A new book outlines serious problems with community associations, which have suffered major financial problems during the recession.

 Owners who aren’t making their mortgage payments often don’t make their HOA and condo dues payments, either. At least in some states, lenders don’t have to make up all the missed payments when they take over the properties. That has created significant financial problems for some associations.

• The runaway power of homeowners associations

“Beyond Privatopia: Rethinking Residential Private Government,” the second book about associations by Evan McKenzie, a political science professor at the University of Illinois at Chicago, argues that the entities have serious problems. His previous book was “Privatopia: Homeowner Associations and the Rise of Residential Private Government.”

 ”Residents often contend with intrusions an elected government would not be able to make, like a ban on pets or yard decorations,” McKenzie said in a news release. “If things go wrong, the contracts residents must sign to purchase within the community give them little legal recourse.” 

 Many of us have heard a story of homeowners association outrage, such as this one about a soldier who lost his home over $800 in unpaid dues while he was deployed in Iraq.

But if you want to live in a new subdivision or a condominium, being part of an association is part of the deal. According to a story by Brian O’Connell at MainStreet.com, about 20% of American homeowners live in an association. Municipalities like associations because they don’t have to provide such amenities as streets and swimming pools, which are maintained by the association.

• Delinquent condo owners face public shaming

In an interview with Mary Umberger for The Chicago Tribune, McKenzie says that homeowners associations aren’t all bad, but that some are in serious trouble. He said:

It’s presumed that monthly assessments will cover operating expenses, which can include things like trash collection, pool maintenance, even resurfacing the streets. But studies that have been done show they probably don’t have enough money in reserve. At least a third of them … don’t have half of what they should have. After the housing collapse and the foreclosures, it’s probably more like half don’t have enough. Many of them are having to go to the bank and get a loan, but if you have a high delinquency rate, you can’t get a loan.

He advises anyone considering buying a home in an association to check out the financials thoroughly before buying. You can read the whole question-and-answer piece here.

• How to fight your homeowners association

What’s your view of living in a home or condo with an association? Do you find that associations protect property values or do they violate people’s rights? If you live in an association, how is it coping with the foreclosure crisis and the financial downturn?