We've got five things that will improve your understanding the role of the HOA's attorney and, let's face it, that's a great goal. Fortunately for the HOA's governing Board members, there are attorneys who specialize in representing the interests of HOAs. This post outlines areas of attorney involvement in HOA affairs. Let's get started.
Enforcing the HOA's rules. It helps to remember that HOA rule enforcement falls to the HOA governing Board. The Board is generally made up of owners of property covered by the HOA who volunteer their time. As lay people, the Board's interpretations of the HOA community rules are not always on the mark. Disputes with owners can arise -- that is, unpopular decisions the Board makes can affect the rights of owners in a negative way, leading to disputes with the governing Board. These disputes sometimes result in the Board's need to hire an attorney.
The Board also hires contractors and vendors in the process of conducting the HOA's business. Disputes between the HOA Board and these third-parties may require hiring an attorney as well.
Preparing the founding and governing documents. Of course, even without controversy, there are the legal documents underpinning the HOA that require an attorney's drafting skills. When a community decides to form an HOA, there are state rules to follow and, of course, federal rules like anti-discrimination laws apply to HOAs. Put simply, the HOA must follow the regulatory framework in the jurisdiction where it resides. Then, too, there are the rules that the HOA members agree to enforce against property owners.
As you can imagine, complex documents memorialize these regulations and rules. HOAs are typically set up as non-profit corporations which means there are the typical corporate founding documents, such as articles of incorporation and by-laws. Lawyers should draw up those. HOA rules also appear in writings known as covenants, conditions, and restrictions (CCRs). For concise language and consistent application of CCRs, as well as any less formal rules and regulations, lawyers draft documents outlining these provisions.
These governing documents are long and complex. They legally bind not only the governing Board but all present and future homeowners. They cover how to elect the Board members, the terms of Board members, and how to amend by-laws. Regulations covers all sorts of things ranging from whether HOA owners may have pets to defining clubhouse and pool rules. The HOA rules determine how the HOA assesses fees and collects delinquencies and what kind of architectural changes individual homeowners may make.
The contractor-developer often hires a professional HOA attorney to draft these founding documents as it readies the turnover to individual owners. Once in place, the HOA's governing Board retains or hires the HOA attorney to help interpret, amend, and defend the rules.
Representing HOA homeowners. Unfortunately, the Board sometimes learns of construction defects in the HOA units after the developer turns over control of the units. Examples of defects are improper grading or soil compacting in the common areas. These defects can lead to wet basements and cracked pavement/sidewalks that affects the common areas of the HOA community. If the developer will not voluntarily correct the defects, then the Board may hire an attorney to represent the interests of all the HOA homeowners in initiating legal proceedings against the developer.
Providing an expert opinion. Even with best efforts at drafting the rules and regulations in plain English, there are times that the governing Board may need an expert opinion to decide whether a particular owner's behavior violates the rules or the law. The HOA attorney can assist in interpreting HOA governing documents and rules and give the Board a full explanation of its position under federal and state laws.
Fee Collection and Enforcement. The goal behind HOA fees is to spread the financial burden of the community's upkeep fairly among all the homeowners. When individual homeowners do not pay their shares, the HOA may find itself unable to keep up the property as it should, resulting in declining community real estate value.
Hiring an HOA attorney to collect delinquent fees in a manner that conforms to state and federal laws is critical to the success of collection efforts. Besides, attorneys know the ins and outs of getting court judgments and liens against HOA units based on non-payment by property owners.
For more useful information on running your HOA, contact us to speak with one of our community experts.