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Speaker 1

00:00

-♪ ♪ -♪ ♪ Our main story tonight concerns home ownership. So, if you are under 35, honestly, this story isn't for you. It'll never be for you. You will never own a home.

Speaker 1

00:14

Sorry, That is the deal that you made when you decided to be born after 1988. But we didn't want you to feel left out, so we've actually prepared a full alternative story for you tonight about Chuck E. Cheese, a different crumbling American institution that you should go watch now instead. This is real, it is 25 minutes long, and you can find it at lastsqueaktonight.com.

Speaker 1

00:36

Please go do that now, because there is genuinely nothing for you to see here. Okay. For everyone who remains, this story is about HOAs, which stands for Homeowners Associations. Not, as you might have thought, Horse on Adderall, which I believe is the potential sequel to Cocaine Bear.

Speaker 1

00:55

HOAs, also sometimes known as community associations, are entities set up to govern groups of homes, like a suburban, neighborhood developments, or condos, and often make local news as the villains in stories like this.

Speaker 2

01:08

It's a simple story of a man with some simple needs.

Speaker 3

01:12

Sit down and have his little, chips and a soda, if he wants, and say hello to some people.

Speaker 2

01:18

Tony's talking about her neighbor Ted.

Speaker 4

01:20

I'll be 92 in September

Speaker 2

01:22

and the bench outside his door.

Speaker 4

01:24

I have a place I like to come out and sit and relax.

Speaker 2

01:26

Notices from his HOA, the Bethany Villa Association, saying simply remove your bench from the common area, or it will be removed.

Speaker 3

01:34

The man deserves a place to rest, and enjoy nature, and eat his little snacks, and say hello to people, and pet puppies.

Speaker 1

01:43

Yeah! Let that man have his fucking bench! He deserves to eat snacks and pet puppies, which is, by the way, the single greatest way you could spend a day. Nothing tops that.

Speaker 1

01:53

If on the day that your baby was born, a friend came and told you that they spent the afternoon eating snacks and petting puppies, They had a better day than you did. The miracle of life can't compete with the simple joy of munching snacks and scratching backs. Nom, nom, nom, nom, nom. And this is true, a rub, rub.

Speaker 1

02:11

Also, quick shout-out to Tanya there, the neighbor built by that local station is simply neighbor and Ted fan. She may be a Ted fan, but I, for 1AM a Tanya fan, because I see the effort that it takes to put on a full face first thing in the morning and go on the news just to say, -"Stop fucking with Ted!" -$10. But that is not a one-off. Stories of HOAs being petty are legion.

Speaker 5

02:33

A Valley homeowner says her HOA wants to fine her because she installed artificial grass.

Speaker 6

02:39

A homeowners association told 1 San Antonio family their holiday decorations are up too early, so they got to come down.

Speaker 7

02:45

I got lots and lots of, letters from the HOA telling me to stop feeding the ducks.

Speaker 8

02:54

I mean, when you receive a violation for a tree not being tree-shaped... -...um, it boggles your mind.

Speaker 9

03:02

--AUDIENCE LAUGHS

Speaker 1

03:03

Yeah, of course it does! Because what does not tree-shaped even mean? If it has branches, bark, and a place for a squirrel to store some nuts and get some fucks, it's a tree, it's tree-shaped by definition.

Speaker 1

03:15

The fact is, a lot of people live in HOAs. 29% of the U.S. Population lives in a community association. And it's actually increasingly hard to find a home that doesn't come with 1.

Speaker 1

03:27

As of all the new single-family homes sold in 2021, 82% were in an HOA. That's up from around just 40% in 1990, which is pretty remarkable, given that when 1 local station asked viewers how they felt about their HOA, the results were nearly universally negative, with 1 notable exception.

Speaker 2

03:46

This was a rare comment. I like our HOA, I guess I'm the lucky 1. But it was quickly followed with, don't count yourself lucky too soon, every HOA is just 1 vote away from hellish nightmares.

Speaker 1

03:59

Wow. 1 vote away from hellish nightmares is a pretty intense comment. It's also, incidentally, the DNC's sole campaign message for the last 2 elections. So if they are this widely used and this widely loathed, tonight, let's look at HOAs.

