Always Read the Fine Print
So this story is about a property I own, but rent out. This may sound strange, but I don’t think I could afford to live there these days as it’s become somewhat exclusive. A million years ago my property was part of a large farm. I bought it about 30 years ago, long after the farm was broken up, but before there was any development near it.
The piece of land I got was near the back entrance that joined into a dirt road that ran past. The more expensive plots were near the tarred road in the front. I originally bought a large chunk of the land intending to do some farming, but that never happened. About 20 years ago, some of the owners got organized (We’ll call them the Organized Owners, OO) and had the area designated as a municipal suburb. That’s when everything started to change…but not for the better.
The municipality agreed to put in tarred roads, water, and electricity if a certain percentage of the properties were developed. A construction company (linked to the OO) went around contacting the owners who had land but no buildings, offering to build houses for us at a very (very) reasonable price—contingent on them getting a certain minimum amount of people signing up.
While this was happening, one of the OO approached me and offered to buy half of my property. I agreed, and the money I got for the sale (which was about four times what I’d paid for the entire chunk of land 10 years prior) combined with a small loan from the bank gave me what I needed to pay for a house to be built, and it was a fairly large and nice house too.
I stayed in the house for a few years, and my mom moved in with me. I had decided to subdivide the property again and build her a house next to mine, but then tragedy struck. Unfortunately, an un-diagnosed tumor took her before the house could even be started. Soon after she passed, we moved out of the house and started renting it out.
About a few weeks before we moved out, the OO I’d sold the land to started talking about starting a Home Owners’ Association. I wasn’t interested and left soon after. About two years later, the neighbor OO contacted me. There were two roads entering the area these days: the original tarred road that was near where the farmhouse had been and was entered from a fairly busy main road, and my “dirt road back entrance” which was now a tarred entrance from a wide but not very busy municipal road.
The HOA was trying to get the old farm road blocked off to improve security and decrease through-traffic, and they wanted the road next to my property to be the main (and only) entrance to the HOA community. And they were pressuring me to join. I said no, and I was adamant, and eventually they accepted that but told me they wanted to have a sign near the road welcoming people to the neighborhood.
Well, the only practical place to put it was on the edge of my property. They also wanted to build a little guard hut and have a security guard permanently monitoring who went in and came out, and they wanted to build his shed on my property. We came to an agreement whereby they would mow the lawn and pay the equivalent of about $35 per month in exchange for the land they needed.
I was very happy with this arrangement, since the property was fairly large, and it didn’t really cost them anything since they already had a full-time gardening service servicing the HOA. This all happened over a decade ago. They eventually got the other main road blocked off, and the HOA is paying for rent-a-cop to be permanently stationed close to my property, as well as mowing my lawn and paying me enough money for takeaways for the family each month.
I’m occasionally contacted by members of the HOA to get me to sign up, but I’m really not interested. My property has been rented to the same tenant for all these years and everything there is going well for me. Until one terrifying day. Three years ago, someone scared the heck out of my tenant’s young daughter by making strange noises and shooting a gun by her bedroom window three or four times over about a month.
This scared my tenant and I guessed it scared the HOA because they AND my tenant contacted me with a proposal: I join the HOA and they give me exclusions from the HOA rules, including exclusions from paying the monthly fees, and in addition they will build a wall around the ENTIRE HOA neighborhood, including electric fencing and security cameras.
They told me they had wanted to do this for a while but were unwilling to build the wall on property that was not in the HOA. I couldn’t see the downside, and so agreed. I would live to deeply regret this. It took a little over a year to build the wall and get everything completed, which is quite fast. And then a month to the day after everything was done, my tenant got an HOA warning about his dogs barking.
He told the HOA that while the property was in the HOA, it was exempt from the rules. The HOA told him that they had canceled the exemptions, and that he had 30 days to comply. He contacted me, and I opened some mail I’d gotten from the HOA (I’d ignored it since I was supposed to be exempt from the rules and fees). Man, did I get a surprise.
They had indeed retroactively canceled the exemptions, and were claiming: That I pay late fees going back over a year, that the agreement had been canceled, and that they were retroactively canceling it a year back because the HOA contract allowed them to use “small unused portions” of HOA members land for the common good for free, and that I refund them the money they had paid for the easement over that period.
They also claimed that I owed them money for the garden service mowing the large lawn, and that I would be fined for each infraction my tenant failed to remedy. This started an expensive process involving lawyers and the court system. It ended with a judge telling me something infuriating. That what the HOA had done was mostly OK.
