In Eagle Mountain, the ‘ugly underbelly’ of homeowners associations
There have been many victims of the global economic meltdown. Families have lost their homes and jobs. But what happens to those who don’t lose their homes, those who are left behindfi
A ghost town in Eagle Mountain
Fabiola Muller moved to Eagle Mountain’s Silver Lake Village in January. Since then, she said, things have gotten ugly.
And the plague of safety and legal problems is only likely to spread around Utah Valley as the global economy tanks, local officials said.
The vast majority of homes in Silver Lake Village have either been abandoned mid-construction, or have been foreclosed on and then abandoned. Front doors that were never installed with knobs swing open day and night. Strangers doing drugs and having sex in abandoned houses have to be chased out, and raccoons have infested many. There is a sinkhole in one of the streets. Holes dug for basements are collapsing, posing a danger to the children who play there. The foundations of some of the homes are cracking and sinking. A pile of abandoned furniture sits in front of one home. There may be squatters living in another. Several of the abandoned homes have been vandalized, the perpetrators removing granite countertops, appliances, even pulling up the wood floors. Someone used a car to smash in the garage door of one home.
“I want to see some light at the end of the tunnel, but it is overwhelming,” said Muller with tears in her eyes. “I have to say there is anger in my heart. I feel like I was lied to. I was deceived by people.”
The ugly underbelly of HOAs
But the deterioration of this neighborhood, as bad as it is, is not what really worries the handful of owners who remain here. What keeps them up at night can be summarized in one word: snow.
The gritty reality of global recession has thudded into the laps of a dozen homeowners in Eagle Mountain, exposing what city manager John Hendrickson called “the ugly underbelly” of homeowners associations.
Except for a handful of owners, Silver Lake Village has been reduced to a ghost town.
The real problem here is, who is in chargefi The short answer is no one, not a soul. Who owns this privately owned communityfi Who takes care of propertyfi Who will plow the roadsfi
Snow will come. That knowledge recently prompted resident Erin Carbajal to go to the City Council.
Because Silver Lake Village is privately owned, the city does not plow the streets.
“How will we get to work if no one plows the roadsfi” said Carbajal.
Sundance Homes, which apparently started the community, “is a nonfunctioning company,” said Bob Jones, who purchased the development company in 2006. “It is not doing business. There are no employees. There is absolutely no opportunity for it to make income.”
Jones said he owns about 25 homes in the village, 20 of which are set to be repossessed next week by the bank that financed them.
Though the residents here said they did not understand it when they bought their homes, they don’t even own their lawns.
“We don’t even own our window wells,” said several of them, repeatedly.
The homeowners association, which appears to be defunct, owns all the roads, in addition to the lawns. Because the roads are privately owned, and not built to the standards of public streets, the city cannot plow them, said Hendrickson, who toured Silver Lake Village on Friday, his day off, at the request of the Daily Herald. Councilman David Lifferth joined him, also at the Daily Herald’s request.
When residents demanded to know how to make their roads public, Hendrickson said that could be possible if the HOA paid to widen them to meet city standards, though residents agreed this was a physical and financial impossibility.
Private ownership “ties our hands,” Hendrickson said of the city’s ability to help residents.
Everyone who spoke to homeowners said they would need to take over the HOA, begin collecting whatever dues they could, retain an attorney, and begin working to solve the lengthy list of problems they face.
“You have a contract with each other, whether you realize it or not,” Hendrickson said.
How to take control of a defunct HOAfi
However complicated and expensive it may be to wade into that legal morass, it got more complicated on Friday afternoon when city officials, after touring the area, helped residents find Bob Jones. Jones told the Daily Herald that residents have not paid their dues to the HOA in months, though residents told the Herald they wanted to pay the dues but could not, once a working phone number and address for Sundance Homes could not be found.
Jones said a collection agency has been hired to collect thousands of dollars of unpaid dues to the village HOA. The situation is further complicated because there is a second master HOA that is also collecting dues from the residents. Residents Juan and Jessica Brache recently received a collection agency letter from the master HOA demanding $1,143 in dues and attorney fees for 2008. All the residents interviewed by the Herald said they had never been told, upon purchasing their homes, that there would be two HOAs charging fees.
Residents also told the Herald on Friday that a representative of Jones told them Sundance Homes would not allow remaining owners here to take over the HOA. Jones told the Herald he would be glad to give residents control, but only once all dues in arrears are paid.
So who is in charge of the HOAfi
“I honestly don’t know the answer to that,” Jones said. He later implied that roads would be plowed if residents paid their dues, and he said lawns were mowed all summer, though some residents dispute that. Some residents, including Muller, said they had paid Sundance Homes for grass and landscaping, a retaining wall and a fence and none of that has been installed.
Why are privately owned communities allowedfi
Standing in a circle around a sinkhole in one of the streets on Friday, city officials put the responsibility for fixing the mess onto residents’ shoulders, acknowledging that residents were in an unfair position.
There is much the city cannot do because the subdivision is privately owned, Hendrickson said.
Officials debated whether it would even be legal for the city to put a barricade around the sinkhole on a street the city does not own.
Residents demanded to know why the city allowed privately owned subdivisions in the first place.
“How can the city allow a road to be built that is not up to city codefi” Muller asked. “No one planned on the builder being gonefi”
Hendrickson said privately owned communities have sprouted up across the state, building undersized roads as a way of keeping the cost of houses down, allowing owners of homes to pay lower property taxes.
The city pledged to help residents attempt to find out who owns each of the 92 homes and lots in the village, in order to find out if there is a majority owner, who would automatically be in charge of the HOA. The city could then make some demands of that owner, Hendrickson said.
If there is no clear majority owner, homeowners should hire attorneys and take over the HOA and use the authority of the HOA to collect dues, plow snow, file liens against abandoned homes for unpaid dues, and attempt to address the safety concerns. In addition, there is at least a few thousand dollars in bond money that the city required from builders that could possibly be used to fix the sinkhole, for starters.
The city also pledged to send building officials, who toured the area with Hendrickson, back to take a detailed inventory of abandoned homes and other safety issues.
“You don’t expect to live like this,” said Muller.
“To me it is overwhelming,” said Carbajal. “We are common people. We didn’t come here to be in charge.”
Several officials said Silver Lake Village isn’t the only area of Eagle Mountain that is finding itself in this position.
“This is why I don’t like HOAs,” Hendrickson said, noting that once an HOA collapses, “homeowners are surprised at the costs” they must assume when they are left behind.
