In order to receive approval to build a new subdivision, most community association (CA) developers must agree to extend the utilities to the site and require future residents to privately arrange for services traditionally provided by a city. This cozy agreement between developers and municipalities disregards any notion of fairness for future CA homeowners, while bringing tax revenue to municipal governments without them having to provide any services for it.

CAs with rights to assess their members for the maintenance, management or upkeep of property operated for the common benefit of their members have been bearing an ever-increasing burden of expenses and obligations historically paid for and performed by local governments. For example, a large percentage of CAs provide their own snow removal, private garbage collection, street cleaning and street lighting.

It seems reasonable that property taxes imposed on members of CAs should be imposed on the same terms and conditions as property taxes on other non-CA homeowners. However, CA residents are often double-taxed for basic municipal services. It is odd that municipalities have no problem charging the same taxes to CA members even though tax-subsidized services like road repair, sewage disposal, public transportation, tree maintenance and security patrols are not included.

Many cities try to justify this discrimination policy by arguing that their employees are subject to liability problems when they venture onto community association property. However, a simple "Release of Liability" agreement seems to have solved this issue for cities that do provide the services for CAs.

Many believe that it is important for municipalities to stay consistent with the Equal Protection clause of the U.S. Constitution when it comes to providing services equally to all taxpayers, including those in community associations.

In the spirit of fairness and equity, lawmakers across the country have an obligation to correct this inequity and free CA members from a deal they had no part in. Solutions include requiring public service providers to perform the services or compensate CA members for the cost of services not provided.

Where this issue moves in the future depends on many economic, social and political factors. But, until all homeowners are treated fairly by municipal governments, the call for elimination of double taxation is certain not to go away.

My thanks to Andrew Krakowski for his research. For the complete article see www.Regenesis.net/doubletaxation.htm.

Published: November 24, 2004

Use of this article without permission is a violation of federal copyright laws.

Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues. Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at .