“Need I say more! This would lead to chaos,” a neighbor fretted in an e-mail about the precedent that would be set if the sign wasn’t removed. “Our property values would be put at risk.”
Such HOA disputes are as suburban as cul-de-sacs and two-car garages, but few metastasize into legal battles that spend years in the courts, break legal ground and bankrupt the HOA.
Most damaging of all, though, was a move probably unprecedented in area neighborhood feuds: The common area that is the literal and metaphoric heart of Olde Belhaven was put up for sale last year to settle its debts. It appeared that “the square,” as some called the neighborhood, would no longer have a square.
“It destroyed our community,” Maria Farran said.
The battle lines in Olde Belhaven were starkly drawn. On one side, the Farrans said they were standing up to an HOA run amok. On the other, HOA supporters saw a couple that inflicted financial ruin on the association — and their neighbors — to make a point.
Experts say such feuds are becoming more common with the tremendous growth of HOAs, which typically require residents to sign covenants governing architecture, landscaping and other matters when they move into an association neighborhood. The HOAs collect dues and often have the power to fine residents who don’t comply with the covenants.
There were 10,000 association-governed communities in the United States in 1970, and by 2012 the number had reached 324,000, according to the Community Association Institute. One in five Americans lives in a neighborhood governed by an association.
“Their growth means there are a lot of people in HOAs who haven’t necessarily bought into the lifestyle,” said Evan McKenzie, a University of Illinois professor who has written two books on HOAs. “Some like the higher level of rulemaking, but others don’t like the fines and control. You have conflict when these groups come together.”
One community, two camps
Sam and Maria Farran, a wine broker and a government lawyer, moved to the 44-unit townhouse community in the Alexandria section of Fairfax in 1999. In many ways, it is a typical Northern Virginia neighborhood, with tidy houses and a mix of government employees, service members and professionals.
The townhouses line the three-quarter-acre square, which is the neighborhood’s central feature and the site of most community-wide events. Without the green plot, it might be difficult to call Belhaven a community.
The Farrans said the HOA had a reputation for hard-line stances. In one case, board member Don Hughes compared some residents’ refusal to install window-pane dividers to the “cat and mouse game Saddam Hussein played with the USA,” e-mails show. Ultimately, Hussein “paid the price,” he said, concluding that the residents should comply.
Nevertheless, the Farrans were surprised when letters arrived in October 2008 telling them and others that their political placards were too large.
“This is our final request,” Hughes wrote on behalf of the board.
E-mails show that Hughes pushed the board to act. He wrote that he was prepared to make a motion to put a lien on the Farrans’ house if they didn’t comply. He called sending a letter a “teaching moment.” Hughes declined to comment.
The Farrans were angry. They acknowledged that the sign broke the rules but said it seemed like an assault on free speech to go after a minor violation during the height of an election. Their response: cutting the placard in half. They planted “OBA” and “MA” signs in their front yard.
The prank did not amuse board members. And they decided to act.
They passed a resolution allowing the board to fine residents up to $900 per infraction for violating HOA guidelines. Across the country, fining authority has been controversial, with HOAs hitting residents with levies for such transgressions as displays of colored Christmas lights and patches of dead grass.
Board members believed that they had the right under Virginia law, but the Farrans saw an illegal power grab that had no basis in the HOA’s covenants. When the board, acting at a meeting that was not publicly announced, rejected the Farrans’ roof and deck projects for aesthetic and architectural reasons, the Farrans said it was retribution.
“It’s like we weren’t living in America,” Maria Farran said. “You are always one board election away from a tyranny. They wield enormous power.”
The Farrans filed a lawsuit against the HOA saying it didn’t have the authority to impose fines and had vindictively rejected their home improvements.
Board members were taken aback. They saw residents who wouldn’t abide by the rules that had made Olde Belhaven a great neighborhood and who were willing to resort to drastic action to get what they wanted.
Archie Umphlett, one of the neighborhood’s oldest residents, put it this way: “When it comes to the Farrans, it’s their way or the highway.”
A costly conflict
The legal fight consumed Olde Belhaven.
The Farrans said HOA backers told them to move. They found bullets in their yard. Someone implored a priest at their church to prevail on the Farrans to stop the lawsuit. A local real estate agent said the infighting was scaring off some home buyers.
“It was a crusade,” a supporter of the Farrans said.
On the other side, board members said that the Farrans were unreasonable and that they declined numerous offers to begin settlement discussions. And as the case ground on, the HOA increased dues from $650 a year to about $3,500, mostly to cover legal fees.
The board’s former president, Jim LeBlanc, said the situation put a strain on some elderly residents living on fixed incomes. “Some had their health impacted,” LeBlanc said. “There’s a sense of, what is it going to take to resolve this? This was a tragic nightmare.”
The Farrans said that they, too, had made attempts to settle matters but that those overtures were rejected by the HOA.
In 2010, a county judge sided with the Farrans on the fining issue. The case set a Virginia precedent that HOAs cannot claim powers, such as fining, that are not specifically laid out in their covenants.
The roof and deck issues, which had been spun off into a separate lawsuit, were decided in 2011. Another county judge ruled that the board’s votes to reject the home improvements were improper because they came at a “secret” meeting and followed arbitrary standards.
The HOA was on the hook for about $100,000 to cover the Farrans’ legal fees, and it owed hundreds of thousands more for its own legal expenses. The HOA was financially ruined.
LeBlanc said the association didn’t have the money to cover the bills, so residents voted for bankruptcy.
Late last year, a court-appointed bankruptcy trustee put the community square up for sale to cover the HOA’s debts. The pleasant square, with its trees and benches, had in better times been the site of community picnics and Christmas festivities. Now it was a reminder of the community’s plight. A red-and-white “For Sale” sign drove home the point.
A developer began negotiations to buy the plot but pulled out. The developer had received anonymous threats. Then, a former board president stepped in and put up a gift of $60,000 to facilitate a settlement.
A judge approved the plan, but the Farrans filed a motion Friday opposing the settlement because it relied, in part, on the use of capital funds. What will become of the square remains an open question.
But the damage was done. Large gatherings on the square have all but ceased, LeBlanc said. For now, individual residents are paying out of pocket for the plot’s water, electricity and maintenance.
The Farrans have built their deck and their new roof. And Olde Belhaven is set to begin discussing what form the HOA will take as it emerges from bankruptcy. LeBlanc hopes the wounds will heal in time.
“There really, truly was a sense of community here,” LeBlanc said. “That was truly lost in this process.”