What real estate agents need to know about HOA governance risk

For many real estate agents and homeowners, the true cost of a homeowners association (HOA) is more than just the monthly check.

Hidden within outdated governance practices — paper ballots, unverifiable email votes and opaque proxy chains— lies a financial time bomb that can decimate property values and trap Editor’s note: This interview has been edited for length and clarity.

Jonathan Delozier: You’ve seen HOA function from the inside as a homeowner and board member. What is the core problem that TrueHOA solves?

Jonathan Gropper: The core issue is being able to prove an election outcome and prove decisions, not just trust that they were made right. And as simple as that sounds, up until TrueHOA, that was not on the market, not even close.

You still had HOAs doing paper votes. They had paper proxies, quorum chasing and quorum harvesting. You could have a situation where the property manager just decides not to count people’s votes. You had situations where votes will be counted in the back room, and whatever the outcome [was in favor] for the incumbents, obviously [that] would happen, and it just kept on repeating.

Delozier: For real estate agents, why should they care about how an HOA runs its elections? How does this impact their clients’ wallets?

Gropper: This is the biggest pain point that is fixable, and it has the highest impact on property values. I mean, just imagine, as a [real estate agent], you’re taking your clients, and you’re saying, ‘Do you want to see the HOA that has verified governance where there’s no Mickey Mouse games, or do you want to go to the HOA where you just trust that they do things the right way?’

If you look at major cities — New York, Philadelphia, San Francisco — a lot of buildings are at the point where the mismanagement was so gross that you pay more in HOA dues than you do in taxes. You pay more in HOA dues than you do your mortgage.

Delozier: Can you break down how monthly HOA fees add up to erode affordability?

Gropper: People often think of a, let’s say, $200 monthly increase as something that’s annoying. In reality, that $200 a month equals $30,000 or $40,000 in either lost buying power or a reduction in property value that doesn’t come back. If you look at places like Florida, after they had that unfortunate [