Associations Suffer as Homeowners Do

With Residents in Foreclosure or Not Paying Dues, Groups Face Hard Choices

Shirley McCoy stopped paying her homeowners association fee six months ago.

She figured she was doing the job the association should be -- filing complaints against neighbors who violated the rules, cutting the lawn of the foreclosed house next door and picking up litter in common areas -- so why bother paying dues?

"They think everyone has to be subjected to the way they are used to living," she said of her less-than-tidy neighbors. "It doesn't look good when you are trying to maintain your property and you look across the street and there's trash out front, the screen door is falling off, and the shutter is off the hinges. That's devaluing our property."

She doesn't think she is adding to the problem by not contributing her share. It's her pocketbook protest until things turn around. "I'm pretty sure I'm not the only one who isn't paying it," McCoy said.

She's right. Ten percent of her neighbors in the Dale City subdivision are delinquent on dues, according to Carlos Labiosa, the resident manager of the neighborhood association.

That means the Barksdale HOA has to give up amenities it can no longer afford, including its private security patrol. It also scaled back on landscaping and chose not to repair aging playground equipment.

"They didn't have much to give up," Labiosa said. "There's only so much you can cut. And what good would it do to raise fees if they can't pay it?"

Barksdale is one of the nation's roughly 300,000 community associations, many of which are yet another casualty of the housing downturn. They are strapped for cash as residents enter foreclosure or choose not to pay their association fees in an effort to hold on to their homes. Struggling homeowners know they can get away with not paying, because it will take awhile before the association catches up to them.

Like local governments, homeowner and condominium associations have to choose between increasing fees or reducing services.

Some are holding off on pool upgrades and clubhouse renovations, limiting insurance coverage and renegotiating contracts for fewer services at a lower fee. One Prince William subdivision opened its pool to the public, offering memberships so it can keep the pool from going dry.

In some cases there's little left to cut, so HOAs are covering only the essentials, such as trash pickup and snow removal.

More than providing services, associations are designed to protect property values and provide amenities many homeowners can't afford on their own, including pools, tennis courts and clubhouses, according to Frank Rathbun, a spokesman for the Alexandria-based Community Associations Institute.