The Scope of an HOA’s Authority
The authority and powers conferred to an HOA are typically set forth in the HOA’s governing documents. Most often, the Declaration of Covenants, Conditions and Restrictions (CC&Rs) provides the authority for the HOA to adopt and enforce rules and regulations. The Governing Documents also include Bylaws and Rules and Regulations.
Often the CC&Rs include a provision granting the Board of Directors the authority to adopt reasonable Rules and regulations governing the use of all or portions of the community for the purpose of maintaining the safety and appearance of the community. This may also include the power to impose reasonable fines and infractions of the Rules. The Bylaws often include a provision stating that the Board of Directors is granted the authority to enforce the CC&Rs and Rules, and to impose sanctions against members and/or their tenants, guests and other invitees for violations.
Most Statutory Regimes have laws that further require that a homeowner’s association have a collections policy for collecting delinquent assessments. This policy must be in writing and must be made available to the members of the HOA . Typically, the process under the general collection policy would include: 1) sending the alleged offender a warning letter allowing them a reasonable period of time to cure and/or respond to the violation and then allowing a reciprocal period of time for the offender to respond; and 2) if a demand letter is sent (which includes the basis for assessment of fines), and such letter is ignored and the alleged violation continues, then the HOA is typically required to schedule an informal hearing with the offender to determine the validity of the alleged violation before fines can be levied and assessed to the owner.
While the CC&Rs and Bylaws are enforceable under the common law (law that is not based on statutes or written legislation), most regimes also have statutory law governing home associations. In these jurisdictions, an HOA has an additional source of governance authority and scheme for the enforcement of rules and regulations through statute. Statutory laws typically give HOAs rights of enforcement similar to that of a private citizen, with the homeowner’s association, board of directors, and/or its delegated representative or management company having the following authority:
The attorney and manager should be familiar with the statutory framework applicable to the particular HOA for which they work.
Typical HOA Rules and Regulations
As a significant governance instrument in the community association context, covenants place binding restrictions upon both the association and its members. HOA rules and regulations – enforceable under the declaration and found in the association’s policy and procedures handbook – are one means the HOA implements the decisions made by the board of directors and communicate them to the membership.
Rules and regulations typically are adopted to clarify various provisions in the declaration, fill in gaps in the declaration, or expand upon declarations in order to address the unique circumstances of a particular community. Because rules are part of the HOA’s governing documents, in most states they must be consistent with the declaration, relatively clear, and applied reasonably.
Rules should be specific enough to provide adequate guidance, but vague enough to provide some leeway for the association in evaluating enforcement. The rules should address the association’s needs and interests as well as the interests of the members. It is also critical that rules be enforced consistently and uniformly, or risk discrimination claims among members.
Common rules and regulations include: maintenance responsibilities; maintenance restrictions and standards (e.g., garage doors, awnings, decorative objects); restrictions on noise (e.g. TV, speakers, parties, outdoor activities); pets (e.g., weight, species, indoor pet restrictions); children (e.g., minimum age, outdoor activity restrictions); recreational facilities (e.g., age restrictions, hours of operation); vehicles (e.g., eligibility, parking, boats, trailers, repairs); exterior modification restrictions (e.g., window coverings, decorative objects, exterior alterations); guest/patron/shuttle policies; and special assessments.
For example, an HOA may restrict the display of political signs on property commonly owned or maintained by the HOA. Political signs, which include campaign signs and those offering support for any issue or candidate, can be a source of conflict for elections and voter initiatives.
Homeowners who are concerned with either "overkill" or no restrictions on political signage in an HOA may find the following restriction unacceptable:
No person shall paint, display, erect, maintain, permit, or permit to remain, any sign of any kind whatsoever or any kind of advertising device or other object on any portion of the Properties or on any property de-TAGed to or affecting such property, except that owners or occupants shall be permitted to have reasonable size signs on their lots in connection with the rental, sale, exchange or purchase of any Lot, provided that no such sign shall be displayed earlier than seven (7) days prior to the putting of the LOT up for sale, lease or rent and such sign shall be removed within three (3) days after the said sale, lease, exchange or easement, as the case may be, has been consummated.
