HOA Violations: The Homeowner's Right to a Fair HOA Due Process
Under the law, all condominium, cooperative, and homeowner associations ("Association") are subject to basic rules of due process. Although the Association has a fiduciary duty to enact and enforce rules to promote health, happiness, and peace of mind of owners, the Association through its body of authority, must act in good faith and offer homeowners fair enforcement procedures. In addition, the Association's rules and decision making must be reasonable and not discriminatory.
Moreover, it is important to recognize that the Association's power and authority stems from its governing documents (e.g., Declaration of Covenants, Conditions and Restrictions, Articles of Incorporation, Bylaws, Policies, Rules, and Regulations, and Architectural Guidelines), and is bound by its defined conditions and standards when enforcing restrictions. Likewise, when owners purchase properties governed by Associations, they agree to abide by the same terms. Now, let's get familiar with the two forms of due process (substantive and procedural).
1. Substantive Due Process - The Association's decisions must be fair, and not arbitrary or capricious
Homeowners must know that an Association cannot enforce a rule that does not exist in its governing documents. Therefore, upon receiving a notice of violation, homeowners should read the association's Declaration to determine if the rule the association claims to be violated is valid. Associations must have reasonable (1) written rules and procedures, and (2) enforcement policies that equally apply to all owners in the community to enforce a rule. Most importantly, the Association's rules must be consistent with applicable laws, and it must follow those rules when enforcing restrictions. This premise is consistent with a 1986 injunction lawsuit that ended up before the California Supreme Court.
In the case of Ironwood Owners Assn. IX v. Solomon (1986) 178 Cal. App. 3d 766, 772, 224 Cal. Rptr. 18, the Association demanded the removal of eight palm trees from the Solomons' property for having planted the trees without previously filing a landscaping plan, and obtaining prior written approval of the Association's architectural committee. The Court held that:
When a homeowners' association seeks to enforce the provisions of its CCRs [Declaration] to compel an act by one of its member owners, it is incumbent upon it to show that it has followed its own standards and procedures prior to pursuing such a remedy, that those procedures were fair and reasonable and that its substantive decision was made in good faith, and is reasonable, not arbitrary or capricious.
Moreover, the court indicated that the criteria to determine the "reasonableness" of an exercise of such a power by an Association are:
(1) Whether the [decision]… is rationally related to the protection, preservation or proper operation of the property and the purposes of the Association as set forth in its governing instruments, and
(2) Whether the power was exercised in a fair and nondiscriminatory manner
After considering the above elements, the court concluded that the Association was not entitled to require the Solomons to remove the palm trees. The Association failed to prove that its actions were regular, fair and reasonable as a matter of law. The Court provided the following explanation for its decision:
The CCRs carefully and thoroughly provide for the establishment of an Architectural Control Committee and impose upon it specifically defined duties, procedures, and standards in the consideration of such matters. The record as it stands discloses a manifest disregard for these provisions: whatever decision was made does not appear to be that of the governing body or the committee designated to make the decision; no findings of any sort bridge the analytic gap between facts and the conclusions of the decisionmaker, whoever that was; and the record provides no means for ascertaining what standard was employed in the decisionmaking process.
Simply put, an Association cannot govern outside its scope of authority, and must follow the established standards and procedures when enforcing a rule.
2. Procedural Due Process - Homeowners right to a violation notice and hearing before an unbiased decision maker
Under the Due Process Clause of the Fifth and Fourteenth Amendment of the Constitution, no one shall be "deprived of life, liberty or property without due process of law." Moreover, the American Heritage Dictionary defines "due process" as "[a]n established course for judicial proceedings or other governmental activities designed to safeguard the legal rights of the individual." Clearly, an Association is not an entity of the state government, so it is unlikely that the failure to provide an owner with a fair due process would violate constitutional rights. However, because an Association functions like a quasi-government, courts have required that Associations provide its members with basic elements of due process.
For instance, in Fairwood Greens Homeowners v. Young (1980) 26 Wn. App. 758, 614 P. 2d 219, 223, the Washington State Supreme Court reviewed the Association's fairness of review procedures and outlined the requirements of due process as follows:
The essence of procedural due process is notice and the right to be heard. The notice must be reasonably calculated to apprise a party of the pendency of proceedings affecting him or his property, and must afford an opportunity to present his objections before a competent tribunal.
Moreover, the Court of Appeals in California described the requirements of fairness in private administrative decision-making in Applebaum v. Board of Directors (1980) 104 Cal. App. 3d 648, 657-658, as follows:
The distinction between fair procedure and due process rights appears to be one of origin and not of the extent of protection afforded an individual; the essence of both rights is fairness. Adequate notice of charges and a reasonable opportunity to respond are basic to both sets of rights.
The court declared that a due process requires an administrative hearing before unbiased decision makers and "even the probability of unfairness is to be avoided,"--concluding that "[p]ersonal embroilment in the dispute will also void the administrative decision."
Therefore, at a minimum, the Association must provide the accused owner with the following standards of fair due process:
Adequate Notice of Violation
An opportunity to be heard
Reasonable opportunity to defend against the allegation
Appeal, if provided in the Association's documents
It is essential for owners to check their Association's governing documents, local statutes, and case law for guidance to what the legislature has determined to be a fair procedure. Most importantly, owners should ensure the Association's actions are:
Related to the purposes of the Association
Under the Association's scope of authority
Reasonable in its application
Carried out by applying the minimum standards of procedural due process
3. Tips to avoid HOA compliance problems
Choose law, not conflict. You must understand that homeowners associations are regulated by federal, state and common laws. In addition, associations must govern the community in compliance with the association's documents (Declaration, Bylaws, and Rules and Regulations). Therefore, to find out what your association can (and cannot) do, you must read your association's governing documents.
Pay your dues on time.
Read and understand your Association's Rules.
Seek Association approval prior to making any physical exterior alterations to your property.
Maintain your property in good condition and repair at all times.
If you receive a violation notice, take action within the time frame provided.
Talk to an attorney if you believe your homeowners rights have been violated.
4. Compliance hearing tips
Determine who has the authority to hear your case by reading your Association's documents. Is it the board? Or, an assigned committee?
Determine if you have a quorum (the number of decision makers required by the Association's documents).
Make sure the decision makers are not biased against you. For example, the person who is complaining about your alleged violation, or has a financial interest cannot serve as a decision maker.
Prove your case with facts and documents.
Review the Association's documents to determine written decision deadline.
Our goal is to provide owners with a general guidance and knowledge of their fair due process rights as homeowners. This article is provided for informational purposes only and is not a substitute for legal research and advice.