7 Key Factors To Avoid HOA Problems

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According to the Community Association Institute, approximately 70 million Americans own properties in (1) Homeowners Associations, (2) Condominium Associations, or (3) Cooperative Housing (the "HOA" or "Association") in the United States. Living in an HOA governed community comes with certain obligations that all owners must adhere to in order to avoid compliance problems. Today, we're going to review the 7 key factors that will help you understand your basic rights and responsibilities as a dues paying member, and the steps you can take to avoid unnecessary homeowners association problems. But first, allow me to brief you on the association's purpose, authority, and obligations to give you a clear path to understanding how these private communities function.    

The Association's Purpose

One of the benefits of living in a private community is the amenities and common areas it offers to its members, such as, pools, walking paths or trails that connect to beautiful parks, gyms, tennis courts, and lakes. These amenities serve to enhance and protect the lifestyle of the community members and preserve property values. Thus, it is the Association's primary purpose to maintain the amenities and common elements providing its members with a secure and safe environment to live in.  

Understanding How Associations Function

The Association functions like a government with officers who form policies in an attempt to steer people in the right direction. Similarly, the Association is administered by an elected Board of Directors (the "Board") who has a "fiduciary duty" to the Association, and act as the steering mechanism to its members. The Association's duty to govern has to be accomplished in accordance with applicable federal and state laws, and the association's "Governing Documents" as listed below:

  • Plats of Survey and Easement Agreements

  • Declaration of Covenants, Conditions & Restrictions (CC&Rs)

  • Bylaws

  • Articles of Incorporation

  • Rules and Regulations

  • Policies

  • Architectural Guidelines

Contractual Obligations

The Governing Documents provide a structure to the Association and its members, dictating the guidelines as to how the Association must be governed. In other words, both the Association and its members have a contractual obligation to abide by the agreed terms and conditions of the Governing Documents.  For example, the Board's core obligations are to:

  • Govern within the scope of authority,

  • Act in good faith, and in the best interest of its members,

  • Be reasonable and treat all owners equally and fairly, and

  • Maintain the common areas of the community.

Likewise, the owner's obligations are to:

  • Abide by the Governing Documents,

  • Pay maintenance fees, and

  • Maintain the property in good condition.

These basic obligations are not all-inclusive. In order to understand your specific responsibilities, you must review your Governing Documents and applicable laws. Nevertheless, the above-referenced outline gives you an idea of the importance of the Board and its members' interdependence in the community. Without each other's support, the Association system would simply fail, resulting in the loss of property values in the community.   

Homeowners' Basic Rights

Although the Association has the duty to govern the community, federal, and state laws limit the scope of authority on what the Association can, and cannot do. Let's review a few basic rights owners have under the laws, and the Governing Documents. Owners have the right to:

  • Access their property.

  • Enforce the Governing Documents.

  • A competent, transparent, responsive, accountable Board of Directors.

  • Participate in governing the community association by attending meetings, volunteering, getting involved.

  • Community Association Disclosures - Owners are entitled to annual disclosures such as the association's financials, budgets, notices of meetings, etc.

  • Appeal decisions - For example, the Association must provide the owner with "actual" notice of an alleged violation and the opportunity to be heard.

  • Inspection of Association Records - Annual budgets, vendor contracts, reserves summary, account balances, meeting agendas and minutes, policies, check registers, financial statements, tax returns, membership lists, and the Governing Documents.

  • Fair treatment.

  • Display the U.S. Flag

  • Modify the property for access for persons with disabilities - As previously discussed, Associations must review and approve requests if it complies with the Fair Housing Laws. Homeowners can file a discrimination complaint against an association at no cost, if it fails to comply with the Fair Housing Act or Americans with Disabilities Act.

Likewise, the Association has the right to:

  • Adopt reasonable Rules, in compliance with applicable laws

  • Enforce the Governing Documents

  • Impose monetary penalties

  • Collect unpaid fees

  • File a lawsuit against a defaulting owner

These basic rights are not all-inclusive. As the owner of a property governed by an Association, you have a duty to read and understand your Governing Documents and applicable laws to gain an understanding of the things you can, and cannot do in your community. As mentioned above, it takes effort from both sides to be able to create a strong healthy relationship that will enable a positive community living experience. What owners can do to facilitate this outcome is (1) Keep an open communications channel with the Association, (2) understand the Association's authority, and (3) abide by the contractual responsibilities. 

7 Key Factors To Avoid HOA Problems 

Finally, let's go over the key factors that will help you benefit from your community living:

#1 - Read and understand your Governing Documents. These documents should have been provided to you when you purchased the property. If not, you can obtain copies by taking the following steps:

  • As your real estate agent,

  • Call your association and ask for copies,

  • Retrieve unofficial copies by visiting your county recorder's office or webisite.

#2 - Understand you own an HOA property. You gave up certain freedoms when you acquired ownership of your HOA property. As a result, you automatically became a member of the Association and agreed to abide by the terms and conditions of the association's documents. 

#3 - Maintain your property in good condition and repair. The most common violations in the U.S., are:

  • Failure to maintain landscaping (weeds, trim shrubs, etc.)

  • Garbage & Recycle bins (do not leave your trash cans visible to neighboring properties on non-collection days.)

  • Oil stains

  • Items left out - (basketball hoops, water hose, etc.)

  • On-street parking - most associations prohibit on-street parking. Does yours?

  • RV/Boat parking

#4 - Pay your fees on time. All associations have their own payment schedules. Find out the payment schedule for your association, and pay your fees on time. Most importantly, please be aware that it is against the law to withhold payment of your maintenance fees due to the association's alleged failure to fulfill its obligations, or if you don't like the decisions the Board makes.

Your obligation to pay the fees is contractual, and cannot be waived. If your account is in default, the Association may have the authority to file a personal or foreclosure lawsuit to collect the unpaid fees. If this happens, you will be liable for the collection fees, attorney's fees, court fees, and costs, incurred by the Association for having to take action to collect the delinquency.  For this reason, it is important to seek an amicable solution with the Association and avoid conflict. 

#5 - Know when to seek legal help. With the understanding that not all associations are governed equally, if you believe you are dealing with an abusive Board that is not well informed of the laws, is acting beyond their scope of authority, or is violating your rights, seek professional help. Let the attorneys handle these matters. 

#6 - Choose Law Not War. Don't fight your association, if they are lawfully enforcing the Governing Documents. Understand your options, don't react on emotion, and plan your responses wisely. For example, if you did not pay your maintenance fee on time and the association imposes a late charge to your account, you are contractually obligated to pay that charge. In most cases, associations may consider a waiver of the charge if you have a good payment history. Furthermore, if you are facing financial hardship, and are not able to make your payments, communicate with your association in an effort to schedule a payment plan, or resolve the delinquency amicably.  

#7 - Get involved and make a difference in your community.

In conclusion, it is imperative that all owners, including the volunteering Board, understand their role in the community to avoid unnecessary conflicts. The Board and its members must learn to live in harmony, work with one another, and encourage the development and protection of the community as a whole. We all share a common interest, which is to live in a peaceful, safe, vibrant community that preserves property values. Let's make an effort to make a difference in our communities by getting involved.