Basically, they had the right to revoke the exemptions, but that they had to give me 30 days’ notice. As I was walking to my car, the neighbor OO (the one who bought half my land so many years ago) told me that I was stupid to have refused to join when the HOA started, as I could have been a founder member (whatever that means), and that next time I should be sure to understand the documents I sign before signing them.
To be fair, neighbor OO was right; I should have read the contract better. Also, I was interested in what it meant to be a “Founding Member” (spoiler: Nothing), and so when I got home I grabbed the HOA contract I’d signed, as well as all the other documentation they had provided me with, and started reading. I was determined to break every rule I could find a loophole to break. I didn’t have to even get past the first page.
While the street address of the property is used to identify it for all practical purposes, in the city records it has a unique property number that has to be used on official records. When my mom moved in, I’d subdivided the remaining property but hadn’t yet started building on it. And when I gave the HOA the easement all those years ago it had been on the property I’d sliced off for my mom.
And when the HOA set up the contract, they had simply used the property number from the easement. The next afternoon, the neighbor OO delivered (and had me sign for) two documents—one telling me that my exemptions would expire in 30 days, and one letting me know that the easement would no longer be required after 30 days.
I think he was being a bit malicious here, because I lived about an hour away from the property, and he drove out himself. Still, EXACTLY 30 days TO THE HOUR after the HOA had given me the 30 days’ notice, I knocked on the neighbor OO’s door (did I mention he was the president of the HOA?) and had him sign for two documents. The first was that I planned to build a house on my HOA property (which confused him) and the second was notice that they had 30 days to remove from the property the guard shed, the parts of the electric boom that were on my property, as well as the sign.
He tried to engage me but I ignored him, climbed into my car, and drove off. Early the next morning I got a call from the HOA lawyer who explained to me that their junk would be staying on my property since it was in an “unused” part of my land. I explained that I was building a house there, and that the land would not be unused anymore.
I could hear the smirk as he told me that building a second house to be spiteful would not be accepted by the courts. But my response was better. I sure hope he could hear the smirk in my voice when I told him that the property in question did not have a house, and was, in fact, barely large enough for a house to be built and would not be large enough for any extraneous buildings.
I then told him to go look up the property in question and call me back. I had sliced off just enough to be allowed, which was just enough to build a small house. It took them just under five days to get back to me. Their lawyer told me that the terms of the easement meant that I could not cancel without their permission, so I emailed him a photo of the document they sent to me… canceling the easement.
That afternoon, Neighbor OO invited me to lunch (his treat) to discuss the problem. I said “No thanks.” He extended the offer again two days later, and again I said “No thanks.” Others of the original OO contacted me to try to talk. Some sounded aggressive, some sounded sympathetic. I said “No thanks” to each of them. Eventually, the lawyer phoned and asked if we could come to some sort of arrangement.
I asked what he had in mind, and he told me that he was prepared to discuss exclusions in exchange for access to my property. So I said “No thanks, and please don’t call me again.” About nine days before their 30 days were up, I got a call from a different lawyer. He said he wanted to “negotiate a surrender” (his words, not mine). I agreed to meet him at his office the next day.
I’d already had documents drawn up, and the meeting was as simple as me giving him the documents and him reading them over. When he read it, his face went white. My new easement offer: Included everything offered by the old offer, and I changed the line “mow the lawn” to “get the property to HOA standards and keep it there” since it was now in the HOA.
This would cost them about $500 per month instead of ~$35, and this amount would increase with inflation (the previous contract didn’t include that bit). When canceled, for whatever reason, the HOA would have to pay me a cancellation fee of around $7,500. The contract automatically terminated 30 days after any disciplinary action was taken against me, my tenant, or the property (“the property”), any complaints were levied by the HOA against the property, and the HOA would pay all my fees if any court action was taken against me.
I’d deliberately left some insane things in there so that I could appear to “concede” some points or be negotiated down when the HOA got indignant about the points I actually cared about. The lawyer didn’t look happy. He said that my proposal sounded unfair, but that he’d have the HOA president look at them. I reminded him that in eight days I’d be setting a group of men armed with sledgehammers and anger management issues loose on whatever of theirs was still on my property. But it was far from over.
That evening, I got an irate call from the HOA president. He told me he was never going to sign the new contract. I said “OK.” He then told me I was charging too much per month, and that it should be at the same rate as the previous contract. I pointed out that when I signed the previous contract the area was under development, and there was at least one other road leading in and out, but that now there was only mine.
And besides, mine was now developed with everything they needed. He told me that I was forcing them to sign a document they didn’t want to sign. I told him that he was free to not sign it. He whined about everything he could think of. And then eventually told me I’d be hearing from his lawyer. The next morning Surrender Lawyer called to ask if I’d be willing to come to their offices to sign the contract.
