Robert,

It’s far worse than that.

HOAs, which have the power of small governments, but are shielded as corporations. As corporations, HOAs are a defective product.

A corporation is an entity created to protect an investor’s personal assets. For example, if you invest in Corporation X, and X is sued, fined by the government, or goes bankrupt, your liability is limited to your personal investment. The creditors that X owes money to can’t go after your home, your car, your bank account, etc.

But an HOA corporation’s assets are the ability to issue to collect dues, collect fines, collect fees, place liens on, and foreclose on the homes of its “members,” whose “investment” in the corporation is their largest, most valuable personal asset they will ever own.

If you live in a Common Interest Community governed by an HOA corporation, your home will be collateral to whatever debts and liabilities the HOA corporation creates — forever; even after you have worked to pay off the mortgage. If you belong to a homeowners association, you can never truly own your own home.

It is suspected that HOA corporations — which are often run by the lawyers, not the “elected” board members — target homes that are paid off. The power to foreclose for trivial amounts and reasons, often without any judicial oversight, leads to horrible abuses of individual homeowners. These stories are strangely absent from the “Legal Extortion” category, or any other section, of Overlawyered.

For example, you’d think the story Michael Clauer would have been reported here. But it was not. Long story short: while Captain Clauer was deployed to Iraq, his $300,000 home — which was paid for free-and-clear — was foreclosed upon by his HOA to pay $3,500 in HOA attorney’s fees incurred over an $800 dispute. Who bought the house for $3,500? The HOA sold it for $135,000 to the attorney’s business partner. You can bet there were a lot of large unmarked envelopes changing hands in that deal.

The only major media outlets to report on the theft of Captain Clauer’s home by the HOA’s lawyers were the left-wing Mother Jones and the liberal NPR “All Things Considered“. Although this story broke just before Memorial Day, the right-of-center punditocracy — including Overlawyered — was curiously silent. Support the troops, unless such support conflicts with the financial interest of sleazy corporate-communist lawyers.

After having been involved with HOA issues for over a year now, I have become convinced that the whole “tort reform” movement, led by sites such as this, is about making it harder for individuals to sue corporations, but not the other way around.

VMS is right. In the HOA model of corporate government, board members tend to be indemnified — either you can’t sue them, or they have insurance which the homeowners are paying for.

And the homeowners are paying for the HOA’s/board’s attorneys, in addition to their own.

HOAs are like the facehugger from the movie Alien: any action against the parasite threatens the well-being of the host.

Yet libertarians and conservatives love HOAs more than they do individual private property rights for homeowners. A web site called “Overlawyered” should have no shortage of HOA-related horror stories. Yet Mr. Olson has curiously decided give one of the worst collectives of parasitic tort lawyers currently in existence a pass.

It’s really sad that conservatism and libertarianism has descended from the noble ideas of individual liberty and freedom into a parody of corporatism (which is what HOAs are), to lead us down The Privatized Toll Road To Serfdom.

That’s the equivalent of suing yourself.

I suggest that the next set of parties that want to spend $100k (well, more, presumably plaintiff had council as well) litigating something of questionable value instead donate it to CBS to put towards a competent newsroom.