*The original article is posted at HOA Management
Many homeowners don't know how to proceed when their HOA violates their own rules. They are unsure what consequences are in store, if any, and this often leaves them feeling cheated. After all, a homeowners association enforces rules and hands out violation notices when residents break them. Thus, it stands to reason that an HOA should adhere to its own rules, too. WHAT HAPPENS IF HOA VIOLATES THEIR OWN RULES?
Homeowners associations are responsible for managing communities; a big part is enforcing the rules. Every HOA has a set of governing documents — including CC&Rs and bylaws — that dictate the rights, responsibilities, and obligations of the association and the homeowner. When a homeowner breaks a rule, they can face several possible penalties.
But what if the HOA violates its own rules?
Just like homeowners, the HOA, represented by its board, must abide by the governing documents. When an HOA fails to follow its own rules, a series of consequences can occur. For one thing, it sends the wrong message to homeowners. If the HOA can get away with violations, so can the residents. Eventually, the community will become chaotic, resulting in diminished appeal and lower property values.
Of course, it is another matter when an HOA board member breaks the rules. If a board member violates a parking rule, the rest of the board should follow proper procedures. That board member should receive a violation notice, get an opportunity to attend a disciplinary hearing, and face the same penalties as non-board members. Board members don’t get special treatment just because they’re on the board. HOA NOT FOLLOWING ITS RULES? WHAT CAN HOMEOWNERS DO
Homeowners understandably feel frustrated when their HOA does not follow its own rules. After all, non-compliance sets the wrong tone for the community. Furthermore, it is unfair for an association to emerge unscathed from violations when homeowners themselves face potential fines and other consequences. Unfortunately, very few laws, if any, present remedies when the HOA violates its own rules. Depending on the state, an association may need to pay fines, but that is as far as most laws go.
What can homeowners do when their own HOA fails to adhere to the governing documents? 1. OPEN A DISCUSSION WITH THE HOA BOARD When faced with a problem, any dissatisfied homeowner should first tell the HOA board. More often than not, approaching the board and bringing the issue to their attention will resolve the concern. Homeowners can usually contact board members or schedule a meeting with them. If a company manages the association, homeowners should contact the community manager. Of course, explaining the situation to the board is not enough. Homeowners should back up their arguments with evidence. Bring copies of relevant provisions in the bylaws or CC&Rs. Have signed witness statements ready. These can help strengthen an owner’s case and convince the board to start making changes. 2. PROPOSE AN AMENDMENT If the HOA board violated bylaws, it is necessary to look at the root cause of the problem. Sometimes, the requirements in the bylaws are outdated or impractical. For example, an HOA’s bylaws may require the board to meet on the second Tuesday of each month, but current board members may only be available on weekends. In this case, it is simply a matter of making an amendment. Homeowners can propose amendments or encourage the board to make them. If it is an issue with enforcement powers, the board can push to change the CC&Rs. Depending on state laws and the CC&Rs themselves, this typically requires a vote from the membership. 3. REMOVE A BOARD MEMBER If an HOA violates its own rules, it could be due to an underperforming board member. It is not uncommon for a rogue board member to force control over the rest of the board. They might be influencing decisions or intentionally disrupting operations. There may also be a conflict of interest, an issue of corruption, or just plain laziness.
Homeowners can push for removal if there is reason to believe that a single board member is causing non-compliance. Removing a board member is not always easy, though. State laws and governing documents usually dictate proper procedures and requirements. In North Carolina, for instance, Section 47F-3-103(b) of the Planned Community Act requires a majority vote from the membership. Homeowners should check the laws in their state and the provisions in their bylaws to understand how to remove a board member. 4. TAKE LEGAL ACTION Taking legal action is the last resort that homeowners have. If an HOA fails to perform its functions, homeowners can sue. This will require homeowners to prove their claim, though. Moreover, lawsuits can be very expensive and time-consuming. Plus, there is no guarantee that homeowners will win their case. As such, unless the issue is serious enough or there is conclusive evidence, taking this route is often not worth the resources. THE NEGATIVE EFFECTS OF AN HOA NOT ENFORCING RULES Several negative effects can follow when an association fails to adhere to its own rules. 1. IT OPENS THE BOARD TO CLAIMS OF SELECTIVE ENFORCEMENT The HOA board has a fiduciary duty to enforce the rules consistently and fairly. It could be considered selective enforcement when the board doesn’t enforce the rules. Selective enforcement harms the association’s reputation and makes it vulnerable to liability. 2. IT WILL MAKE IT HARDER TO ENFORCE RULES AGAINST OWNERS In connection with the previous point, an HOA board that doesn’t follow its own rules will have a harder time enforcing the rules against homeowners. Homeowners can argue that the HOA no longer has the authority to enforce the rules because it does so in a selective manner. 3. IT CALLS THE BOARD’S CREDIBILITY INTO QUESTION An HOA board that does not follow proper procedures may ignite doubts about its credibility. Even if the board violates a small rule, such as holding the meeting at the proper time, it can still greatly impact trust. If the board struggles to follow this one rule, what other rules could it violate? 4. IT MAKES THE HOA VULNERABLE TO LIABILITY As mentioned previously, homeowners can sue the association and its board for not enforcing the rules. Many have sued for much less. Even if the HOA is not afraid of legal action, at the very least, it could rack up expensive attorneys’ fees. WHAT THE HOA BOARD CAN DO It may be convenient to violate the rules sometimes, but that does not make it acceptable. Some boards make the argument that previous boards have been doing the same thing or that they have been doing it this way for a long time now. But repetition does not change the rule. If the HOA board really wishes to do things differently, it should follow the right protocols by amending the governing documents. Otherwise, the board should adjust its current practice to comply with the association’s rules. If a board has not been enforcing a rule, it is necessary to inform all owners that enforcement will resume. This way, owners won’t be taken by surprise. FINAL ADVICE When an HOA violates its own rules, it runs the risk of rendering other rules unenforceable. Homeowners have certain recourses to compel the board to follow the rules, but state-mandated remedies are usually limited. This is why many resort to suing the association. If an HOA board wishes to avoid legal issues, following the rules consistently and unbiasedly is best.