Speaker 1

04:14

What they are, what purpose they serve, and the surprising powers they have to wreak havoc in people's lives. And let's start with the basics, courtesy of this old explainer video.

Speaker 10

04:24

Just what is a community association? The association is a legal entity Created as a result of a planned community, a board of directors is responsible for governing your association. Working together with the board members and committee members can ensure that your community will run smoothly and effectively.

Speaker 10

04:43

After all, board members are owners just like yourself.

Speaker 1

04:47

Okay, you can really tell that video is from the 90s, not just because it's shot with a quality that can only be described as after-school porno, but also because the board in question is just 3 men and 1 woman that they all ignore. In other words, almost every 90s sitcom. The point is, HOAs are run by elected boards of your fellow homeowners, and they require the payment of dues, which average around 2 to 300 dollars a month, but can be much more depending on where you live.

Speaker 1

05:13

And in return, the HOA covers upkeep of the common areas and amenities in the neighborhood, like playgrounds or swimming pools. They also, crucially, enforce architectural and landscaping guidelines like, no benches or trees must be tree-shaped, which are often trying to push aesthetic uniformity and preserve property values. You can find HOA rules like, homes may display a maximum of 2 exterior decorative objects, or all garage doors must be painted Benjamin Moore Mayonnaise OC 85. And 1 Arizona HOA required that, front yard landscaping must contain a minimum of 1 36-inch box tree, 1 24-inch box tree, 10 five-gallon shrubs, and 10 one-gallon shrubs.

Speaker 1

05:54

And I genuinely can't tell if those are HOA requirements for taking care of your lawn, or rules to settlers of Qatar. And those rules aren't just advisory, they're enforced through fines. And HOAs can be pretty unforgiving about handing them out.

Speaker 11

06:09

Take a close look at Deborah Blue's Wake County home. The color of her shutters had her facing steep fines with her homeowners association.

Speaker 8

06:16

They decided to fine me $25 a day.

Speaker 11

06:19

Deborah paid close to 2 grand in fines and took down her plum shutters.

Speaker 8

06:23

Which was immediately met with a response that now they were going to fine me in violation of taking the shutters off the house and start fining me again.

Speaker 1

06:33

That is absurd. She got fined for the color of her shutters, took them down, and then got in trouble for the absence of shutters. It's 1 of those situations where no matter what you do, you lose.

Speaker 1

06:43

Sort of like going on The Voice. Sure, there are technically winners, but name a single 1. This show has been on for a conservative 50 years and not a single winner is a household name. Seriously, tell me the first and last name of just 1 winner.

Speaker 1

06:58

You can't. No 1 can. Not even Honky Tonk Frankenstein could do it. And some HOAs can be surprisingly aggressive about actively seeking out rule violators, as this man discovered.

Speaker 12

07:10

3 years after buying this property, the Henrys received a letter from their homeowners association.

Speaker 6

07:16

Saying that they were doing an audit, and they noticed that I had a shed in my backyard, and it wasn't approved by my homeowners association.

Speaker 12

07:24

Gavin, who is a disabled veteran, told the HOA the shed was there before he bought the property. And none of his neighbors have ever complained. Since you can't see this shed from the front yard and no 1 came knocking at the Henry's front door, they asked their homeowners association how they were able to perform an audit.

Speaker 12

07:41

That's when they were told over the phone that Google Maps was used to scope out Their backyard.

Speaker 1

07:46

Yeah, they spied on him with Google Maps. Which feels extreme. If you're relying on the achievements of the space program to find out what is in someone's backyard, it's probably not your business.

Speaker 13

07:57

And if

Speaker 1

07:58

you're wondering how HOAs get the authority to do all of this? The answer is, they're basically born with it. HOAs are typically created by developers when they build a new neighborhood.

Speaker 1

08:08

They write the HOA into deed restrictions with membership automatic upon purchasing your home. And they're set up as not-for-profit private corporations that can often function like a local government. Some HOAs handle street paving, snow plowing, lighting, and run private sewer and water systems, and others even dabble in traffic enforcement.

Speaker 14

08:28

In the Parkview community in Spring Valley, an HOA board email says... They installed this, a speed camera. They say more are coming.