I agreed. When I got there that afternoon I learned that Surrender Lawyer was not a lawyer, but a Paralegal. He handed me the contract and asked me to sign it. He laughed when I told him I’d have to read through it first to make sure nothing was changed, and mumbled something that sounded like “I’m sure you would.” I read the contract. Nothing had been changed.
NOT A SINGLE THING. And the HOA president had signed it, with the Surrender Paralegal signing as witness. I looked at him and said “Why did he sign this? It was stupid to sign it!” His response blew my mind. The guy looked at me and said, “I started telling him that signing it would be a bad decision, but he told me I wasn’t being paid to think or give advice, and to shut up. So I shut up.” I said, “Do you understand what he’s signed here?”
He looks at me and nods. He said, “I asked him if I should have one of the lawyers look at it before giving it to you, and he told me that we had already billed enough for this and that he’d sign it and sue me after their easement was safe. This happened about a year and a half ago. It took 6 months for the HOA to find out how screwed they were.
They wanted to sue me, but their lawyers explained to them that there was no way to win. Even if the court sided with them, all they would get is the contract voided, and they did not think that the court would side with them. The lawyers were adamant about one thing—the HOA could not live with the “HOA pays my fees if action was taken against me” since it didn’t limit the people taking action against me to the HOA.
As worded, the HOA would be forced to pay for my fees if ANYONE took action against me. They argued that the courts would probably not enforce that, since the context of the agreement was to do with the HOA, and I told them I was prepared to find out since the HOA would definitely be the ones taking action against me if they challenged it.
I eventually signed an addendum to the contract that said that the neighbor OO (HOA President) would personally pay all my fees unless he held no position in the HOA, and that the HOA would pay all fees if the HOA took action against me. He resigned from the HOA at the end of that meeting. This is where the best revenge came. I politely told him in front of everyone that he should not sign documents unless he understands what he’s signing.
He didn’t look pleased. It came out during the mediation (you cannot imagine how happy the lawyers were that their paralegal was mediating) that without the ability to control access to the HOA neighborhood through the security boom (partially) on my property (the HOA had become a “gated community” a number of years back) the HOA would be in breach of their own articles and would be dissolved.
I also learned (should have been obvious to me) that all the security cameras were wired, and all terminate in the guardhouse/guard shed. So basically, it was my way or the end of the HOA. That first mediation was really quite funny. My paralegal looked more than a little glum as we assembled and he called everyone to order. I suspected that he had been told to work against me, so I took the initiative.
I reminded everyone there that I had agreed to let the paralegal mediate, but that I had agreed to no arbitration at all. If I didn’t feel like the proceedings were fair I’d leave and they could go ahead and sue. The paralegal brightened up and things actually went quite well. I’m writing this after getting home from the latest mediation. I built a “paddling pool” for the neighborhood dogs.
As in, I made it myself. I dug a hole, packed it with stone, and added a concrete finish. It was my first attempt, and if I say so myself, it looked…well, terrible. But this played right into my hands. The HOA called for a mediation meeting (what they do now instead of taking official action. I’ve declined their mediation requests in the past) in which they told me, as nicely as they could, that the paddling pool was an eyesore right at the entrance of the HOA.
I asked them to create a list of what needed to be fixed and how it needed to be fixed to give to me at the next meeting. The list was extensive. It basically required the pool to be rebuilt from scratch. I asked them if there was any way to reduce costs on the work they needed to get it up to HOA standards, and they assured me there was not.
I thanked them, pulled out a copy of the agreement where they had agreed to “get the property to HOA standards” (which I’d highlighted) and handed it to them with the list. I told them the HOA usually preferred if these things were dealt with within 30 days. They started arguing until the mediator reminded them that they could not force me to comply without causing the easement to end.
I should mention that their lawyers usually no longer attend these things. They said they would get it done. I also learned a lot about neighbor OO. I found out that Neighbor OO sold his property about 3 months back, and is apparently leaving the country for Australia. I found out that the HOA had successfully sued him for a load of money they had lost to his mismanagement as part of his vendetta against me.
I also learned that he had a vendetta against me. I have no idea what I did to upset him. I’m not sure if I will screw with the HOA anymore. I already think I’m so close to breaking them that the only thing stopping them from canceling the contract is the massive financial loss if they do. I guess a lot depends on how they treat me and my tenants going forward.
Also, I do like the monthly payments, though, so I’m motivated to play nice. Neighbor OO was right, though, in the end. You really shouldn’t sign documents unless you understand what you are signing.