OVERVIEW
We recently ran a statistical analysis of over 5,000 separate fact patterns to determine the nature of the most common disputes involving HOA members and their HOAs.
The following represents the top five most common areas of concerns for HOA members. You’ll notice as you read through these that, while each concern is separate from the others, each of them share a lot of similarities and overlap.
NO. 1: FEE INCREASES
Fee increases—whether they come in the form of increases in monthly (i.e., regular) dues, special assessments, or fines for rule violations—represent a common area of concern for homeowners living in an HOA. For obvious reasons, HOA members are entitled to expect that increases in fees, or the imposition of special assessments, are both reasonable and justified.
HOAs are responsible for maintaining, repairing, and replacing the association’s common areas. They may also be responsible for providing certain services (e.g., security). The costs of providing those amenities/services is, at least ideally, supposed to be covered by the monthly dues paid by the members.
Understandably, HOA members often become concerned when their HOAs decide to increase monthly fees without any explanation as to why increased fees are necessary. And when it comes to special assessments—especially large ones—HOA members frequently become very concerned. If such special assessments are imposed to make repairs to common area elements that were clearly not maintained (i.e., as a result of prior board neglect), HOA members often become resentful.
Disputes also frequently arise in associations with unusually high fine schedules, where homeowners may feel that the fines for rule violations are so excessive or unfair as to violate the law’s requirement that such fines be reasonable.
A well managed HOA will address these types of concerns by being transparent about the fees they charge and the reasons for any fee increases or special assessments. Homeowners have the right to request a breakdown of how their fees are being spent, and HOAs should be able to provide this information in a clear and concise manner. A well managed HOA will also follow a fair and consistent process for imposing fines for rule violations.
Unfortunately, a lot of HOAs don’t operate in an open, fair, or reasonable manner when it comes to spending the HOA’s money, and this almost always leads to fee increases and special assessments.
NO. 2: RULE ENFORCEMENT
HOAs are responsible for enforcing rules and regulations that are designed to maintain and improve the association. These rules may cover a wide range of topics, such as property maintenance, landscaping, noise levels, parking, architectural improvements, or usage. The enforcement of these rules, however, frequently results in conflicts between homeowners and their associations. Often, HOA members express concerns regarding the fairness and consistency of rule enforcement, such as in cases where they may feel that some members are being treated more leniently than others. They may also be concerned about whether the rules are too strict or not strict enough, and whether they are being enforced in a fair and consistent manner.
One way to address these concerns is to ensure that HOA rules and regulations are clear and easy to understand, with specific guidelines for enforcement. This can help to reduce confusion and prevent disputes between the HOA and its members. Additionally, HOAs should be consistent in their enforcement of the rules, treating all members equally and fairly.
Ultimately, while the goal is to have homeowners feel that the rules are being enforced in a way that benefits the community as a whole (i.e., that the association is acting in the best interests of all its members), all too often that is not the case.
NO. 3: MAINTENANCE AND REPAIRS
Homeowners rely on their HOAs to maintain and repair the association’s common areas. Many HOAs have common areas that consist of parks, pools, landscaping, and streets, while others may have some or all of those, plus additional ones (e.g., certain structural components, such as walls and roofs, that one might see in condominium associations). A common source of concern for HOA members relates to the timeliness and quality of maintenance and repairs, as well as the cost of such services.
Too many HOAs are guilty of dragging their feet when it comes to making necessary repairs to the common area—a problem made even more serious when the repairs directly affect a member’s home (e.g., a leak from a common area pipe causing damage to a member’s property). Even worse, many HOAs choose to remain secretive for as long as possible about the extent, scheduling, or cost of necessary repairs, perhaps believing that openness will expose them to liability. Ironically, it’s the opposite. And too often, even when HOAs do act, a good number of them do so by relying on unlicensed or unqualified “professionals.”
Well managed HOAs work hard to be transparent in their processes for maintaining and repairing common areas. These processes should, of course, not only include those that the law requires (e.g., annual inspections of certain components), but also common sense practices, such as a means of prioritizing repairs (e.g., fast track for emergencies, such as those involving water intrusion). Good HOAs also make it a practice to use reliable, licensed contractors and vendors to perform maintenance and repair work, and to provide regular updates on how HOA fees are being used to maintain and improve the community. This can help to build trust and ensure that homeowners feel they are getting good value for their money.
NO. 4: COMMUNICATION
If you’re like most homeowners living in an HOA, you want your HOA to communicate effectively and transparently with you. This includes providing regular updates on association activities, responding to inquiries in a timely manner, and ensuring that all members are aware of any changes or updates to the rules and regulations. Effective and transparent communication, therefore, is crucial to maintaining a positive relationship between homeowners and their HOAs.
Many HOA directors, however, do not share that sentiment. All too often individuals serving as HOA directors enjoy the power and prestige (usually fictional) that they believe comes with serving. And such individuals jealously guard their fiefdoms to prevent outsiders from interfering. This type of conduct does nothing but hamper open and transparent communications with the association’s membership.
HOAs that value openness and transparency work hard to ensure that all members have a say in important matters affecting the community. This can include things like soliciting feedback from homeowners before making major changes to the rules and regulations, or establishing responsive systems for addressing homeowner concerns (e.g., dedicated email address or telephone number that is monitored regularly).
NO. 5: BOARD ELECTIONS
Even though your HOA’s board of directors enjoys many of the same powers and responsibilities as any corporation’s board of directors, your HOA’s board consists of volunteers, most of whom have little or no experience running a corporation. The problem is that most HOA board members have no experience whatsoever running a business—especially one worth millions of dollars. Think about it. If your HOA is large (i.e., has lots of homes and common amenities), then it’s quite possible that your HOA has extremely valuable assets. This is especially true if, for example, your HOA has amenities like swimming pools, tennis courts, club houses, etc.
HOA elections, therefore, are very important—i.e., they have consequences. And it’s because they’re so important, the Davis-Stirling Act (the law governing HOAs in California) imposes a number of strict requirements regarding how they’re supposed to be run. Among those requirements are those aimed at ensuring that homeowners running for the board have the same opportunities to participate in the process as incumbents running for reelection.
An honest HOA will strictly adhere to their election rules (which is another thing that the Davis-Stirling Act requires all HOAs to have in writing) and the law, and remain completely transparent throughout the entire process.
Unfortunately, despite all the checks and balances required by California law, a lot of HOAs play fast and loose with board elections, including hiring insiders to act as inspectors, ignoring timing/notice requirements, refusing to hold an in-person and open meeting to count the ballots, etc.
CONCLUDING THOUGHT
Transparency and openness are two of the themes running through each of the five areas of concern that most often arise in disputes between homeowners and their HOAs. Well managed HOAs work hard to achieve such transparency and openness in all that they do so that their members always know where their HOAs stand when it comes to things like maintenance and repairs, elections, or enforcement of the rules. Such HOAs, however, are not nearly as common as one would hope. More often than you might like to admit, it’s the bad HOAs—the ones who do everything they can to avoid transparency and openness—that make life a living hell for their members.