Speaker 14

08:35

Neighbor Ted Morris says what worries him and some other neighbors is how much a violation will cost you for going slightly over 15 miles an hour. The notice says it's 250 for the first ticket, $500 for the second,

Speaker 1

08:48

$1, 000

Speaker 14

08:49

for the third and any more violations for you and your guests.

Speaker 1

08:54

A thousand dollar speeding ticket, given out not by the city, but by the HOA. Basically, The way HOAs work is, they get to set the rules and select the punishment for breaking them. Think of it like Disney World.

Speaker 1

09:07

When you walk into the mouse's house, you play by the mouse's rules. And if you step out of line, Goofy is allowed to break your fucking knees. -♪ ♪ -♪ And the existence of HOAs is something that many local governments actually appreciate. Cash-strapped municipalities like them because developers build roads and parks and pass the costs along to the homeowners.

Speaker 1

09:27

In fact, many municipalities even mandate the creation of HOAs in new residential developments, which might be why the rise of HOAs has been called the most significant privatization of local government responsibilities in recent times. And that gets to an important point here, because HOAs can have the authority of a government and collect fees and fines like 1, but when it comes to accountability, they can actively resist it in ways the government officials could only dream about. After the residents of 1 HOA in Arizona posted some social media comments about an upcoming board election, the HOA demanded that they remove posts that were critical of its board, and threatened to fine them as much as $250 a day if they didn't. And while they eventually walked that back, that is a pretty striking level of hostility toward basic scrutiny, even before you learn that this is how 1 board member dealt with press inquiries as the story unfolded.

Speaker 15

10:21

I gotta ask you. No, I'm sorry, but you had a lot of... No, you've got

Speaker 13

10:24

a lot... Get away from me!

Speaker 15

10:25

That's Val Vista Lakes Board Director Todd McCoy following a private board meeting tonight in Gilbert. After being shoved, we reiterated to McCoy that the community was very upset, to which he replied...

Speaker 4

10:36

I don't care about them right now.

Speaker 13

10:39

Holy shit!

Speaker 1

10:40

He came at that reporter with the fire of a thousand Mel Gibson's. There was almost no scenario where yelling, get away from me, that aggressively is called for, aside from maybe bumping into Ezra Miller in Hawaii. And at this point, you probably won't be surprised to learn that private associations designed to have the force of law in suburban neighborhoods have a history of being used to exclude certain groups.

Speaker 1

11:03

As we discussed in our housing discrimination piece, many neighborhoods had racial covenants barring the sale of housing to black Americans. And in some cases, HOAs tried to enforce those covenants even after the Supreme Court ruled them unconstitutional. But even today, there are cases where HOAs are used to actively exclude certain types of residents. Just last June, the board of the Providence HOA in Denton County, Texas, which oversees a community made up of 2, 200 homes, passed a rule that would ban renting a house to anyone using a publicly financed or subsidized housing program, such as Section 8.

Speaker 1

11:38

And the impacts of that were immediate.

Speaker 12

11:41

Reficia threat fears being homeless soon. That's because the rules have changed in their Providence Village subdivision.

Speaker 16

11:47

I sit in my living room and cry because I just don't know what to do.

Speaker 1

11:51

Now, that is terrible, but it's not just her. That new rule threatened to displace more than 150 families renting in the neighborhood, with black families making up 93% of those households. And I know that those HOA officials might not think of themselves as racists, but 93% is a pretty solid A for racism.

Speaker 1

12:10

That HOA's policy is now under investigation, but the fact is, there is nothing in state or federal law that explicitly forbids HOAs from enacting bans like this. It's basically a segregation loophole, which, by the way, would be a pretty good slogan for the suburbs. And if you're thinking, well, this all seems fucked up, but thank God there aren't private companies making this worse. Hold on, I've got some bad news.

Speaker 1

12:35

Because at this point, we should probably discuss management companies. You see, while, as I mentioned, all the big decision-making in HOAs is done by elected boards of homeowners, They may not have the time or skills to do everything running an HOA entails, or they may not want to get their hands dirty policing their neighbors. That is why the majority of HOAs hire professional companies to handle their day-to-day needs under the board's direction. Here is how 1 of the biggest associate pitches itself.

