HOA Help with Legal Matters
HOA legal help is a service provided to homeowners in homeowner associations (HOA) when they encounter disputes or legal issues related to the association. This can be through formal legal representation by an attorney or through less formal means such as guidance or mediation from experienced managers or board members. HOA legal help is intended to provide homeowners with a path through the complexities of the law and the rules of their specific association so they can get their concerns addressed and resolved . But why do homeowners need legal help from their HOA? There are many types of problems that may arise that require homeowners to seek assistance from an attorney or other HOA professional, including: There are too many situations to list that might require HOA legal help. Even if your dispute doesn’t fit a common situation is that homeowners need legal guidance from someone familiar with their community. They may need to appeal a decision or ask questions about how to interpret a new policy. In any case, it’s not uncommon that homeowners at some point in their association experience a situation where it makes sense to consult with an HOA professional to understand their options.
Legal Troubles Commonly Faced by HOAs
A variety of issues can contribute to discontentment between homeowners and their merchant associations (HOAs). For example, the way in which an HOA handles what constitutes a breach of contract, or how property is used, is a common source of contention. This often occurs when the HOA applies rules differently to various property owners, or when it applies ambiguous or outdated rules. Assessment collection is another issue to consider, as HOAs must be assertive and resolve slow payers without damaging relationships with homeowners. Further, issues with architectural control (where the HOA requires homeowners to have permission before making changes to the exterior of their property) can lead to disputes.
Property use disputes can take the form of restrictive covenants, exclusive right usage, association common areas or grounds maintenance. Common ownership rights include whether parking areas, tennis courts, pools or clubhouses are for the sole usage of association members or for public use. If the association and homeowners have competing claims to the same area, a dispute will ensue, resulting in the need for alternative dispute resolution or litigation.
When to Get Legal Help for HOA Needs
Legal matters can often be a point of contention for homeowners’ associations. If your HOA is facing legal issues, is not following its own rules, or simply needs legal advice on how to proceed with a particular matter, it’s important to know when to consult with an attorney. Here are some key issues that should prompt an HOA to visit with an attorney: · No one wants to utilize their association’s funds to pay for legal issues. Therefore, it’s important to follow things like notice requirements and other procedures to avoid disputes. · Associations are also required to maintain adequate insurance and a reserve fund, which can put significant financial strain on a community. · The Association or homeowner should have a lawyer review any indemnity provisions in the governing documents or liability insurance policies. · Indemnification provisions can hold the association and its insurer accountable if a claim against them is ultimately settled or that requires a significant up front defense cost. · Associations should hire an attorney to draft or revise their CC&Rs and other governing documents to ensure they are legally enforceable. · CC&Rs should be enforced for violations that affect the general health, safety and welfare of the community. · The HOA may wish to pursue collections against homeowner for failure to pay assessments. · An attorney should be consulted if the association has filed a lawsuit or needs to file a lawsuit against a homeowner. · An attorney should be used to assist in resolving disputes related to assessments or other business of the community. In addition to these key issues, there are some factors that will help you discern if the issue you are facing requires an attorney. First, when you receive notice of pending legal action, you should contact a lawyer immediately. This is not an issue you want to try to handle yourself. If you receive a demand letter that states you are required to do something (or lose a right), seek a legal opinion before taking action. In many cases, the lawyer may set up a call directly with the other party’s attorney, which can save time for everyone involved. In addition, if you believe your association is not properly following the governing documents, you should contact an attorney to determine if the issue could result in a dispute. Disputes that are not handled properly can get out of hand and result in costly litigation, so it is best to consult an attorney whenever you suspect any potential legal issue to minimize the time, costs and stress on the owners. If your situation involves a trust, a sharehold or a limited liability company, seek out a lawyer immediately. These entities involve complex tax issues that result in very costly penalties and fines if you do not follow the proper procedures. The cost of hiring an attorney will almost always be less than defending a lawsuit or filing a lawsuit – not to mention the mental toll that goes along with litigating a case – so don’t hesitate to reach out to an attorney for assistance.
