Do All HOA Rules Have To Be Enforced?

Written by Posted On Wednesday, 18 July 2018 11:29
Do All HOA Rules Have To Be Enforced?

Question: I live in a condominium complex where there is no enforcement of the "house rules." I have noisy neighbors, neighbors with three cars (for their two-person, one-bedroom condo), neighbors who erect anything and everything on the common elements. The Board of the Association does not appear to be doing anything about these qualities of life violations. This lack of enforcement troubles me greatly. Does a Board have to enforce all the rules?

Answer: Serving as a member of a Board of Directors of a community association is, to say the least, a very difficult task. You are "damned if you do, and damned if you don't." All too often, competent, responsive Boards of Directors are faced with a difficult decision -- namely do we enforce our rules, or can we ignore some of the minor violations that occur within the community?

More importantly, many Boards of Directors do not have the resources to properly enforce all violations of the rules and regulations.

Almost every set of community association documents authorizes a Board of Directors to enforce their own documents. A Board can enforce in a number of ways.

First, the Board generally has the authority under the association Bylaws to take an errant unit owner to court. This is time consuming and expensive, and no one can predict with certainty what a court will do. Many courts throughout the country are now becoming concerned about enforcing relatively petty matters, especially if the alleged violation occurs within the confines of the unit, as compared to the common elements.

Second, the Board can establish a set of fines, and impose a fine against a unit owner for any violation of the community association documents. Many condominium state laws require, among other things, that a "due process hearing" procedure be established before a fine can be imposed. Under this process, the Board would advise a unit owner of its intention to impose a fine, and hold a hearing, giving the owner an opportunity to present his or her case as to why the fine should not be imposed. The unit owner should be entitled to fully participate at this hearing, and indeed bring his or her own lawyer. Interestingly, all that such laws require is that the condo owner be given the opportunity to attend the hearing. Even if the owner ignores and does not show up -- assuming the board has proof that proper notice of the hearing was provided - the board then has the ability to issue a fine.

The fine procedure is workable, since the fine would then become part of the unit owner's financial obligations to the association. If the errant owner does not pay the fine, the association would have the right to go to court seeking a money judgment against that owner, and in most cases (depending on the documents themselves) all or a portion of the association's attorney's fees could also be awarded.

A major dilemma facing many Boards today is whether they really have to enforce all of the rules and regulations. The current trend in the law is that a Board of Directors can ignore certain violations, if the Board acts reasonably and in good faith which legally is referred to as "the business judgment rule". The Board should consult its members and its counsel, and have a full debate and discussion in open session as to why the Board believes certain violations should be ignored. If, after going through this process, the Board makes such a decision, the Board may be insulated from liability if a unit owner files suit against that Board for failure to enforce the association documents.

Courts have often held that even if the board makes a mistake, unless it is a serious matter or violates public policy, the court will not second-guess the board.

Clearly, there are some rules and regulations which a Board has to enforce. For example, if an owner is creating a life-threatening problem which impacts on the health and safety of other unit owners, the Board has an obligation to enforce those infractions, even if it necessitates spending legal fees to accomplish this objective. On the other hand, there are numerous violations which the courts have considered "petty." In my opinion, a Board does not have to enforce every single rule and regulation, merely because they are on the books of the association. But, the Board does have an obligation to advise the owners why the Board is refraining from its enforcement activities. Presumably, if enough owners disagree with the Board's decision, they can attempt to mount a recall petition, whereby the current Board would be thrown out of office -- or not elected at the next annual meeting.

But a Board of Directors is cautioned they cannot enforce the rules and regulations in an arbitrary or capricious manner. They cannot be selective. If they are not going to enforce a particular rule, this non-enforcement has to be across-the-board. Conversely, if the Board is going to enforce its documents, the enforcement has to be fair and even and levied against every owner who is in violation.

The Board can also repeal certain rules and regulations, by holding a hearing and then taking a vote in accordance with the applicable state laws and the association's legal documents.

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Benny L Kass

Author of the weekly Housing Counsel column with The Washington Post for nearly 30 years, Benny Kass is the senior partner with the Washington, DC law firm of KASS LEGAL GROUP, PLLC and a specialist in such real estate legal areas as commercial and residential financing, closings, foreclosures and workouts.

Mr. Kass is a Charter Member of the College of Community Association Attorneys, and has written extensively about community association issues. In addition, he is a life member of the National Conference of Commissioners on Uniform State Laws. In this capacity, he has been involved in the development of almost all of the Commission’s real estate laws, including the Uniform Common Interest Ownership Act which has been adopted in many states.

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