by Paul Beach

Created on: March 18, 2007   Last Updated: May 21, 2007

An open letter to the Neighborhood Association

Dear Sirs

The sole purpose of the existence of neighborhood restrictive covenants is to protect property values within the neighborhood; the value in this is obvious.

However, I would suggest to you that the concept of neighborhood restrictive covenants, like so many other forms of government, is fundamentally flawed so that it actually has the opposite effect of preserving property values.

The flaw is this the Neighborhood Association would attempt to put itself above the individuals that make up the neighborhood. The 'neighborhood ...' would expect me to forfeit my private property in small bits in the form of a tax that it calls neighborhood association dues'. And it would expect me to give up my ability to do whatever I want to do with my private property. Quite frankly, it's a wonder that Uncle Sam doesn't come down on the neighborhood ass much harder for trying to wease on his gig'.

Association dues can have a direct effect on property values. The higher the dues, the smaller the size of the market which can afford to live in the neighborhood. If I'm selling a house, I want my market limited only by the actual price of the house, not by the perpetual expense of living in it.

But the biggest flaw with restrictive covenants isn't even really fundamental, to wit: the neighborhood ... does not have the executive power, (thankfully), to do what it is set up to do. How can you enforce compliance with restrictive covenants? In the event of a violation, your only option, if you don't simply let it go, is to levy a fine that becomes a lien attached to the property in question. The average person in this situation will probably pay the fee and correct the violation, and that is exactly the compliant behavior you're looking for in order to feel that you're doing what needs to be done to preserve property values.

Let's examine some simple cause and effect in a hypothetical scenario, shall we? You find me in violation and levy a fine. I decide not to pay it. No problem, you say; you'll simply wait until such time as I wish to sell my property. In order to convey clear title, the lien would have to be satisfied. But what if I never sell the house? What if I convey the house lien and all to my heirs, or someone else who feels as I do about neighborhood associations and is willing to take the property subject to the lien? How long can you go without receiving the money, and more importantly, how long can the neighborhood go without having the violation corrected before property values are seriously affected?

And what if I should decide to escalate the hostility, as it were? All I would have to do to make property values in the neighborhood completely tank is buy a couple more houses and let them all go to hell. I could rent them out to recipients of government assistance. I have every legal right to do this, and the only thing the neighborhood ... could do is put liens on my property.

We all want to keep property values as high as possible. But, as you can see, the neighborhood ... is completely ineffectual at preserving property values. It hardly has the potency to preserve its own tenuous existence. So do what you must to feel satisfied and happy, but keep in mind that the prudent move to truly preserve your property values is to keep your ... out of my ... .

Be excellent to each other.

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