Back for more HOA Board fun!
Welcome back for Part III of our HOA Guide! In Part I and Part II, we talked about where HOAs come from, where they get their authority, and what some of their benefits and detriments are. Today (as our title may have suggested), we’ll discuss the scope of the HOA Board’s authority.
So what is that scope, anyway?
Every so often, we get a call here in the office from a disgruntled HOA member who has a beef with their neighborhood Board. Almost universally, the complaint takes one of two forms; either (i) the Board isn’t doing enough to protect the neighborhood, or (ii) it’s doing too much by micromanaging everyone’s ability to use and enjoy their own property.
Both of these are valid concerns. When the Board becomes lackadaisical and complacent, the neighborhood often gets out of control. People do whatever they want with their property, dues stop coming in, and the HOA’s ability to govern goes right out the window. On the other hand, it can be just as exasperating when the Board micromanages. One of the main tenets of property ownership in America is the ability to enjoy your property, to use your property as you see fit, and to exclude others from exerting their will over your property. As a result, it’s very common to see frustrated people coming in for advice after getting a violation notice for having the wrong type of mailbox, fence, or landscaping.
What it comes down to, really, is that an HOA Board is almost always a group of laypersons, coming from a lot of different walks of life, trying their best to manage a host of different (and often difficult) personalities in the neighborhood. While I’ve interacted with a bevy of strict and unpleasant Board members in my career, I’m yet to meet one who was clearly motivated by any kind of actual nefarious intent. It can be tough to see sometimes, but every Board member I’ve ever met really did have their neighborhood’s best interests at heart.
With this in mind, it is of the utmost importance for HOA members to know the difference between what the Board can do, and what it can’t.
What the Board can do.
Assess dues, fines, and penalties. One of the main reasons why the HOA exists is to provide maintenance for common areas, landscaping, and amenities like pools or tennis courts. Many of the better-equipped HOAs are even set up to organize fun community events! As a result, practically every set of Declarations that you’ll see is going to provide for HOA members to pay regular dues. Collecting those dues is a major function of the Board, and when the dues aren’t paid, or when violations occur, the Board is also vested with the authority to assess fines and penalties in order to compel compliance. When a member’s account gets into serious arrears, the Board can even institute foreclosure proceedings.
Enforce architectural guidelines. Another very important role of the HOA is to make sure that folks in the neighborhood aren’t getting too crazy with their home improvement and renovation projects. See, for example, our Finding Nemo fan from Installment I of this series. As a result, your average set of Declarations is going to require homeowners to apply to the Board (or an architectural review committee thereof) before making any major changes to their home or lot. This requirement ensures that all homes are up to the same standards, preserving aesthetics, and thereby property values, in the community.
Administer the HOA budget. Running a neighborhood doesn’t come cheap. Landscaping, paving, pool maintenance, etc., all cost money, and a good chunk of it. In order to operate effectively, it’s important for the HOA to set (and follow!) an annual budget that sets forth exactly how much is going to be spent on each expense. Administering that budget falls to the Board. Many sets of Declarations do, however, provide that homeowners can review the budget and some other financials upon request.
What the Board can’t do.
Unilaterally amend the Declarations. This may seem like a no-brainer, but the Board isn’t allowed to make amendments to the Declarations without meeting some very stringent requirements. The Planned Community Act requires HOAs to get approval for amendments by a two-thirds majority, not just of attendance at a meeting, but of the entire neighborhood. It’s hard enough to get two-thirds of the neighborhood to vote on anything, much less voting yes on oft-unpopular amendments, so you can probably imagine that Declaration amendments are pretty rare. Legal amendments are, at least.
Selectively enforce Declarations. One of the more common disputes between homeowners and their Boards arises when the Board enforces certain requirements against some members, but not others. For example, let’s say your HOA’s Declarations prohibit wrought iron fencing. There are a dozen homes in your neighborhood that have wrought iron fences, so you figure the Board isn’t enforcing the requirement and you go ahead and build your own fence. That makes it pretty confusing when you get a violation notice from the Board. Remember that HOA Boards can get themselves in hot water by selectively enforcing their Declarations. Oftentimes, though, Boards will get around this by enforcing only the violations that are “reported” to them.
Usurp local authorities. Keep in mind that the HOA really only has jurisdiction over members’ private lots and the common areas. When you get into things like powerlines, sewers, and public roadways, though, you’re straying outside of the HOA’s scope of authority. When you think about it, the Board’s jurisdiction is really quite limited.
The takeaway here is that the HOA Board is very useful for a couple of things. It isn’t a fix-all, but it can keep the neighborhood running smoothly and, when run well, it can definitely keep the property values up.