Speaker 17

13:04

The people who serve on our boards are volunteers, and for most of them, they have other full time jobs. So our role is to come alongside them and help do the heavy lifting of what it takes to manage that neighborhood that they may not have the time for or the expertise for. Our role is really to help them achieve that vision.

Speaker 1

13:27

Now in theory that sounds pretty good doesn't it but in practice it can get much messier than that. Remember Ted, who was getting his bench taken away? His neighborhood was run by a socia.

Speaker 1

13:38

So, if all they want to do is help a neighborhood achieve a vision, as long as that vision includes Ted doesn't get to sit down, I guess Mission accomplished. The problem is, when you introduce for-profit companies to find problems in your neighborhood, things can change fast. Many of these management companies have people whose job it is to drive around neighborhoods looking for infractions. If you look at that letter that Ted got regarding his bench, you'll see that it says the infraction was noted by the Associa Arizona inspection team.

Speaker 1

14:09

And just watch as 1 woman explains just how quickly things snowballed after a new management company took over her HOA.

Speaker 18

14:16

First, the HOA told her her trash cans couldn't be visible from the street.

Speaker 19

14:20

You have to turn your head so far over like this to see it for the second that you are passing my house.

Speaker 18

14:27

So she moved them inside,

Speaker 20

14:29

which is very hard to get him in and out.

Speaker 18

14:31

Then the problem was her hose.

Speaker 19

14:33

It was, you know, all wrapped up,

Speaker 21

14:35

so it really didn't look bad.

Speaker 14

14:36

Then it was her lawn art. Can't have those.

Speaker 18

14:39

Then they wanted her to power wash her house and sweep up her driveway, but when she didn't get it done fast enough, She got late fees on top of late fees. $25 a day for each infraction.

Speaker 19

14:49

These are things that are so incidental, they're not important. They're asinine, and you're charging me

Speaker 1

14:55

$17, 000? $17, 000? That is clearly ridiculous.

Speaker 1

15:01

I adore everything about that woman, including her world-class delivery of asinine. Although, I will say, I do think she could do a little bit better with her lawn art. It's not $17, 000 fine, but of course not. It's just a bit of a waste when she could have something spectacular like these ducks wearing boots, or these ducks made of bananas.

Speaker 1

15:20

Your lawn is a canvas, Pat. Fill it with whatever duck art speaks to you. The point is, this is a system that can quickly trap people in a vicious cycle of debt. Here's how it works.

Speaker 1

15:32

Let's say you fall behind on HOA payments. You might be charged interest and have to pay additional penalties, but that is just the beginning here. Because once the management company starts pursuing payment, they can involve lawyers whose fees can be astronomical, and things can get out of hand fast. Here is the bill of just 1 88-year-old homeowner in Texas.

Speaker 1

15:52

She fell ill and was in a nursing home, so she missed an annual dues payment at the start of 2021 of $423. Her HOA then started charging interest and fees for missed payments, and just 5 months later, her bill was already up to $682. But things really started escalating when lawyers' fees started getting introduced, because there are a lot of them. And over the course of just 2 years, She suddenly owed over $8, 000, well, over half of which was lawyers' fees.

Speaker 1

16:20

And if you're wondering why lawyers are even getting involved here, it's because they often come in when HOAs are ready to exercise a truly incredible power that they have over homeowners, which this woman found out about the hard way.

Speaker 16

16:32

There was a process server who came and knocked on my door and served me with a foreclosure notice. And, of course, you know, I freaked out.

Speaker 8

16:40

Myesha had fallen behind on a lot of her bills, but she said she'd work something out with the mortgage company.

Speaker 16

16:45

But this was the HOA, and I had no idea that an HOA could foreclose on you.

Speaker 1

16:49

It's true. HOAs can foreclose on your home. Which is 1 of those things that sounds ridiculous, but is absolutely true.

Speaker 1

16:57

Like how there are 4 times as many chickens as people on Earth. Or Lenny Kravitz is Al Roker's second cousin. Or that the first song Charlie Puth ever masturbated to was This Love by Maroon 5. That's a true fact, and I hate that I know it, but I love that you now know it, too.

Speaker 1

17:15

And this power gets deployed all over the country. Colorado's HOAs alone filed more than 2, 400 foreclosure cases from January 2018 to February of last year. And to make matters worse, those homes can then be sold at auction, sometimes without the homeowner even realizing. Just listen to this woman explain how, despite desperately trying to pay her late HOA fees, she wound up losing everything.

