When homeowners are unhappy with their HOA board
Homeowner and condo associations generate the highest number of inquiries to our “Dear Dinosaur” advice column. Month after month, we receive messages about HOA boards that appear to be unresponsive to homeowner members, dysfunctional, or otherwise incompetent. (To be fair, we also receive inquiries from board members about homeowners who are making life difficult for the board of directors.)
Basics
- In an HOA, all homeowners are automatically members of the association.
- Board directors are homeowners who volunteer their personal time and receive no discounts, perks, or payments for their services. The board is responsible for hiring a management company, making decisions about finances, approving invoices, approving contractor bids and budgets, holding regular meetings, etc.
- Most larger communities with HOAs pay a management company to run operations. The management company reports to the board and is responsible for annual audits, accounting, reserve studies, legal issues, finding vendors, resale certificates, mailings, etc. If the HOA is small and has no management company, the board of directors is a “working board” and takes on day-to-day operations—a heavy burden for volunteers to carry.
Homeowner associations navigate tough terrain, as most owners are deeply committed to their homes and protective of their investment. The stakes are high. This adds a significant emotional dimension to the relationship between owners and board directors.
Many HOA board members have no previous board experience, and little or no knowledge about how to lead a nonprofit organization. They are often learning on the job, and some may not be prepared for the weight of the legal, fiduciary, and moral responsibility that they carry as directors. They may also have inherited less-than-optimal habits and methods from previous boards.
What can you do if you, as a homeowner, are unhappy with your HOA board?
Determine what kind of organization you belong to
The first step is to find out just exactly what kind of organization you belong to. There are many types of HOAs, governed by different laws and regulations. Jim Slaughter, distinguished attorney and parliamentarian, defines it this way:
A “community association” is a residential development in which the owner is bound to membership in an organization by a set of governing documents that require adherence to a set of rules and, often, the payment of assessments. Membership in the community association is automatic upon purchase of a dwelling. Community associations are not voluntary.
You may live in a condominium, or in a planned community, and your homeowners association may be incorporated as a nonprofit organization. Definitions vary according to state law, and you must know the law and regulations that apply to you specifically.
Read state law pertaining to your organization
Research the state law for your organization, remembering that in some instances, states have adopted laws in a given year and exempted organizations that were established prior to the law’s being put in place. So the year of formation is important too.
Read your governing documents
You should have been given copies of your governing documents when you bought your property and became a homeowner. If not, the management should make them available to you on request. You will want to read your CC&Rs (covenants, conditions, and restrictions), sometimes called a “declaration;” your articles of incorporation or charter; and your constitution and/or bylaws. (It is more common now to have only bylaws.) In particular, study the sections about:
- The bylaws—how they are adopted, how they can be amended (changed);
- The board of directors—how it is chosen, length of term, powers, when it meets;
- How to remove an officer from their position, or a director from the board;
- The homeowner members—what decisions they make, when they meet, whether they are entitled to attend board meetings;
- What parliamentary authority the association has adopted as a standard for its meetings. Robert’s Rules of Order Newly Revised, 12th edition, is the most common book to choose. In a few states, use of this book is mandated by state law.
A key question is whether owner members have any jurisdiction. In many states, the law gives the board of directors full responsibility for administering the association. The members have no say at all in making decisions.
In some HOAs, the members may attend board meetings, if state law or their own documents allow, but must sit in silence during the meetings. A wise board will establish a “member forum” to hear from owners, perhaps at the beginning of meetings or on a regular schedule.
Recall the three duties of board directors
Directors of your organization are owner volunteers who have a personal interest in the work of the organization, naturally, but who are bound by law and in conscience to serve the interests of the organization as a whole. Traditionally they have three duties:
- The duty of care—to exercise the due diligence that a reasonable person would use in considering the issues;
- The duty of loyalty—to put the interests of the association above their own personal interests; and
- The duty of obedience—to follow the rules embodied in association documents and board decisions and actions.
Review your situation and concerns
With these considerations in mind, narrow down what is bothering you. Has the board of directors violated state law? Is it failing to follow procedures? Are individual directors failing to observe their three duties? It’s important to be able to articulate what you think the problem is, as simply and unemotionally as possible.
Consult with experts
Once you are clear about your concerns, you may want to consult with an outside expert. An attorney can help you read the laws correctly. A parliamentarian can advise about bylaws and meeting procedure. The Community Associations Institute has a wealth of information available on its main site, and in its state branches. Jim Slaughter, mentioned above, provides an incredible array of resources both on his personal website, www.jimslaughter.com, and on the website of his company, Law Firm Carolinas.com.
Analyze the cause of the problem
How did the problem come about? Could it be that the board doesn’t understand how to apply the rules and procedures? Is this a legal matter? Could there be different interpretations of what is happening? Your analysis will affect what you decide to do.
Decide what action is appropriate
Consider bringing your concern privately to one board member’s attention. Ask them how they see the issue.
If they are non-responsive or dismissive, consider going to the chair or another board member, and ask them what they think.
If you still don’t get an adequate response, you can bring the matter to the full board’s attention, either at a member forum or by writing to all the board members.
The tone of your communications is important. Begin by assuming good intentions, and present your concerns clearly and non-judgmentally. Avoid the use of highly charged words like “illegal,” “immoral,” “outrageous,” etc.
No action by the board?
If you get no satisfaction from the board, you can try to interest other homeowner members in the issue. Circulate a petition or hold a member meeting. Some association bylaws provide for a special meeting to be called at the demand or petition of a certain number or percentage of the membership. Use whatever means make sense to develop community interest in the issue. Of course, all of this takes time, which is why your assessment of the issue is so important. You don’t want to sink a lot of effort into something that is relatively trivial, or where there seems to be no chance of making a difference.
Note that some states have laws protecting homeowner rights to distribute information freely to homeowners, and to use common areas without having to obtain permission.
Amend the bylaws?
It is common for the board of directors to have the right to amend bylaws. However, occasionally homeowner members themselves have this right. If this is the case, and you don’t like something in the bylaws, you could follow the procedure to have the homeowners vote to amend them. And note that if there is a difference of interpretation about the bylaws, it is the body that adopts and amends them (either the board of directors or the homeowner members as a whole) that has the right to interpret them.
Change the board
In many associations, the sole power of the members is to elect the directors. If you are really unhappy with the board, perhaps it’s time to select different directors. How you can do this will depend on your bylaws. Homeowners may have the power to remove a director from office, or perhaps they will have only the power to nominate a new person at the next election. One option is to run for the board, and become a board director yourself to try to change things from within.
Take it outside
If your efforts within the association are not successful, it may be time to take it outside. Here are some possible courses of action:
- Propose mediation to the board.
- Hire an attorney to write a letter to the board detailing the offense, and the probable consequences of ignoring your concerns.
- Consult with the Attorney General’s office or other authorities in your state.
- Publicize the issue by writing a letter to the editor of a local paper, posting on social media, or speaking with a reporter.
These efforts will vary in effectiveness, and their risk. And of course, if all else fails, you can file a lawsuit. Note that the courts will not be interested unless someone has been harmed. So think hard before pursuing this expensive option.
