Is Your Association Up to Par?
By DeBat Media News Service
May 1, 2014

CHICAGO—Home buyers planning to buy a condominium or residence controlled by a homeowner association (HOA) can now evaluate their purchase in advance during the home-shopping process by utilizing a new scoring model—the “Private Association Rating”—or PARScore.

“PARScore is a revolutionary new fact-based, data-driven analytics process that evaluates the quality and credit worthiness of more than an estimated 324,000 homeowner associations across the United States,” said Sara E. Benson, CEO of Association Evaluation, LLC, a Chicago-based real estate data-analysis firm.

Today, one in five Americans—an estimated 63.4 million residents—live under the rule of a homeowners association (HOA), which includes condominiums, cooperative apartments and many multifamily and single-family residences.

Nationwide, a total of 25.9 million homes are governed by homeowner associations, and more than 2 million people serve on association boards across the country, according to the Community Associations Institute (CAI).

An estimated 90-percent of these associations are self-governed. According to Evan McKenzie, author of “Beyond Privatopia: Rethinking Residential Private Government,” one point cannot be overemphasized: “The entire institution of common interest housing rests on the volunteer directors, yet they are unpaid, untrained, often unqualified, and almost entirely unsupported by the governments whose work they often are doing.”

Often these directors struggle with balancing their own check books, and are overwhelmed with managing their share of an industry with budgets estimated at $90 billion a year.

A September 2011 survey conducted by the CAI found that more than half of the nation’s homeowner associations now face “serious financial problems.” In 2013, 72 percent of association-governed communities were underfunded, according to Association Reserves, a California-based company that helps associations with budget and operational issues.

“A problem is emerging,” noted McKenzie. “Significant numbers of community interest housing developments are failing to carry out their basic responsibilities or becoming insolvent.”

Through a proprietary algorithm, PARScore provides a standardized rating between 400 and 900. Financially healthy and well-run associations will receive higher ratings while risky associations plagued with low bank balances, non-paying owners, special assessments and lawsuits will receive lower ratings, Benson explained.

“PARScore turns guesswork into facts and empowers purchasers, lenders and insurance companies in their decision-making process,” Benson said. “PARScore reduces risk and liability to all involved parties.”

• Data-Driven Analysis. Through the Private Association Rating (PARScore), Association Evaluation transforms the home-buying experience by bringing comprehensive data-driven, real-time analysis to consumers. Transparency, clarity, accountability and credit worthiness for community associations nationwide will be provided to all homeowners, according to the LLC’s mission statement.

“Today, potential home buyers have access to digital tools that de-clutter murky data in favor of transparent information that actually empowers the consumer,” Benson said.

“We encourage all homeowner and condo associations to participate in the Association Evaluation model to raise their financial accountability and governance transparency ratings,” Benson said.

“Association Evaluation breaks the cycle of purchasing, lending and insuring in risky homeowner and condominium associations by identifying the best-run associations,” noted Chicago real estate attorney Jay Zabel.

Benson noted that there is currently no standardized model to rate the health, safety and security of condominium or homeowner associations.

• Patent Abstract. PARScore represents a statistical analysis of the risk, quality and performance of a private association, to represent the credit worthiness, governance and health of each private condominium or homeowner association.

“Users of the system can utilize the resulting rating number in assisting with lending, insuring, purchasing or in making other investment decisions,” said Chicago intellectual property attorney Howard B. Rockman, who noted that a patent currently is pending with the U.S. Patent and Trademark Office for the method and system for obtaining a numerical expression based on the PARScore.

Depending on the size of the association, initial pricing—including a site visit, complete Viability Study and PARScore rating is between $300 and $950 per transactional report. Reduced bulk pricing is also available.

PARScore is a registered trademark, patent pending and fully insured. For more information on the PARScore, call Association Evaluation, LLC, at 844-PAR-SCORE (844-727-7267), or visit:

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Association Evaluation® and The PARScoreTM and their related logos are trademarks or registered trademarks of Association Evaluation LLC in the United States and in jurisdictions throughout the world. The PARRegistry, PARReport report and PARScoreTM rating system are patent pending, fully insured and strictly enforced.