The White Picket Offense: Homeowners' Associations Crack Down

Sept. 10, 2010— -- Carole and Morgan Christian worried about the safety of their kids because drivers constantly exceeded the 25 mph speed limit near their home.

To protect their children, the two picked up a neon "kids are at play" caution sign from a Toys R' Us and placed it in the middle of the street, hoping to deter drivers from clocking in at 40 mph. Before long, the Carlsbad, Calif., couple received a letter from the Ponderosa Country Homeowners Association demanding that the sign not be displayed during the children's outdoor playtime.

Although aware of the lawbreakers in cars, "the [Homeowners Association] said you can't put the signs up because the signs are safety hazard," says Christian.

Welcome to the tightly-regulated world of communities with homeowners' associations. These groups govern and manage residential communities, creating rules about everything from the color of paint on houses to trash pickups, parking on the street and much more. Nationwide, some 60 million people live in these associations.

The Christians learned how a minor issue can come with the threat of a monetary retribution. For the moment they've decided to heed the local police department's advice to place the signs on the curb or on the side of the road.

This couple is hoping that moving the signs will de-escalate the situation with their HOA. But across the country, such minor disputes have snowballed to the point where fines reach into the six figures, houses are foreclosed, homeowners sent to jail for small infractions, even spiraling into violence.

In some cases it's the HOAs that are themselves suffering from a souring real estate market. When houses go into foreclosure the homeowners stop paying their monthly dues to the association. That has caused some financially struggling HOAs to get more aggressive when pursuing rule breakers as they as they attempt to stay afloat.

In North Carolina, Peter Darius accrued fines from his homeowners association for unpaid dues and other violations including a notice for building a white picket fence. A few days shy of his eviction for owing close to $25,000 to the HOA, the 66-year-old with a history of mental illness doused his home with flammable liquids and set it ablaze, ending his life and the battle, according to the Star-News Online.

"We've seen everything, but the last two years have been particularly unique" as homeowners become more frantic and the volume of foreclosures increases across the United States, says Helio De Le Torre, a partner at Siegfried, Rivera, Lerner, De La Torre & Sobel, P.A, a firm that represents homeowners and associations.