Finding the Ideal Attorney for Your HOA
You’ve come to the conclusion that your very own resident-friendly HOA attorney is unable to represent you. Now what? Don’t fret. Starting the search for an experienced association lawyer is a logical next step. Begin with the brief list below to help you through the process.
1. Obtain names of qualified HOA attorneys through associations, acquaintances, and web searches.
2. Ask general questions such as:
a. What percentage of your firm’s practice is devoted to HOA law?
b. How long have you been an attorney?
c. Do you have experience dealing with similar issues?
3. Ask for references from HOA’s you’ve worked with.
4. Ask for pricing details after the initial consultation.
a. Will billable time be kept?
b. Will an hourly rate be charged?
5. Be prepared to provide input during the selection process.
a. Identify expectations & needs.
b. Are you working with a large firm or small firm? A solo practitioner?
6. Remember that detailed information about association financials – documents such as budgets, balance sheets, and bank statements – will be required.
a. You’ll be asked to provide useful information about the association’s governing documents covering bylaws, Articles of Incorporation, rules, and regulations.
As you can see, finding a good HOA attorney is much like shopping for one’s house or automobile. Finding the perfect fit can take a while. Patience is key in helping you select a professional who can fulfill the needs of your association.
HOA Governing Documents Explained
Bylaws: These are rules for managing the corporation. They explain the duties of officers and directors, the number of directors and members, when and how often to hold meetings, and other administrative details. Many bylaws require a 60- or 90-day notice to the owners before a membership meeting so that you have time to prepare for the meeting.
Covenants, Conditions , and Restrictions (CC&Rs): These are the governing documents that apply to homeowners and their use of their properties. The provisions in the CC&Rs control what owners can and cannot do to their homes and yards; when and where pets can be walked, what kind of beasts can be kept, and where they can be kept; and many other restrictions.
Other documents may apply such as:
A good HOA attorney can help you understand and interpret these documents and how you can enforce them against your members and residents.
Mediation and Arbitration in HOA Legal Conflicts
Alternative dispute resolution (ADR) methods are frequently more efficient and cost-effective techniques for resolving disputes. These methods often help parties find more creative resolutions than what may be available through the courts. Mediation and arbitration are the two most commonly used ADR tools in HOA cases.
Mediation is the most common method of resolving green belt, inspection, breach of contract, deed restriction and covenant enforcement disputes. The mediator’s goal is to achieve a voluntary settlement that is mutually beneficial to all parties. Mediation frequently occurs after a lawsuit is initiated. However, it can happen before the lawsuit is filed while the dispute is still being negotiated. In these cases, counsel often recommends mediation when the parties have reached an impasse in reaching a mutually acceptable resolution of the claim. The mediator meets separately with each party to help them determine whether or not a settlement is possible. The mediator will then be the single point of contact with the parties rather than direct communications between the parties taking place. It is important that the mediator be a dues paying member of the association (preferably a board member) to keep costs down. Also, the mediator must be neutral, fair and objective. The mediator is not allowed to be partial to either side because the mediator also plays the role of the judge in an arbitration situation. After the mediation, the mediator renders his or her opinion as to how the dispute should be resolved. The mediator does not render a determination of which party is right or wrong, merely a resolution the mediator feels would be acceptable to the parties in terms of abilities and resources to follow through and resolve the matter. One great benefit of mediation is that it has helped to resolve many issues that would otherwise have been set for trial.
Arbitration is another method for settling disputes. Although it is not considered formal adjudication, it closely resembles a trial. While there is no jury present, all involved parties are expected to act and speak professionally and respectfully to one another and the mediator/judge. There are two types of arbitration: voluntary and mandatory/advisory arbitration. Voluntary arbitration is when both parties agree to submit their case to an arbitrator. Mandatory/advisory arbitration is a type of arbitration often required by the court. Some of the advantages of this method include the following:
This method is helpful, efficient and inexpensive when the dispute involves a smaller sum of money (less than $50,000.00). Arbitration is an effective tool for resolving many disputes and is used instead of litigation in most cases.
Case Studies: HOA Legal Battles in Action
Case Study 1: Fence or Obstruction?
The residents of a high-end condominium complex in a large city were affected by the installation of even larger security fences around the entire gated community. The fence was deemed necessary by the association’s board to help control a string of recent burglaries. A unit owner, however, claimed the fence would obstruct his view of the downtown skyline when he was standing on his balcony.
