I received an email the other day asking for my expert opinion on a proposed application questionnaire for HOA renters. I replied by asking if the questionnaire would apply to buyers, also, to which the emailer responded, Yes. Here are the areas of concern as to what should be asked of applicants:
1) Requiring a stated income level (i.e., $30,000, $50,000, $70,000 and so on):
2) Requiring last two year’s tax returns:
3) Please comment on credit score section (Page 1, #3):
4) Please comment on 30-day completion time:
5) Please comment on personal interview by board of directors:
6) Please comment on statement concerning “board’s decision will be final and no reason will be given (i.e., denial).” This statement is immediately above signature line on Page 4:
I responded with:
Adopting such an approach would befit an exclusive community — for those few good men, and women. It would probably reduce the desirability for the general public, but may attract the few. It would also hurt sales by existing owners. I believe the promoters of planned communities going back to the gitgo knew that HOAs were not for everybody, but they were interested in the mass merchandising of HOAs to everyone.
Financial status was already checked by the mortgage insurers, so it buys the HOA very little in any greater protection. Maybe in regard to getting some assets from the unethical, in my onion, foreclosure auctions.
However, it will allow a people to people discussion to get a better “feel” for one another. But, then again, only half the story would be told, since there does exist this unspoken alliance of “No Negatives About HOAs.” For example, would the board be willing to say to prospective members, “You understand that your home will be collateral for the survival of the HOA?”
It would be interesting to know how this approach plays out.
HOA Constitutional Government 