By: Lydia Crawley
The Parsons Advocate
Tucker County Commission held a work session with representatives from Home Owners Voice, a 501c4 West Virginia nonprofit. Chair Kathy Knight met with the Commission to discuss HOA compliance and reform.
“The work session is to talk to Kathy Knight about the Homeowners Association throughout the State of West Virginia,” Tucker County Commissioner Mike Rosenau said.
Knight described the different categories of HOAs that are found throughout the state to the Commissioners. “This is where we are to date,” Knight said. “We have different kinds of HOAs. We have the conforming HOA which is, think Timberline. Then you have rogue, think Winwood. Then you have zombie and a good example of a zombie would be Cedar Place in the valley. They’re small, they have a road, their documents may or may not be filed. It depends on who you ask. They don’t do annual reports as a general rule. They probably never had an audit in their life. They got eight, kind of duplexes, townhouse duplexes. And they have no real issues and their annual meeting consists of an annual BBQ. They handle their road as a cooperative, basically. They don’t call it that, but having bought and sold properties in there as a real estate agent, that’s how they function and it works great for them.”
Knight outlined to the Commission what her organization’s position was in regards to recent legislation at the state level. “What happened last year, is a current resolution 25, happened last year in the legislative session,” Knight said. “Basically, what you need to know and why this set off a firestorm in addition to House Bill 3558 was because of what I call the ‘opt out.’ The opt out led to this because the state was going to get a whole bunch of roads back. And there’s some problems in relation to HOAs and the counties and the state and that problem is basically property taxes. You cannot get a straight answer in this state whether HOAs are required to pay property tax or not pay property tax because it depends on which county you’re talking about. But you’re losing billions probably in the state and nobody really knows for sure because they don’t monitor it. They have no accountability. It’s like to question of how many HOAs are there in the state. Nobody knows. Including the Secretary.”
“So, what you’re explaining to me is all of this is a state issue,” Rosenau said. “And I don’t mind being your practice forum in your presentation, but these are state issues.”
Knight proposed that County governments would be divided into Regions. “Where you guys come in is going to be under the Regional Master Association,” Knight said. “And because, you explained it well the last time we met, because it should be a region set up similar to the Department of Transportation. So, you got your region and we are going to put all the counties under the region. There are probably counties that don’t have a rogue or a zombie…Then you have local and we’ll refer to local as county.”
Knight proposed that control be handled by the Region and county level. “Somehow, someway we need to take it from the Region to the State,” Knight said. “But we don’t necessarily want State to become a department. It should not be run fully at the State level. The Master Association really should be set at the Region and the reason you want it at the Region is they interface with local ie county because you guys know what is going on in your county.”
Rosenau expressed concern over enforcement and the law-making jurisdiction surrounding the issue. “But the State sets the rules,” Rosenau said, “for the region to abide by. That’s the way I look at it. And because with me, we do not in our county have any land ordinances that say, ‘Fred what can you do with your land or what can you do with your land.’ We don’t have any. Everything is the State…So with us, the only thing that I see with the Regional for us to enforce, I don’t like that. Unless there’s a law that says we have to abide by this, whatever the case may be. So to me, the State sets the rules and I don’t mind being a part of the Region, but it won’t be for us to enforce unless the State has it already in black and white.”
“Do you see any scenario where a local prosecuting attorney should have some input for enforcement?” Knight said.
Rosenau said that there was a certain amount of personal accountability with the issue of HOAs. “Well, this is the way I kind of look at this,” Rosenau said. “I’ve been looking at this for a long time. Ever since you brought it to my attention. When you bought your property, you knew what was there. So, yes, you signed into the Homeowners Association. So, that is back to the landowner. Anything from that point on, its whatever it is. Some of them down here, they have it right in their deeds. This is what you shall do.”
Knight said there was a need for reform in order to protect homeowners. “Everybody knows the need to do something,” Knight said. “I went to the Attorney General’s Office last year and I said, ‘Please, please, assign a staff attorney’ because we’re on their referral list. They get a problem and I had somebody call last night. There’s no place to even send people to. This person’s going to lose their house. Its nonsense.”
Knight said the issue surrounding the homeowner’s plight started small. “It started with a fine about 18, 20 years ago,” Knight said. “But they didn’t do it according to their governing documents and they have the 18 percent interest. They read it as 18 percent interest occurred daily like the IRS does and then they added court costs and then they added legal fees and now they’re to the point that the house is probably going to be taken over and owned by the HOA and then sold.”
“That stuff I don’t agree with either,” Rosenau said.
Knight also told the Commission about questionable fiscal practices engaged in by some HOAs. “It’s insane and then you got the idiots who get on the board and they decide that you don’t have a right to have your actual own bank account for the HOA,” Knight said. “Even though it says it in your documents. So, they’ve been putting it in their account for safe keeping. And the problem with that, is there’s no accountability. Surprise, surprise. And they’ve never been required to have an audit because the State never required them to have an audit.”
“That is why Mike would never own a house that has control by HOA because he just gave the speech, ‘Nobody is going to tell me what to do with my property’,” Rosenau said. “I bought that damned thing and I’m going to keep it the way I want it. So, to me, that’s one reason this Commission has to confirm, in just the speech that you just gave, is exactly that reason.”
According to Knight, the state estimates that between 70 to 80 percent of home ownership is impacted by an HOA. “That’s why the State should do something about it,” Rosenau said.