by Samir Knox | for the Missouri News Tribune
A bill in the Missouri House could allow homeowners from across the state to be freed from the constraints put on them by homeowners’ associations.
“If I could afford a helicopter pad for the property I just bought and I couldn’t build it, I’d be suing everybody,” Rep. Donna Baringer, D-St. Louis, said during a hearing on House Bill 1089, referring to building restrictions imposed on people by homeowners’ associations (HOAs).
Many members of the House Committee on Local Government criticized homeowners’ associations during a hearing Tuesday morning. The bill would create a standard for HOAs across the state and require them to incorporate as a nonprofit. It would also, broadly, compel homeowners to be more active in their HOAs through mandating a certain percentage of a community serve.
“I’m here today to urge you to vote in favor and consider HB 1089. If passed, HB 1089 will establish a Homeowner’s Bill of Rights within the state of Missouri,” said Phoebe Neseth, the director of government and public affairs for the Community Associations Institute, an organization that advocates for HOA members and other community associations.
The Community Associations Institute, according to Neseth, has been advocating for standard regulations across the country for HOAs.
“Each state has the opportunity to create and establish these types of acts that best impact their community associations, homeowners, volunteer board members and managers,” she said.
The bill is sponsored by Rep. Brad Christ, R-Sunset Hills, who said it could potentially erase all HOAs in Missouri.
Some lawmakers still raised issue with the bill, despite their personal experiences with HOAs.
“I don’t agree with everything with my HOA, we’re in the process of changing our bylaws, which is an extremely difficult situation,” said Rep. Gretchen Bangert, D-Florissant.
A clause in Christ’s bill would force all active HOAs to incorporate as a mutual-benefit nonprofit corporation. Bangert took issue with this clause, saying achieving nonprofit status would be a “big feat” for local HOAs to take on.
“I have a little bit of a concern with that … a lot of associations are not incorporated,” she said.
“Yes, that was a piece of the opposition to it, there’s a lot of rules that come together with a nonprofit association like that,” Christ replied.
The bill has changed since it was first introduced 15 years ago, according to Todd Billy, an attorney in favor of the bill. Billy said the bill would address restrictive covenants in cities like Kansas City and St. Louis, a practice that, according to the Metropolitan St. Louis Equal Housing and Opportunity Council, historically kept Black people from owning homes in many neighborhoods in the state.
An article published by the Metropolitan St. Louis Equal Housing and Opportunity Council — an organization that “seeks to ensure equal access to housing and places of public accommodation for all people” — outlined how deeds for houses often had specific clauses that prevented owners from selling, conveying, leasing or renting homes to Black people. Despite no longer being legally enforceable, many of these laws are still on the books to this day.
These laws are called “uniform restriction agreements.” The article states the city of St. Louis saw Black homeowners as a nuisance. These agreements had language that said some cites in the St. Louis region needed to “preserve the character of said neighborhood as a desirable place of residence for persons of the Caucasian Race.”
“If you’re on the St. Louis side, … most have restrictive covenants. On the Kansas City side, there’s usually a declaration of a homeowners’ association and then a declaration of conditions covenants and restrictions,” Billy said. “We’re not even using the same terms through the state. So because of that variety, what we consistently struggle with is associations’ inability to adapt — and properly balance its relationship — with homeowners.”
Billy addressed some concerns raised by lawmakers about title companies and how they often fail to notify homeowners about bylaws their neighborhoods have, including restrictive covenants imposed by HOAs. He said incorporating HOAs as nonprofits would fix this.
“So a nonprofit is actually very easy to form in Missouri. We are not tax exempt, so we don’t have to go through the IRS stuff. So in terms of creating a nonprofit, if I had my computer, I could do it in less than five minutes,” Billy said. “With title companies, (they) don’t know that there’s an HOA and the nonprofit statute already has very good protections.”
Billy said the bill could address the apathy many people have to their HOA, by giving the community greater control and investment in its management. It would require a quorum of at least 20 percent of households in a neighborhood for an HOA to function.
The bill would also mandate a two-thirds vote to pass a raise in the fees charged. Billy used the example of an unincorporated municipality in St. Louis County that brought an internal dispute in their neighborhood to court.
“Their burden on the government is absolutely tied to the HOAs inability to help,” he said. “Instead we empower the owners too, the board proposes a budget and the owners can reject it, which is the same thing we’ve been doing for condos since 1983.”
Arnie Dienoff, a self-identified public advocate and frequent witness during public testimony at hearings, testified against the bill.
“Homeowners associations are a mess, but they’re the (most local form) of governance in our state,” Dienoff said.
While he agreed with much of the bill’s language, like requiring more participation and notifying homeowners of the bylaws in their community, he was concerned by a clause in the bill that would require an audit of an HOA every three years.
“In my HOA, we’ve never had a financial audit and that’s going to be very expensive and very cumbersome for HOAs that are, I would say, 1,000 homes or less,” he said.
HB 1089: Establishes the Missouri Homeowners Bill of Rights
Sponsor: Rep. Brad Christ, R-Sunset Hills