Privatopia in Distress: The Impact of the Foreclosure Crisis on Homeowners’ Associations

Abstract

Part I of this Note provides an introduction to HOAs, the foreclosure crisis, and the resulting recession that currently threaten many associations\u27 financial stability. Part I begins with a discussion of the rise of common interest communities in the United States, as well as basic association functions. Following this historical introduction is a discussion of the foreclosure crisis and an overview of the severity of this crisis in Nevada. Part II introduces the problems faced by HOAs across the country because of the foreclosure crisis. These problems fall into two general categories, budget shortfalls and physical deterioration of abandoned properties. In addition to presenting these problems, this section also examines some of the options currently available to HOAs for dealing with these problems. Part III of this Note examines potential solutions to the problems at the federal, state, and local levels. The section begins with a brief introduction to federal programs aimed at stemming foreclosures and helping the economy recover. Next, Part III looks at legislative changes states can make to help HOAs, and finally how government at the local level might make it easier for associations and individuals to protect the value of their own homes