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CALL 6: Homeowners say state can't do enough about HOAs

Posted at 4:37 PM, Jul 24, 2017
and last updated 2017-07-24 20:41:29-04

INDIANAPOLIS -- Some Hoosier homeowners believe the Indiana Attorney General’s office does not have enough authority to intervene when they’re having a problem with their homeowners association, or HOA.

Approximately 960,000 people in Indiana live in a neighborhood with a community association, and these residents pay $1.1 billion a year to maintain their communities, according to the Community Associations Institute.

Homeowners associations do a slew of things including setting rules for fences, and supporters say they help protect and enhance property values.

However, some Hoosiers believe the state of Indiana is not doing enough to intervene when there is a problem with an HOA.

More than 95 consumers have filed unverified complaints with the Indiana Attorney General’s office about HOAs since 2016, records show.

However, most complaints are closed because of insufficient evidence, no violation found, or the agency does not have jurisdiction, records show.

"Complaints related to ‘I don't like how high the fences are or what they will let me do with my fence’, those are not really things the Attorney General's office can do anything about," said Betsy Isenberg, director of Consumer Protection for the Indiana Attorney General’s office.

Isenberg said it’s a misconception that the state can intervene in many HOA issues.

“A lot of the other complaints we receive are ones where people are just unhappy about their homeowners association,” said Isenberg.

Isenberg explained Indiana law allows the Attorney General’s Office to take action involving an HOA only on five specific things such as if an HOA intentionally or knowingly misappropriates funds, if the HOA violates its requirements related to budgets, or fails to properly use proxies.

"Unless it involves some kind of knowing or intentional action of fraud or misappropriation of funds, or a violation of the homeowners associations statues, our office doesn't have any enforcement power to take action on those cases," said Isenberg.“If we determine that there are alleged violations that we evidence to support, we can bring an action in the court in the county where the HOA is located. If funds have been taken, we can seek restitution for the members of the homeowners association for those funds.”

The office can file a lawsuit against an HOA or its boards members.

The last time the Attorney General filed such a lawsuit was in February 2016 against the former board president of the Delaware Crossing Homeowners Association in Fishers after he was criminally charged with stealing nearly $25,000 from the HOA.

Court records show Glenn Taylor was arrested for theft and conversion, entered pretrial diversion, and the case was dismissed.

The state of Indiana obtained a judgment of $250 in civil penalties to the AG’s office.

Taylor paid $26,696 in restitution to the HOA, according to the Attorney General’s office.

Call 6 Investigates was unable to reach Taylor for his response.

Meanwhile homeowner Thomas King said he is confident he will prevail in a dispute with his west side HOA, Windham Lake One, in Marion County.

King has lived in Windham Lake for 15 years.

“To be honest with you, it has not been a very pleasant experience whatsoever,” said King.

King said the HOA is inconsistent about enforcing its covenants.

“I’ve had neighbors who have gotten letters for weeds in their own flower gardens,” said King. “They’re overly strict, and the people they don’t like, they seem to pick on more,”

King said he pays $154 a month for dues, but despite years of paying, he said the HOA refused to fix his driveway, even though King said they’re responsible for maintaining the exterior of his home.

“I'm sure there's some good HOAs out there, but I can tell you this has not been a very nice HOA," said King.

King’s filed a complaint with the Indiana Attorney General’s office alleging fraud.

King filed the complaint in September 2016, and records show, the AG’s office is still investigating the case.

“I know I’m right,” said King.

King also filed a lawsuit in small claims court against Windham Lake One and King won a $4,128 judgment.

King said he is appealing because the judge did not require the HOA to pay for his driveway replacement, only attorneys’ fees.

Call 6 Investigates Kara Kenney called, emailed and left business cards for past and present HOA board members, but was unable to reach anyone.

“I would love to discuss these matters with you.  However, both are still open legal matters at this time,” said Scott Tanner, attorney for Windham Lake One. “I don’t feel it would be appropriate to discuss these issues in the media until a decision has been made in each matter.  I hope you can understand our position.”

Betsy Isenberg of the Attorney General’s Office said if people are frustrated with the Attorney General’s office limited ability to intervene, they should contact their state lawmaker to get the law changed.

“That is an issue for the legislature, not for the Attorney General’s office to address,” said Isenberg.

She also encouraged people to file complaints about their HOAs, even if they’re unsure whether the state has jurisdiction.

Community associations are private entities, not government, and assessments paid by association members cover the costs of common area maintenance, insurance, landscaping, as well as savings for future needs, according to the Community Associations Institute.

To avoid an HOA nightmare
• Research the HOA before you move in
• Get educated by reading the covenants, bylaws, and attending HOA meetings
• Elect board members or run for a position yourself
• Get approval before you make changes to your home
• Pay your dues on time

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