Even though this resident lost his view, even more importantly, he lost his right to privacy by having to close his panels which opened up his balcony to the outside. He first contacted the management company but that was not able to resolve his issue so he contacted the association’s board of directors. After several meetings and discussions with his unit owner neighbor, this director was able to convince the board to spend the money to install a glass fence that would be more costly and a little harder to see, but would not disrupt this owner’s view. And while the glass system may seem somewhat expensive, the board viewed it as an investment in the aesthetics of the community, as it would, no doubt, add to the value of all their units. And as a result of this study, the board was able to keep this resident calm and collected and retained him as a long-term owner.
Case Study 2: Door Dunn
A three-unit condo association became dysfunctional over the years when the unit owners failed to regularly meet and hold discussions concerning the management of the property. During this time, one of the unit owners took it upon herself to change the door knobs and locks in all three of their units because she felt the existing hardware was dated. While one owner didn’t particularly care, the other was irate because it cost him money out of pocket to have it changed back. Because the unit owners failed to address the issue with their board or manager, this simple problem developed into a contentious lawsuit.
Had the owner not been too embarrassed to contact the board/manger and demand immediate action, he could have avoided costly attorney fees and court time. They could have addressed the matter if they had taken the initiative to set up a meeting and discuss management issues. The moral of the story is: be proactive.
Case Study 3: Pet Detente
A large, pet-friendly association had a problem with animal waste littered throughout the common areas of the property. In addition to being unsightly, the repeated occurrence was causing a health hazard and a nuisance to the unit owners. The board decided to institute a $250 fine for any pet that was not on a leash or unleashed and/or who’s residue was not picked up. Further, if the mess was not picked up, the association was empowered to do it and charge the owner the $250. First, notices were delivered to unit owners notifying them of the fine. Then a flyer was distributed to remind all residents that the fine would apply to the pets in the yard, common area, elevators, stairwells, and inside the unit if it was not picked up. If a resident received a fine, they would receive a letter from the association advising them of the fine as well as potential actions they could take to reduce the fine and next steps if the behavior continued. Residents realized that the fine was reasonable and no owners were fined more than once.
Proactive Steps to Legal Help for HOAs
While some legal issues are unavoidable, many can be prevented or reduced through proactive planning. This section will delve into key preventative legal strategies and why they matter for your community. In most cases, well-worded governing contracts serve as a buffer against unwarranted litigation. Review all governing documents with your HOA lawyer to ensure you have the protections you need. Most often illustrative of preventive strategies is the process by which governing rules are established and enforced. Rules should be discussed and adopted by the HOA board, sent out to the association for review and comment, and subsequently approved by the board before becoming effective (and enforceable). When properly adopted, an HOA’s rules have the full force and effect of a contract and are susceptible to civil enforcement. It is the homeowner association’s responsibility to ensure that each of the procedural steps are taken to guarantee the rules and regulations are properly enforceable against its members. All homeowners and tenants should be properly notified of the rules and regulations of the community and of any changes that are made. Communication is key to obtaining voluntary compliance and avoiding bad feelings . Your HOA’s website is an ideal place to publish important documents, including the governing documents, rules and regulations, architectural guidelines, and meeting minutes. These resources also provide easy reference points in the event a violation is deliberately or inadvertently committed. Documentation is essential in the prevention of legal disputes. Make sure that you give proper notice to users when a violation occurs. Proper notification will sometimes result in easy adjustments to the offending behavior and reduce the chances of an escalating situation. Every warning letter should detail the alleged violation, any relevant rules section, and the date of the next occurrence. Then, the HOA can investigate it and obtain the offending party’s explanation for the violation. Be sure to send these letters certified and retain evidence of delivery to ensure they are received. Retaining copies of these correspondences is vital to the defense of lawsuits or other legal claims. When an issue cannot be resolved with nice letters and conversations, the next logical step is to involve a professional third party. Consider hiring an attorney to send a demand letter or even to assist in mediation. The key point is to be thorough in your efforts to resolve the issue before moving on to more drastic actions.