Friday, December 31, 2010

The Homeowner’s Association - By Lee Y. Greene, Jr.

An installment story about my hometown in North Alabama.

Hartselle, Alabama is like most other places of 12,000 or fewer souls in the South. Most everyone is moderate to middle class, as the area prospered only when the Tennessee Valley Authority came in the 1930’s to change our area from an agrarian economy to a service economy. With the advent of the aerospace and defense industries in a nearby county, our hometown evolved into a bedroom community.

Folks live here, but work and spend their day elsewhere. Because of this suburban evolution, we have lost the days of porch sitting and story telling, now that we commute and no longer really know our next door neighbor. That doesn’t mean that funny things don’t happen here, but that fewer connections are available to tell them. This is a story from my hometown:

During the mid 1990’s in the demise of the dot.com boom and the ascension of the housing bubble, we were working on housing developments and subdivisions all over North Alabama. Hartselle, Alabama had become a full-fledged bedroom community by this time and rural land grew houses rather than crops. In the seemingly endless river of plats and development plans, one in Hartselle stood out. The developer approached us with a sketch of a layout he wanted and gave us a free hand to design the neighborhood. Rather than the usual mantra of maximizing the number of lots that we could squeeze into a piece of property, his idea was to make a nice looking layout with common space and areas set aside for amenities, like a clubhouse, swimming pool, boat and RV storage, etc.

This had never been done before in our town, and the cost of dedicating the lost potential lots would mean that the lot price would have to go up beyond the normal range. Actually, after the costs were estimated, they would be the highest priced lots in Hartselle. The developer did not feel that was a problem, and besides, we could always go back and re-plat the lots if it didn’t work, so there wasn’t that much risk. The first phase began and in it we put in a “pocket” playground on some land that was difficult to fold into either of the adjoining lots. This went over well, and the development took off, as the lots sold very quickly. A year later, we began the second phase, which had a large wooded area set aside for a walking trail. It also included a clubhouse, swimming pool, and RV storage area. All of these were built during the construction of the streets and utilities, so the potential buyers would be assured that they were going to be built, not promised. Phase two sold out as fast as the first and houses started to go up.

A homeowner’s association had to be established to maintain these new amenities, and the developer had majority rights until a certain percentage of lots sold. It was in his best interest to keep the lots controlled so they would not get funny looking houses or crazy siding. This is where our story begins.

The homeowners association had a monthly fee that was payable to the entity for maintenance of the common holdings. Anyone who purchased a lot was subject to this fee. There was some vagueness in the covenants as to whether or not builders had to pay the fee, since they were not residents. It was around $40 per month at the time. The developer was the sole association member as few houses had been completed and sold, so he managed the fund and kept the place looking nice. One builder, locally famous for building very large houses, bought several lots and began construction. Some of his houses were for others, called in the business, a “pre-sale” and others were for speculation purposes a “spec” house. Mr. Builder went about his construction and did not bother to pay the association fees because he did not live there, and felt he did not have to pay. The lots were purchased in his name, however. Mr. Developer decided that Mr. Builder did indeed owe him the fees, which were accruing every month. Mr. Builder ignored the many certified letters and bills stapled to his permit display. Mr. Developer had a stubborn streak and would not let this matter go. He felt he was right and would not back down.

One day, Mr. Developer rolled up in his ever-present golf cart (which hadn’t seen a fairway in years) that he used to patrol the neighborhood. He confronted Mr. Builder about the unpaid fees, to which Mr. Builder told him to “get off my land” and don’t come back and bother him anymore. He said he didn’t owe it and he wasn’t going to pay it. Mr. Developer drove off (at a slow rate of speed in a worn-out golf cart), fuming about how to get back at this guy who was defying his authority. A few more weeks and months passed, and nothing was said about the feud, although Mr. Builder had also bought the lot next to Mr. Developer’s new house through a third party. Everyone thought that the feud had been settled, until Mr. Builder got ready to sell the first completed house. At the closing, an event at an attorney’s office where the buyer and seller meet and sign documents for the transfer of ownership, Mr. Builder found that Mr. Developer had filed a lien against the lot. A lien is like a mortgage that has to be paid or settled before the house can be sold. Mr. Builder was furious. It totaled several thousand dollars for fees, interest, and God only knows what else. The buyer was unaware of the “fee feud”, and just wanted to buy the house. Mr. Builder must pay the lien holder, Mr. Developer, in order to clear the title and sell the house, that day, or the buyer’s loan would not go through and the sale would not happen. In a tight spot, losing most of the profit, he had to pay it. After much anger and gnashing of teeth, Mr. Builder successfully sold the house, went home and began looking over the homeowner’s association documents.

The next morning, it was summertime by then, Mr. Builder went to work with his framing crew on another lot in the development, while the new family moved into their new house up the street. Mr. Developer pulled up in his golf cart and told Mr. Builder that if he hadn’t been so stubborn, that the lien wouldn’t have happened, and gloated a little that he was right all along. Mr. Builder didn’t say anything, but kept working.
Mr. Developer drove off to patrol the neighborhood for covenant violations and left Mr. Builder to his work. The day was hot and the framing crew was getting worn out from working in the heat.

At dinnertime, Mr. Builder told everyone to stop working, for lunch. The men came off the scaffolding, put their tools away, and followed Mr. Builder up the street to the community clubhouse. Seeing this parade of labor coming up the street, Mr. Developer puts the golf cart in high gear to come see what Mr. Builder is doing. Mr. Builder opens the clubhouse and has a sack lunch for everyone on tables inside. He also opens the pool gate and tells the men to enjoy a swim, because it was hot. Mr. Developer pulls up and screeches to a halt at the gate and hollers at Mr. Builder “What in the hell are you doing? Get these men out of my clean pool!” Mr. Builder, who happened to b a retired GAO accountant for 30 years said, “I read your covenants last night and found that as a lot owner, I am entitled to use any of the facilities and bring my “guests”. We will be using the pool until we are done, and we’ll be back tomorrow, too.” Mr. Developer was livid. He drove off to call his lawyer, the Mayor, anyone he thought could help, but he knew he had been beat. No one thought of this situation when the covenants were written, and a career government accountant, who was trained to read complex Defense Department contracts got the last laugh on him.

After that afternoon, Mr. Developer and Mr. Builder, two of Hartselle's most stubborn men, both still thinking each was right, buried the hatchet and agreed on a “deferred” payment plan to refund some of the recovered fees, and all was well. The development was completed in a third phase, and all the lots were sold in a build-out record for the Hartselle market. Mr. Builder purchased other lots and built many other houses there, but never forgot the day he got one over on Mr. Developer.