If you have ever lived in a planned community with a homeowners’ association (HOA), you may have formed distinct opinions about whether HOAs are a good or bad thing! In most cases, HOAs help keep up the property values in the community by enforcing commonly accepted restrictions. Sometimes, though, common HOA disputes will arise when a homeowner is unaware of the restrictive covenants, interprets the rules differently, or ignores them altogether.
What are the benefits of a homeowners’ association?
HOAs exist for several purposes. They are responsible for care and upkeep of common areas in the community. This might include the entrance(s) to the community, signage, a pool or other amenities, or lighting and utilities (where the community is gated or streets are private). In a townhome or condominium community, the association may also cover roof repairs/replacement, exterior maintenance, alleys, driveways, etc. All homeowners benefit from these activities, as they typically make the community a desirable place to live. If common areas are limited, the annual or monthly HOA dues may be relatively small. In other cases, the fees may be higher to build up reserves to pay larger or longer-term expenses like resurfacing a pool or replacing the roof on the building.
HOAs also define and enforce community standards in an effort to protect homeowners and ensure potential buyers are not deterred by the actions of a single homeowner. If your neighbor, for example, decided to paint his house a bold purple or store dozens of junk cars in his yard, you might object to having his see his property every day or have difficulty selling your home. In this case, the HOA covenants would benefit you. The rules may protect you individually, as well. As an example, if you plan a DIY project to install a patio made of concrete pavers in an area where the amount of impervious surface is limited, your architectural review board (ARB) may deny your request based on their knowledge of the county’s rules. While you might balk at this, had you built the patio without knowing the restrictions, when you went to sell your home, you might have had to remove the entire patio before you could complete the sale.
What are some common HOA disputes?
While most covenants and rules make sense to homeowners – for example, not turning your lawn into a parking lot – I do see some common disputes between the HOA and homeowners, as well as between neighbors.
- Architectural control issues are probably the most common legal dispute. This includes homeowners who fail to get approval for a project – even something as simple as painting the front door and shutters – before starting. Complaints involving the construction of outbuildings, fences, or other structures on a subdivision lot are common. Without approval, the HOA may demand the homeowner repaint the shutters or remove the structure. If the homeowner fails to do so, the HOA may have the right to do the work and bill the homeowner.
- There may also be challenges when the developer relinquishes control of the HOA. If you have ever bought a new house in a new community, you probably know the developer retains control of the HOA until a certain percentage of lots have been sold OR until a certain period of time has passed (usually seven years). Once the plateau of lots sold has been reached, the HOA is turned over to the homeowners to manage. The rules differ by HOA but are written to favor developers. This may include such things as giving the developer three votes for every lot (versus one for homeowners) or giving them a seat on the HOA Board and any subcommittees. As the new Board gets more involved, there may be disputes with the developer that need to be resolved. In one community, for example, the new Board discovered the pool pump room had not been built properly and needed significant improvements. Fortunately, the developer agreed to have the work redone properly without legal action.
- Enforcing the covenants and restrictions will be an ongoing challenge for the HOA Board. The HOA can expect some percentage of homeowners will not pay their fees on time – or at all – either because they have fallen on hard times or simply refuse to pay. This can be especially challenging when a one-time assessment is needed to cover an unexpected expense, as not all homeowners will have the money on hand. North Carolina law defines the HOA’s legal rights and the actions that must be taken to collect monies owed. There will also be situations where homeowners do not read the covenants or simply ignore the rules. In such cases, the HOA may be prompted to take the lead on enforcement or fines, as permitted under the covenants.
If the rules are not 100% clear about what activities may or may not take place on properties (types of pets you may have, use of recreational vehicles, storing trailers and motorhomes, etc.), or as technology and outside changes take place that impact the HOA, the Board may need to consult with an attorney to get an opinion on how to proceed to best protect the HOA and its member-owners. Contact us today if you need to speak with an attorney regarding an HOA matter.
One issue that is starting to come up more and more is retention pond that are for neighborhood water run off. A lot of HOA’s have not adequately funded for when these will need to be cleaned out. Local government can send an inspector in and say you have to much sentiment and your pond(s) need to be drained and dredged. It can be very expensive and if the Dues were never adjusted for these expenses it can be an assessment of a substantial amount.
Very true. It is important for the Board members to have a good understanding of all the possible expenses they may incur. Not all are obvious.