Association.

For community associations to avoid the damages from theft/embezzlement, they should carry appropriate fidelity bond coverage to ensure their potential losses are covered. And they should conduct regular audits to ensure appropriate internal controls of the community association's funds.

While unfortunate situations exist in community associations, most people living in homeowners associations are very happy. According to a 2016 survey by the Foundation for Community Association Research, 87 percent of residents rate their community association experience as positive (65 percent) or neutral (22 percent). In addition, 74 percent of residents surveyed prefer either no change or less government control within their association.

Homeowners have the right and responsibility to elect board members who are good stewards of association funds and of their community. More than 65,000 Arizona homeowners volunteer each year to serve on their association boards. These hardworking Arizonans are tapped to manage their association's budget and forecast maintenance, insurance, and reserve expenses, among others. Based on their professional backgrounds and overall experience, they are elected by their peers to lead their community. Again, most people (84 percent) say their neighborhood board of directors “absolutely" or “for the most part" serves the best interests of their communities, according to the Foundation's survey.

The notion that association boards do not disclose to the public the financial documents that explain how they spend association dollars is somehow problematic and unreasonably tarnishes the image of most HOA boards. In reality, community association boards do make financial reports available to all association homeowners—who as a collective group make the ultimate decision as to how the money is spent. Arizona statutes outline the framework for a board's authority and responsibility to association residents.

In a nation focused on individual freedom, it may be natural to empathize with an individual homeowner who runs afoul of the community association. However, homes within Arizona homeowners associations enjoy a 5–6 percent increase in property value over other neighborhoods. HOAs preserve the character of their communities, protect property values, and meet all residents' expectations. Homeowners agree to abide by well-established rules and restrictions when they purchase their homes. Indeed, these rules can involve exterior paint colors, fences, sheds, pets, flagpoles, parking, landscaping, and even smoking, and issues can arise when homeowners either aren't aware of the rules or choose to ignore them.

Importantly, the conclusion of “Protection vs. HOAs Is Scarce in Arizona" that HOA dues/assessments are the culprit for the state's foreclosure rate is unfounded. When a homeowner cannot afford to pay his or her monthly assessments, the burden falls to the other homeowners in the community to absorb the extra expenses until the delinquent homeowner can repay what he or she owes to neighbors. These necessary monthly assessments fund the community's municipal-like services and unique amenities. All homeowners have the right to fair treatment regarding financial obligations and the opportunity to discuss payment plans before foreclosure is initiated. Neighbors don't want to foreclose on neighbors, which is why this rarely happens. However, there should be equity for those who pay their assessments and those who fail to meet their obligations.

In general, homeowners associations and condominium communities are great places for residents to call home. We call upon the Arizona Republic to recognize that most people living in community associations are very satisfied with their communities.

New HOA homeowner resource: Community Associations Institute's Central Arizona Chapter (CAI-Central Arizona) now offers mediation services to members and nonmembers based on a demand by the state legislators and other community association stakeholders. 

Sincerely,

Thomas Skiba, Chief Executive Officer
Community Associations Institute (CAI)

 Kayte Comes, Executive Director
Community Associations Institute- Central Arizona Chapter (CAI-CAC)


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