A reasonable restriction on political signs, however, might place restrictions on their number and location, and require the owner to obtain permission before erecting the sign. In addition, the sign restriction may set reasonable time limits on the duration of the display. Such restrictions also should address who, if anyone, in addition to the political sponsor, would be responsible for removing the sign after the election or petition process.
Informing HOA Members of Rules
One of the biggest challenges an HOA faces when it comes to maintaining and enforcing its rules and regulations is a lack of homeowner awareness. Often, association leaders assume members are aware of the full extent of the guidelines. If owners do not understand the association’s rules and restrictions, they cannot ensure compliance, nor can they make the correct appeal when they happen to violate a rule. The first step in handling a rules violation is first ensuring that all owners are aware of the rule in question.
Associations can take several measures to help educate members on the rules and restrictions within their governing documents. Providing copies of the governing documents to owners at move-in is a good practice, but should not be the only time members are provided with information about the HOA’s rules. Providing rules and restriction summaries in newsletters, via email blasts, and well-maintained and organized websites is another way to ensure owners are aware of the covenants and restrictions. In addition, hosting rules workshops is a good way to engage members, but members should be required to sign outside the meeting room indicating they attended the meeting and received a copy of the rules and restrictions. Failure to keep and maintain these logs of distribution can mean disaster in a court of law if an association needs to impose a fine or foreclose on a lien.
Education is an important step in ensuring strong homeowner compliance. Proactive homeowner education regarding the covenants and restrictions can prevent unnecessary conflict between owners and the association board or community manager over rules violations.
Tracking Adherence to Rules
"In order to enforce the association’s rules, the association must first know that the rules are being broken."
In the last few years, HOAs have become more sophisticated regarding methods of enforcing rules via enforcement and corrective action. One of the most common ways in which an association can monitor compliance is by way of periodic inspections. By way of example, if a home is located next to a pool, the association is likely to perform inspections of the exterior of the home. Another style of inspection that is often used is to inspect the same area over and over at a random time period (i.e. every day for a week, then every other day for a week, etc.).
A periodic inspection of the common area is also very important. For many associations, this is the only way they can discover violations. An association should walk, drive or patrol common areas on a regular basis as appropriate. In addition to monitoring the common area for violations, the association should keep records of these inspections. A summary will assist the manager in issuing violation notices and allow managers to track compliance with previously issued violation notices.
Some communities supplement regular compliance inspections by asking residents to report rules violations. These residents serve as the eyes and ears of the community and report violations to management when they observe them. This information can then be used to issue violation notices.
Responding to Rule Infractions
Enforcement Process
Typically, an owner will be first notified of any violations of the governing documents by a warning letter of some type. The warning letter should contain the following information: The violation letter should be sent to the offending owner via regular US Mail, certified mail/return receipt requested or by email. Note, sending the violation letter via email, if authorized in the governing documents, is a good way of being able to confirm that the owner received the notice. Typically, an additional warning will not be sent to the owner for the same violation. Of course, if the owner is given an opportunity to respond to the violation once the letter is received, and the owner provides an explanation as to why the owner believes that the subject violation does not exist, then it may be advisable for the association to consider holding off on taking any further action until the explanation is reviewed . Once it is determined that the subject violation has occurred, the offending owner should be provided with a notice which includes the following: If the offending owner receives both warning letters and refuses to comply with the provisions of the governing documents, additional fines can typically be imposed upon the offending owner monthly or other intervals, as determined by the association. Depending upon the severity of the rule violation, the association may also choose to request that the fines be paid pursuant to a promissory note secured by the member’s interest in the property. Failing entry into a promissory note securing the unpaid fines, the fines must then be addressed through the lien process in accordance with the association’s remedy provisions and applicable law.
HOA Conflict Resolution
As with any other set of rules, some rule violations will inevitably lead to conflict. Addressing reported violations can be all the more vexing when the resident does not admit to the violation or refuses to comply with the rule stated in the declaration. This is true even when the board is diligent in addressing violations and in getting back to owners in a timely fashion. Many boards make the mistake of thinking that fixing the failure in communication and process is the end to the problem when it actually may only be the beginning.