Speaker 9

17:39

Walked in, paid the 2, 700, and when I walked out, I said, this is all I owe, right? Yes. Then here comes the next set

Speaker 22

17:46

of letters. And now it's up to

Speaker 1

17:48

$6, 400.

Speaker 23

17:49

Turns out there were post-judgment legal fees and 18% back interest. So even after she'd paid more than

Speaker 1

17:55

$9, 000,

Speaker 23

17:57

she was still somehow behind on her dues. But in 2018, she received the most shocking letter of all, an eviction notice.

Speaker 9

18:08

You know, you lose your home. That's hard.

Speaker 23

18:11

But sadness turned to anger when she realized the HOA had purchased her home through foreclosure for

Speaker 1

18:16

$3.24

Speaker 23

18:18

a year before she was evicted.

Speaker 1

18:21

That happened. They bought her whole house for $3.24. And losing your home alone is horrifying, but seeing it sold for so little is genuinely insulting.

Speaker 1

18:32

Because 3 dollars and 24 cents is significantly less than what it costs to buy just 1 of those banana ducks. They cost 17.89, and the reason I know that is, I bought 1, and yes, I too was surprised by how small it is, but much less surprised than I was to learn that it technically costs more than someone's entire fucking house. Most states don't even require HOAs to offer a payment plan before taking legal action against a homeowner. And the reason for that is simple.

Speaker 1

19:02

Remember, HOAs are private organizations. That means that the nation's 350, 000 HOAs are largely unregulated. And the government sees any disputes as private matters. The California AG's office says that it does not handle most homeowners' association's complaints.

Speaker 1

19:18

The Texas Secretary of State says that no state agency regulates home or property owners' associations. And the New York state AG says, in most cases, there is no government agency that can help unhappy homeowners who are having problems with their homeowners association, adding, good luck. Which is basically just a cute way to say, you're fucked! It's like, you're fucked, washed her hair and put on a little church dress.

Speaker 1

19:42

And if after all of this you're thinking, well, I have learned my lesson, I will never buy a house in an HOA. Remember, over 80% of new homes that are sold come with 1. Also, you might not know that you are dealing with a bad HOA until it is too late, as in most places, you aren't legally required to be granted access to all of its rules until after your offer to buy a home is accepted. Which seems a bit weird, doesn't it?

Speaker 1

20:07

If your HOA can see your backyard from space, you should probably be able to see your HOA documents before you sign. And look, I'm not saying that all HOAs should immediately be gone. For a start, some people do like theirs. Besides, right now, local governments just aren't equipped to suddenly take over the services like trash collection or maintenance that they provide.

Speaker 1

20:28

But at the very least, states should be looking for ways to avoid the worst possible outcome for homeowners who simply find themselves in a tough spot. Like mandating HOAs, offer payment plans on unpaid debt before they take legal action, and banning foreclosures based solely on fines and attorney's fees. Because at their best, HOAs are annoying student council adults telling you to trim your shrubs and move your trash cans. But at their worst, they are glorified debt collectors with the power to upend your life and expel people from a neighborhood.

Speaker 1

21:01

And at absolute minimum, from now on, HOAs should probably be forced to be much clearer with people about what they are potentially getting themselves into. ♪♪

Speaker 24

21:14

Good morning, Stephanie and Chloe. Hi there. Welcome to Cedar Paradise.

Speaker 24

21:19

The moment you purchased your home, you joined our wonderful homeowners association, whether you wanted to or not. The HOA is here to take care of you. You give us money, and in return, we maintain all the beauty you see around us. And if you don't pay up, we'll turn your fucking life upside down.

Speaker 24

21:37

So let me show you the neighborhood. Here at Cedar Paradise, each of our lawns requires somewhere on the property, 1 tree, 6 three-gallon shrubs, 1 birdbath, a garden gnome, a second gnome, for that 1 to talk to, a third 1 they ignore, 1 Victorian child playing hopscotch, and an American flag, but no benches. Please, no! Eat shit, Ted!

Speaker 24

22:02

No, no, no. When you join an HOA, you're really joining a community that looks after each other. And as your elected representative, I make sure to take a hands-on approach. Ah!

