Understanding HOA Guidelines and Policies
When you move into a subdivision controlled by a Homeowners Association (HOA), you will typically sign a document stating that you and anyone else living in your house will follow the rules and regulations of your HOA. In most associations, the rules are listed in the Bylaws or Declaration of Covenants, Conditions and Restrictions. Only a third party can review these documents and tell you how they have been modified. I highly recommend that you review these documents before you buy the house because it might impact your decision. For example, some associations have older consents that require everyone get permission prior to changing the color of their home. In one case the HOA required that everyone consider a certain color scheme with a limited number of options. When I lived in Texas this rule was strictly observed. Depending on where you live, you can guess how well this is enforced in a Maryland association .
Rules and regulations for associations usually include things like:
If you are new to associations, you might be surprised by some of these rules. Many buyers think they own their homes without restrictions. If you live in an HOA, you do not. You must obey the rules and regulations. If you disobey these rules, the HOA can take action against you, which might include taking away your ability to vote at the annual gathering and would definitely lead to an assessment against you through your regular HOA dues. If you fail to pay your dues, your right to reside in your home will be affected.
Although HOA rules can be frustrating at times, they are often necessary to keep up property values. In some instances prohibiting someone from "improving" their property is necessary. In other cases restrictions are annoying, but unavoidable.
Ask yourself this question: Am I willing to obey the rules of my HOA? If you are not, then don’t live in an association.
Resolving Conflicts with Your HOA
Common HOA disputes include issues such as parking violations, architectural controls, vendor / contractor access, noise complaints and maintenance of the common area. Additional issues arise when the association makes or enforces rules or regulations that you may disagree with or perceive as unfair. Disputes arise also from collection efforts;
A. Collection for unpaid assessments;
B. Collection of attorney fees related to any above re:
Parking Violations
Violations which arise likely involving construction that was not authorized by the Association are typically small matters which the Association will likely enforce.
Architectural Controls
Anything involving an alteration to property, landscaping, etc. is generally prohibited unless the owner secures permission from the Board. Additionally, if the owner encloses a patio or balcony, you will want to make sure it conforms with the Declaration, as Act 133 imposes an affirmative duty on the association to remove enclosures that were improperly constructed.
Vendor / Contractor Access
Contractors that provide a service to the Association generally have access to the community unless otherwise informed.
Noise Complaints
This could be a simple dispute or become a larger issue. Generally, the Association will investigate a noise complaint, and if the complaint is found to be legitimate take remedial action.
Maintenance of the Common Area
The association is responsible for maintaining the common area unless you are advised differently.
Collection Efforts
The Association may not be well versed in collection tactics. If you are receiving phone calls from a collections agency you should consult with your attorney to discuss the matter prior to speaking to the collector.
Prior to filing a complaint against your association with the Department of Consumer Affairs, you should consult with your attorney to discuss the merits of your claim. The Department is not a litigation forum, nor is a complaint there an alternative to filing a lawsuit.
Legal Options for Homeowners
Legal Options for Homeowners Facing Issues with an HOA
So, before every neighborhood HOA lawyer gets a call on the first Tuesday of 2024, let me start this section by telling you that in general you should avoid litigation on HOA issues. Moreover, you should not call or email your lawyer or send a letter sending things over to us if you are calling a lawyer:
- You want to send a demand;
- You want to resist sending a demand;
- You want to sue and file a lawsuit;
- You already filed a lawsuit; or
- You already sued me to force me to file a lawsuit.
Litigation is the worst. This section will cover the options generally available to HOA members to file some sort of legal action. But, you have been warned that you may find the prosecution of an HOA lawsuit to be an expensive endeavor.
Mediation – In many instances, mediation has proven to be a viable and sensible option to deal with HOA issues. Depending on the governing documents of a neighborhood association, members can be forced to file a lawsuit and submit to mandatory arbitration instead. But, if it is an option, mediation is something we strongly encourage our clients to consider as it is less expensive and much faster than litigation. For example, if a homeowner is attempting to seek redress related to an HOA fine, a court action can take several months if not years. Whereas, a mediation can be mediated and possibly resolved within a few week’s time.
Arbitration – We have discussed several times in our blog that HOAs will often want to force individuals into arbitration rather than allow them to sue in court. Properly worded arbitration provisions in neighborhood covenants and/or the articles of incorporation and bylaws of an HOA will force claims against the homeowners’ association to be arbitrated as opposed to being brought in court. An arbitrator is a third-party that the parties to the dispute agree to appoint and listen to arguments to resolve the controversy. So, if you are forced into arbitration, know that the process is very similar to a court, but off the record and no real due process is guaranteed.