Effective enforcement of rules and seeking voluntary compliance are key. However, disputes will always arise, so having an established mechanism to resolve disputes is vital. The first step is to have clearly defined rules, as noted above, and a process in place that follows those rules. People often resent being told what to do in general, but believing that enforcement is arbitrary can add a new layer of resentment. Homeowners should be given a meaningful opportunity to be heard before sanctions are imposed, but boards often get stuck trying to implement sanctions when out-of-control emotions can cloud their judgment. It can be helpful to have a committee, manager or lawyer assist.
As an alternative to levying fines and other sanctions, alternative dispute resolution (ADR) mechanisms such as mediation and hearings should be considered. Many states require boards to offer the owners mediation before they can seek monetary or injunctive relief in the courts. The difference between ADR and the traditional court system is that the matter is presented to a third-party neutral who assists the parties in negotiating a resolution that they can both live with. A court case is not the only remedy to effectuate a change in behavior and it can often be costly. If the parties are unable to resolve the dispute through mediation, a hearing officer (often a retired judge or attorney) can hear the matter and make decisions about fines, suspension of privileges and/or other sanctions. The advantage of going through a hearing officer is that important due process requirements can be discussed before the case goes to court.
The Role of Legal Action and Penalties
Legal action may be a necessary step in upholding association rules. If rules are repeatedly violated, and offending homeowners have not responded to continued correspondence and effort to find a solution, legal action may be the only alternate to allow the HOA to protect the community. This frequently includes the filing of a lawsuit, civil action, or other legal action against offending members. If the action is not directed against a member of the HOA, but rather against a non-member (e.g., a company operating in the community), the HOA may be able to request injunctive relief that applies to all of the non-members that are violating or causing a violation of the HOA’s rules.
Various legal proceedings may be available to the HOA based on the situation, but it is generally preferred to use a lawyer to assist in determine whether it is appropriate to pursue legal action, and which type of action is appropriate. This can include fairness in the appointment of receivers, if the HOA’s governing documents allow it, for example.
The HOA has an obligation to its members, including fair treatment of all association members, and to avoid actual or perceived selective enforcement by having well-documented and consistent procedures for enforcement of association rules.
Maintaining Good Relations with HOA Members
One of the most challenging components of enforcing your HOA rules and regulations within the community is balancing and maintaining a positive relationship with residents. In any community, there will always be rogue elements that push the envelope by not following the rules. The issue arises when homeowners challenge the concept of followership by entering into the gray areas of rule compliance. Just as there is no black or white when it comes to enforcing regulations on an HOA property, owners can sometimes present gray areas within that are open to interpretation.
While many homeowners will abide by the same rules of conduct every day, others will take advantage of some gray areas to justify breaking the rules. For example, if an overnight guest trips and falls on the sidewalk that the HOA has neglected to clear of snow, the rules may not spell out how the association is responsible. The guest may choose to take legal action against the HOA for the lack of maintenance, depending on the laws in the state in which the community is located.
Unfortunately, inadequate maintenance may also occur with other facets of the neighborhood as well, including compliance with other rules and regulations . Some homeowners may choose to ignore the rules despite warnings to correct defiance, thereby causing more conflict within the community. Even in these instances, the HOA board must enforce the rules consistently while treating all homeowners fairly and equitably.
In the end, rule enforcement within a community is all about maintaining a positive working relationship with all homeowners. The HOA should do everything possible to enforce the rules without becoming overly aggressive in its efforts. This in turn will lead to a general feeling of harmony among most owners, even those that choose to bypass the rules for their own convenience. While your community may border on utopia once the rules are adequately enforced, it’s important to find a happy medium between enforcing the rules and maintaining owner satisfaction.
Creating that delicate balance between HOA rules, regulations, order, and harmony is the key to fostering a positive community environment that provides stability and general prosperity among all families. In addition to providing pleasant living conditions, positive association practices can also help preserve property values. As a result, everyone will have a vested interest in the neighborhood by keeping their property values stable in both good and bad economic times.