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Hidden within outdated governance practices — paper ballots, unverifiable email votes and opaque proxy chains— lies a financial time bomb that can decimate property values and trap homebuyers in toxic assets, says Jonathan Gropper, founder of TrueHOA.

His property governance technology company focuses on reducing costly HOA disputes through verifiable voting and election systems.

TrueHOA estimates Americans spend $5 billion to $10 billion annually on HOA-related litigation caused by outdated methods.

Its flagship tool — Verified Governance — uses cryptographic verification, timestamping and independent auditing to create transparent, defensible HOA elections while preserving ballot privacy, Gropper said.

He sat down with HousingWire to explain how unverifiable governance erodes housing affordability, why HOA fees silently eat into buying power and what real estate agents should watch for during due diligence.

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 [2021 Surfside condominium] collapse, all of a sudden, HOAs found that they are underfunded, and they go and do a special assessment for $100,000.

Not many people have $100,000 laying around to just pay their HOA, so people are forced to move or sell at a loss. These are a lot of times elderly people, people that are retired or on a set income, and they’re basically forced out of their home because of HOA mismanagement that’s been going on for years.

Delozier: What happens to a property’s resale value when an HOA has a history of contested elections or unresolved disputes?

Gropper: You end up with toxic properties. [Real estate professionals] want to have recurring business, so they’re not going to direct a buyer to a property that they know is going to be contentious and [be] a huge albatross around [their] neck. I’ve seen properties that have lost up to 50% in value — if you compare, in the same neighborhood, in the same city, a properly managed building to an improperly managed building.

When you have a situation that just escalates, everybody rushes for the door. Now it’s a race to the bottom. So everybody discounts their properties. Everybody just bleeds value trying to get out, but not that many people are going to go in there and say, ‘I want to take on that liability.’

Delozier: What specific red flags should agents and buyers look for in HOA documents during due diligence?

Gropper: The simplest questions are, Do they verify their elections? Do they have verified governance? Are they independently verified, where can you actually check records that are independently auditable?

Right now, the crazy thing is, most HOAs are operating like this, and they operate like it’s 1960. You have blockchain technology. So, for me, I took technology that is available for financial transactions that banks use and I deployed it to election and governance.

Delozier: Do you envision a future where some sort of verified governance certification becomes standard?

Gropper: We’ve made our Verified Governance Specialist as a free certificate, because we want to establish a healthy baseline in the industry. If you’re an industry professional — a homeowner, a board member, a property manager, a real estate agent — you can go in there, see our best practices and apply them in your community.

We’re establishing that standard, for verified governance. The watershed moment here is when you know that there’s something like TrueHOA. If you’re a homeowners association, what’s your excuse for not having that standard? What’s your excuse for not being transparent and having auditable elections that not only save money for the HOA and save your time, but also reduce your insurance and reduce your liability?