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Common HOA legal issues and how to avoid them



Every homeowner must know their legal rights and responsibilities as a member of a HOA. Awareness of these will provide you with solid references when dealing with all HOA’s internal and legal issues. Homeowners' associations (HOAs) are essentially a form of small governments, which means they have their own types of legal and financial issues that can affect homeowners. As the homeowners' association itself, you wont relish the position of having to defend your board members against a lawsuit and complaints. It's stressful, costly, unpleasant and counter-productive. Preventive and avoidance control measures can best defend members against lawsuits and undue complaints. A comprehensive and well crafted policy will ensure proper resolution of possible issues.


As a homeowner, you will probably come across situations where you need to work or deal with your HOA or neighbor/member. We aspire to live in a community where you feel safe, secure and comfortable in our respective homes. Most homeowners are unaware of the potential legal problems an HOA can face.


Homeowners’ associations have substantial rules, guidelines, restrictions, and governing documents. They also have numerous statutory penalties for offenses on these rules and regulations. Some restrictions may seem absurd to you, but they are there for good reason. If a homeowner ignores rules and regulations set forth by their HOA, they may be subject to legal action.


Failing to adhere to the HOA's governing documents.

The rules that govern a homeowner association (HOA) can vary greatly, but most HOAs have some basic rules in common. Some of these rules are set forth in the governing documents, which are the documents that establish the HOA and spell out its rules.


Failing to enforce CC&Rs quickly and consistently.

Enforcing CC&Rs takes time and effort, but it should be done consistently and promptly. If a new rule needs to be created or an existing rule needs to be enforced, make sure you have the board’s approval before taking action — otherwise you may face adverse reactions and find yourself facing lawsuits from unhappy neighbors who feel wronged by your actions.


Not having enough documentation to support your case.

Many HOA board members think they can rely on their personal recollection of events when they take action, but that's not always enough. If you want to avoid being sued or having a lawsuit dismissed, you must have written evidence of any decision made by the board, including minutes and resolutions, or a record of the discussion leading up to the decision.


Violating federal or state laws.

The HOA must follow all applicable federal and state laws. For example, if you live in a community that prohibits smoking outdoors, then you must comply with this rule or face fines. Your HOA should also be aware of any other rules that apply to you as part of your community's governing documents.


Unfair conduct by board members/members

Another common issue that occurs with homeowners associations is unfair conduct by board members/members. This can include discrimination, harassment and other misconduct that violates fair housing laws. To avoid these types of situations from occurring, it is important for homeowners associations to engage in proper management practices when dealing with owners and renters in the community.


Not filing taxes properly

It's important that HOA boards keep up with their annual dues and understand how to pay them properly. Members should also be aware of the consequences if their association fails to pay its taxes on time.


Bylaws are unclear or contradictory

When they're unclear or contradictory, problems may arise. For example, if there are two sets of bylaws and both claim to be the official ones, there's confusion over what's allowed and what isn't. Bylaws need to be clear and consistent so that members know what they can and can't do. It's important that you review the bylaws periodically to check for any changes in legislation or other factors that could affect them. You should also make sure that any new rules don't contradict existing ones.


Parking problems

If your neighbors are parking their vehicles on the street, this can be a problem for everyone. The most common reason is that they don't have enough space in their driveway or garage. If this is the case, talk to your neighbors about moving their cars into their garages if possible and then make sure it doesn't happen again by talking with them and reminding them of the rules.


Mismanagement of the association's assets and expenditures.

Mismanagement of the association's assets and expenditures is one of the most common HOA legal issues that homeowners face. Whether it's a financial issue, such as not paying taxes or insurance premiums on time; or a physical issue, such as not maintaining common areas properly or keeping up with repairs to common building components, these problems can lead to serious consequences for both individual homeowners and the entire community.


Failure to properly notify owners about meetings, votes and other important information.

Failure to provide proper notice can result in fines and penalties for the HOA and its board members. To avoid these problems, HOAs should make sure they have written procedures for how notices will be sent out and make sure they follow them. Secure the acknowledgement / receipt of notices by members.


Failure to keep proper financial records and enforce collection of assessments.

This is one of the most common areas where HOAs are sued by their members. If a member does not pay his or her dues, the HOA must take action to collect the money owed. If this does not happen, then there may be a violation of the HOA's governing documents and possibly state law as well. The association must keep accurate records for all of its transactions. It must also maintain a copy of its financial records in a secure place, so that they are available for members to inspect at any reasonable time.


Should you find yourself involved with a homeowner's association, it's important to know the most common legal issues that could arise and the best ways to legally address them. To avoid conflicts with your neighbors, take the time to understand what an HOA is and how it works. An HOA is a group of people who share a common interest — in most cases, their property. The association members elect board members who manage the community's finances and enforce its rules and regulations.


Your HOA should be a tool that you can use to protect your fellow homeowners and the quality of your neighborhood. But at the end of the day, your HOA is just a group of people working together to improve the community. The more you know about your responsibilities as an HOA member, and how to fulfill your rights as a homeowner, the better off everyone in the community will be.


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