Monday, March 24, 2014

Homeowner Associations (HOA's) - one size does not fit all

Homeowner Associations (HOA's) - one size does not fit all

HOA's can be self managed or enlist a management company.  The biggest issue is ALWAYS the enforcement of the covenants and bylaws.

Condos mostly deal with noise and parking.  Single family homes generally deal with additions, fences, landscaping and common areas.

The Board has a duty to reasonably enforce the covenants and rules and avoid risk liability.  At the same time, board members are residents - so it can lead to personal attacks and uncomfortable situations. 

Why the rules?  
Protecting values, required by governing documents, promoting harmony within a neighborhood and to avoid legal proceedings against the neighborhood.

Who typically breaks the rules?
Uniformed homeowners - be sure all property owners have a copy of the covenants and restrictions and are on some sort of distribution list for updates and meetings
Procrastinators - you know who you are!  Best to just follow procedure and be persistent.
Hardship - they are willing to remedy, but the pocketbook will not underwrite the expense.  May need some assistance to waive fines or arrange a payment plan
Defiance - just follow procedure to try to avoid escalation.  HOA's should have an attorney to consult in these cases.

There are usually architectural and behavior guidelines such as:  fences, mailboxes, pools, sheds, noise, parking, common areas, age, etc.

There should be regularly scheduled inspections of the neighborhood so that issues do not go undetected.  Working after the fact can make enforcement and compliance difficult.

An association's approach to enforcement is critical.  It should be timely, consistent and uniform.  Associations that allow deviations is putting itself and its future actions in jeopardy. 

HOA documents sometimes have a No Waiver Clause that means if they fail to enforce something in one case - it does NOT constitute a waiver of the right to later enforce that same rule or provision.

Avoiding violations is the most ideal situation and can be accomplished by:
  Education and communication
  New Member welcome package
  Email reminders
  Mailed annual meeting notice
  Review of governing documents for outdated and conflicting provisions

Summary of Best Practices:
  Educate residents and send email reminders
  Conduct regular inspections
  Review the governing documents on a regular basis
  Maintain a book of resolutions and rules supported by meeting minutes
  Utilize management companies and attorneys experienced in HOA laws
  Adopt enforcement procedures via a resolution
  Make enforcement uniform, timely and consistent
  Maintain D & O (Directors and Officers) insurance
More details can be found  HERE

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