Homeowner Associations Laws
Homeowner associations are created for the purpose of developing, managing and selling a category of residential housing called common-interest developments. This category includes condominiums, cooperative apartments, planned-unit developments of single-family homes and other planned communities. Although laws vary from state to state, homeowner association laws are intended to ensure responsible governance and effective management of the common-interest development.
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Establishment
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The homeowner association (HOA) is established by the developer of a common-interest development. Typically, the developer will prepare a governing document that declares the rules of the common-interest development must be obeyed by all owners, their tenants and guests. The governing document goes by various names, including "covenants, conditions and restrictions" (CC&Rs), "master deed," "by-laws" or "rules and regulations." This document is usually recorded in the county where the development is situated. The HOA derives its authority to act from this document.
Governance
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The HOA is governed by a board of directors that is elected by the HOA owners according to the governing document. The board in turn can appoint officers, such as a president, secretary and treasure, to be responsible for the day-to-day operation of the HOA. Sometimes a professional management company is contracted to perform these tasks. The board can also form special committees for specific tasks, such as a neighborhood watch committee or pool committee.
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HOA Power
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In many ways, an HOA functions much like a local municipality by providing services to the development, regulating the activities of the development's residents, levying assessments for special development projects and imposing fines for rule violations. The HOA even has the power to institute and prosecute legal actions. However, unlike a local municipality, an HOA is not subject to the same constitutional restraints as a governmental agency. In recent years, this has lead to the passage of federal and state laws restricting the power of HOAs regardless of the rules stated in its governing document.
Limits on Power
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Although most HOA rules are easy to accept, others prove quite controversial, such as rules restricting pets, parking spaces, recreational facilities, subleasing and unit improvements or amenities like satellite dishes. For instance, the controversy over HOA restrictions lead to a provision in the federal Telecommunication Act of 1996 that permits any homeowner to install a satellite dish 1m in diameter or smaller regardless of any HOA rule prohibiting such dishes. Various states have passed similar type of laws that override HOA rules. Many of these state laws place restrictions on the power of the HOA to impose fines for rules violations by a homeowner.
HOA Considerations
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When you consider purchasing a home that is part of a common-interest development, you should read the rules of the governing HOA thoroughly to determine whether they comport with your living standards. Although every HOA governing document should have a provision explaining the procedure for changing HOA rules, changing existing rules is rarely easy given the requirement for a majority or even a super-majority vote of the homeowners to effect the rule change. A homeowner can sue the HOA to challenge a rule, but this will almost always be expensive and will certainly damage the relationship among opposing homeowners.
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References
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