Speaker 24

22:14

Novelty mailbox. That's a violation. Oh, yeah. That's a violation.

Speaker 24

22:20

Wind chimes. Gross. 3 violations. Nope.

Speaker 24

22:24

I don't care for that tree. That's a violation. Whew. 16 and a 15.

Speaker 24

22:31

That's another

Speaker 1

22:32

$1, 000,

Speaker 13

22:33

Ken! Fuck you!

Speaker 24

22:35

And Ken isn't the only 1 who appreciates everything the HOA does.

Speaker 19

22:40

Fuck the HOA. That's your sons of bitches.

Speaker 13

22:44

They found my shed by strapping a GoPro to a raccoon. A damn raccoon. Some white people bullshit.

Speaker 5

22:53

Apparently, my cans are too visible when they're parked up there, but you'd have to turn your neck like this to even see them, and I don't know what else I'm supposed to do at this point. Aah!

Speaker 24

23:01

Hey, Pam. Cans aren't allowed to go down to the curb until 4 p.m. On trash day.

Speaker 24

23:06

It's

Speaker 1

23:07

357.

Speaker 5

23:08

How long have you been in there?

Speaker 24

23:09

Pam, this is recycle only.

Speaker 9

23:12

I know, but- Pam. I know.

Speaker 24

23:14

You know this, Pam.

Speaker 5

23:15

I know. Oh.

Speaker 24

23:17

0! No broken glass on the driveway. That's another fine.

Speaker 5

23:21

Are you allowed to do that?

Speaker 24

23:22

There's nothing in the rules that says I can't.

Speaker 5

23:25

These rules are stupid.

Speaker 12

23:26

I don't...

Speaker 24

23:26

What did you say?!

Speaker 5

23:28

Nothing. Nothing. Have a good day,

Speaker 13

23:31

Bob! Ha ha ha!

Speaker 24

23:33

And, hey, if you fall behind on your payments, we get it. We're not monsters. Oh, hello.

Speaker 24

23:40

I'm here for the debt.

Speaker 13

23:42

I didn't know I owed anything.

Speaker 24

23:44

Well, we sent you a $20 fine 3 months ago, and We haven't heard from you since.

Speaker 13

23:48

Well, here. Here's 20 bucks.

Speaker 24

23:50

Thank you, but that's not all. There's this bill now, too.

Speaker 13

23:53

Wait, what is this now?

Speaker 24

23:54

I'll let our lawyer explain.

Speaker 25

23:56

And that starts my hour.

Speaker 13

23:59

Now, where'd you come from?

Speaker 25

24:00

Now, you've got fees. Late fees, late, late fees, lawyer fees. That's me.

Speaker 25

24:06

Fees for this conversation we're having right now, fees. There's a raccoon fee in there. A raccoon? Yeah, a raccoon fee.

Speaker 25

24:13

Anyway, it comes to

Speaker 1

24:13

$11, 067.38.

Speaker 13

24:17

Hey, wait, I can't afford that.

Speaker 25

24:20

Well, great news, then. During this conversation, we foreclosed on your house.

Speaker 24

24:25

I just bought it.

Speaker 13

24:26

Oh. For a buck. Wow.

Speaker 26

24:28

Can you break a 20? Wait, wait, wait, wait. This whole film's really illegal.

Speaker 13

24:32

Oh, that's what's so great about it. It's not. It's not illegal at all.

Speaker 13

24:37

No. It's completely legal. I'm a lawyer. He knows.

Speaker 13

24:41

I know. You know? Yes, wait, what the fuck? Yo, hey, Daniel is strong.

Speaker 13

24:47

What? What? We don't need to be. I never get sick of it.

Speaker 13

24:53

Hey, you want to

Speaker 24

24:54

come into my new house? Yeah. Please.

Speaker 24

24:56

Yeah. Let's have a drink.

Speaker 25

24:57

Yeah, let's see what he's got in the refrigerator. Yeah,

Speaker 18

25:00

good call.

Speaker 25

25:01

Oh, there's a lot

Speaker 24

25:01

of fun art. So welcome to the HOA. I think you're going to like it here.

Speaker 24

25:06

And if

Speaker 13

25:15

you