MINT HILL, N.C. -- For Rosanna Wilfong, it started a decade ago. Her front yard was flooding. A pool of rainwater swelled until it was knee-deep. So she hired a company to install a French drain -- a kind of underground trench with a pipe to channel the water away from the foundation of her home.
She said she spent $6,500 to install the drainage system. Her homeowners’ association forced her to spend another $6,500 tearing it out.
It was only the beginning of a years-long legal battle with her HOA that ate up more than $50,000 in legal bills and almost cost her her home.
North Carolina is at a tipping point for homeowners associations. The number of homeowners living in neighborhoods governed by HOAs is now greater than those who live outside those neighborhoods. The story of how Wilfong came close to losing her home illustrates why HOA battles have become personal.
It also shows lawmakers have not heard the last of the bitterly divisive issues that pit neighbor against neighbor with attorneys on all sides. Her lawsuit opens a window on HOAs: Quasi-governmental associations that carry the big stick of foreclosure and are drawing scrutiny from state lawmakers.
“They can ruin you,” said Wilfong.
Money Down The Drain
Simply removing the French drain didn’t satisfy the HOA board in Mint Hill’s St. Ives neighborhood.
Wilfong, a grandmother, has documents to show the HOA asked her to grade the land. She said grading the front of the property would have led to the same flooding she was trying to correct.
She said the conflict ultimately was not about flooding and grading and French drains.
“It was about the money,” she said. “They wanted their money.”
She’s referring to fines, which racked up at the rate of $400 per day, according to court documents.
“They got to be $589,000,” Ms. Wilfong said. “The house wasn’t worth that much….I knew I was going to lose my house. We were all packed up.”
Ms. Wilfong hired one attorney, then another, then a third. When her lawyer got documents from the HOA, she made a startling discovery. The HOA’s architecture review committee had approved the French drain.
“I felt betrayed by the homeowners association,” she said.
In a ruling earlier this year, Judge Richard Boner waived all the fines and she got to keep her home. But she still had to pay for her attorneys.
“This is a cash cow for the lawyers and the management companies,” said Chris Zbodula, who served on the St. Ives HOA board before having his own dispute. “They’re making an absolute killing on this.”
The St. Ives HOA board kicked Zbodula off the board for missing meetings. He says the real reason is that he challenged the president for suing neighbors like Ms. Wilfong.
“The only choice a homeowner has is to dig deep in their pocket with tens or even hundreds of thousands of dollars for what could be bogus charges,” Zbodula said.
The Law And The Enforcers
“There does seem to be an imbalance here,” said state Rep. Jonathan Jordan, a Republican from Ashe County who co-chaired a House study committee on HOAs. “The volume of complaints is what impressed us. There were probably complaints from every legislator’s district.”
Rep. Jordan said there were complaints from HOA boards about deadbeat homeowners who did not pay their dues or keep up their properties. But the vast majority of complaints came from homeowners, angry at rogue boards misusing their authority.
Rep. Jordan said the House tried to address the complaints in a bill that passed unanimously, only to languish in the Senate. But he said the whole section of the law governing what are known as “planned developments” needs to be reviewed, in his words, “from top to bottom.”
In part, that’s because HOA boards are insured. Also, HOA dues pay the attorneys who represent them and the management companies who collect the dues. If there’s a legal fight, homeowners have to dig in their own pockets to hire an attorney to ward off foreclosure.
And unlike a town council or a county commission, HOA boards do not meet in public, do not release financial records to public scrutiny and are not subject to the prying eyes of outside monitors, be they lawyers, reporters or auditors.
Rep. Jordan recommends homeowners read the HOA covenants very carefully before buying a home within that HOA. But those rules are subject to the interpretation and enforcement of a board made up of your neighbors – a board that is subject to change.
“In a year or two the board could change out,” said Chris Zbodoula, “and you could have some tyrant running the board.”