Article Courtesy of The San Diego Union-Tribune

By Emmet Pierce
Published April 15, 2005

McKenzie, who teaches political science at the University of Illinois at Chicago, is an expert on the growth of residential associations in America. Elected by members who often pay little attention to association activities, homeowner boards throughout the United States function as local governments, making land-use decisions that once were left to city councils and planning commissions, McKenzie said. With little legal expertise, they often rely on the advice of attorneys who specialize in housing law.

"The problem is there are a small number of law firms that are really aggressive about this," the educator said. "There are many lawyers who are reasonable. They will talk to people and work out payment plans. But there are a number of law firms that specialize in collecting assessments and they will force you into foreclosure as quickly as they can. They charge tremendous fees. All fees are paid by the delinquent homeowner."

It's a case of the punishment not fitting the crime, said McKenzie, who once worked for the San Diego County District Attorney's Office.

"I understand that people who are foreclosed on typically don't pay their assessments. I am saying foreclosure procedures do not need to be initiated to get them to pay."

Critics say associations are too willing to pull the trigger on their biggest debt-collection weapon. A survey conducted in 2001 by Oakland-based Sentinel Fair Housing examined Alameda, Contra Costa, San Mateo, Santa Clara and Sacramento counties. It found that $2,557 was the median amount of back assessments due on foreclosures conducted in private communities. In contrast, the subjects of more than 4,000 foreclosures outside such communities owed a median of $190,000.

San Diego attorney John Epsten, a longtime legal representative to homeowner associations, dismissed the notion that lawyers are pushing for more foreclosures.

"Anybody who tells you that an assessment collection is a profitable and rewarding part of their legal experience simply has not done enough of them," Epsten said. "Our firm offers that as a service to our clients. It is not a profitable business to be in. The only thing we typically are doing is processing paperwork."

McKenzie says the problem goes beyond foreclosures, however. Boards and their legal representatives sometimes interpret rules too rigidly, he contends.

Public awareness of association governance issues began building after the Sept. 11 attacks on the World Trade Center, he recalled. Around the country, many residents came into conflict with their governing boards over decisions to display the American flag in violation of association rules.

"That was, in fact, a watershed event, because it happened all over the country."

With Americans united in their anger over terrorism, demands to remove the flags seemed unreasonable, the educator said. "In political science we call this a policy window. Something happens that focuses attention on a problem."

While association laws vary from state to state, using foreclosure to collect homeowner association debts is a common practice, McKenzie said. Because of growing public awareness, reform "is going to happen. There's no doubt about it."