Homeowners Associations and Property Rights

Last week, the Minnesota Legislature dealt with a bill that would restrict homeowners associations’ ability to restrict the appearance of homes within the association and would eliminate associations’ ability to enforce rules and regulations through fines.  Although the Senate version of the bill passed out of committee, the House version was tabled in committee, effectively killing its prospects for passage in this legislative session.

I have no doubt that the impetus for this legislation is a concern over homeowners associations’ perceived lack of respect for private property rights.  Certainly, the outrageous news stories about associations who have gone way too far in regulating residents’ conduct have fueled this concern.

Speaking as someone who is an ardent supporter of private property rights and a resident of an association-controlled neighborhood, I believe that, if properly governed, homeowners associations are protectors of property rights.

Here’s my story:  almost five years ago, my wife and I moved to a planned community in Albertville, Minnesota called “Towne Lakes.”  Towne Lakes resembles an old 1940s neighborhood and includes boulevard sidewalks (and trees), colorful and unique house designs.  It also has its own parks, a community center, swimming pool and dog park (called the “Bark Park”).  To pay for these and other amenities, an association was formed to collect assessments from residents.  In addition, the association Board is charged with enforcing various provisions of the association’s governing documents.  The Board has the power to impose fines for rule violations and to foreclose, if deemed appropriate, upon such fines. 

Why would I want to live in such a neighborhood?  Because while my wife and I have always kept the spiffiest looking house and the most beautiful yard around, the properties surrounding mine also have an effect on my property values, and if my neighbor chooses to paint his house Pepto-Bismol pink or park an old rusty Winnebago RV in his driveway, if I want to sell my house, not many folks are going to want to look at that.  So we found a neighborhood that required approval of an Architectural Review Committee (“ARC”) if a resident wanted to change siding or shingle color.  In addition, our Declaration prohibits driveway parking of boats, trailers, campers and RVs. 

In my opinion, the key to whether a homeowners association is respectful of property rights or not lies in the individuals who serve on the Board.  I’m currently on our Board and certainly my support of property rights colors all my decisions as a Board member; I’m not alone in my viewpoints, either.  True, our Board has had a bad apple or two over the years that wished to dictate their personal views on their neighbors, but those people slink away rather than face almost certain defeat at the hands of their fellow residents.

Minnesota law already regulates homeowners associations enough.  The law requires that homeowners association documents be provided to a prospective buyer upon execution of the purchase agreement.  Furthermore, buyers have a three day window in which they can rescind the purchase agreement following their review of the governing documents.  Hence, participation in a homeowners association is purely voluntary; if you don’t like associations, then find a home or neighborhood which is not located within one. 

I’ll be watching carefully next session to see if these bills come up again.  If so, I’ll be contacting my elected officials and ask that they vote no.