Lawsuits – If you are reading this article, you already know what a lawsuit is. A suit is a desirably last resort to iron out any disputes you may be having with your neighborhood association. But, suits are long, take a lot of time, cost a lot of money (even in the worst of disputes) to prosecute and can drag on for the next five years or more. It can be depressing and expensive and unless you are comfortable with how much rent money you will be paying an attorney, you should certainly consider all other options to resolve disputes with your HOA before filing a lawsuit.
Member Rights and Duties in an HOA
The rights and responsibilities of HOA members are set forth in the association’s governing documents, which should be read carefully. The members also have the benefit of state statutes and sometimes ordinances that may apply to associations. Homeowners have a right to participate in the governance of their association, as well as a right to participate in maintaining the common property.
Most states or localities have laws that entitle owners to access the books and records and to speak at meetings . The circumstances of this entitlement, such as the timeframe for providing access to books and records, the charge for copies and other details will be in the governing documents and sometimes will be regulated by state statutes.
The process and requirements for membership and board meetings, including an owner’s right to be on the board, be heard at meetings and make motions, will be set forth in your documents and dictated by state law. Homeowners may also have a right to ask for the removal of board members or to propose a new course of action for the association if there is sufficient support (usually by way of a petition signed by a certain percentage of owners) for the proposal.
HOA Guidelines Enforcement
Compliance with your association’s regulations is critical to protecting your home’s value and enjoyment of living in an association. Your community’s governing documents, including the declaration, bylaws, rules, regulations, and guidelines, contain covenants that are often legally enforceable by your association. As a community association manager, HOA attorney, or other common interest community professional, I often need to advise clients regarding the substantive nature of a specific regulation. In these situations, it is important to understand that an argument can be made either for or against the enforcement of a regulation. In that regard, courts have decided that restrictions should be construed in favor of free and unrestricted use of property. However, there is also substantial authority for the proposition that, at least in some circumstances, an association is permitted to restrain excessive or inappropriate use to protect the common good of all residents. Resolution of these competing interests is often very fact specific and case dependent, so it is always wise to get your association’s primary legal advisor involved if there is any doubt of how a governing regulation will be interpreted and enforced. Noncompliance with an association’s regulations can result in significant hardships to other residents. While associations are often left with no choice but to file a lawsuit to enforce a regulation, it is often recommended that the board first send a letter to the offending owner (or indicate in writing to any other responsible party) advising that the regulation has been violated. Attached to the letter should be a copy of the regulation that was violated (to avoid any question that the offending party has been given proper notice of the nature of the violation). In many cases, conscientious owners who receive a violation letter immediately correct the violation and will deliver a written apology to the board or manager. When violations are not corrected, the association can proceed to issue appropriate fines. It may even be in the association’s best interests to enter into consent agreements with violators that require immediate corrections and ongoing compliance. Obviously, if the party continues to violate the regulations after notice and imposition of fines, the association’s only remedy may be to pursue an action in court. If so, the action should be brought in the name of the association itself, though an individual manager or HOA attorney may sign all notices and pleadings on behalf of the association. Your association should not, however, attempt to collect or accept fines until after association counsel has been consulted.
Selecting Appropriate Legal Assistance for HOA Matters
When it comes to legal matters pertaining to your HOA, knowing when to get help and how to find the right lawyer can save you time and possibly thousands of dollars in fines, fees and litigation costs.
Ideally, you’ll consult a lawyer before making any decisions that could directly impact your rights or your ability to manage your property in accordance with the governing documents of your association. Unfortunately, many homeowners wait until they have already made a serious mistake before seeking legal advice. That’s not to say the advice doesn’t help after the fact, but it’s always better to prevent the issue in the first place. Consult an attorney if you have any confusion about the governing documents and if you have questions about your rights and your obligations under those documents. Commonly overlooked provisions that you may want to ask an attorney about include: If your association is required to hold meetings and elections in accordance with the laws and governing documents, be sure to ask your attorney about those requirements, too . Following the proper procedures is crucial and failing to do so can greatly affect the outcome of issues like election results and board actions.
If you served as a director and failed to follow the governing documents and the laws, you may have opened yourself to a claim for personal liability. An attorney can provide you with an analysis of your rights in this regard. Furthermore, if you are seeking compensation for a breach of fiduciary duty, such as improper actions by a director, you can ask an attorney to review the facts of the situation to determine whether you have a claim that can be pursued.
It’s also important to employ an attorney who is well versed in HOA governing documents and who knows the laws that impact associations. Your general real estate attorney may be very knowledgeable in one area, but when it comes to HOAs, he or she may not be able to provide the depth of insight required to properly guide you through the process.