HOME OWNER'S ASSOCIATIONS (HOA'S)
Homeowners’ Associations (HOA’s) are essentially small private governments, with the right to assess taxes (dues and special assessments), enforce laws and impose fines (CC&Rs, Rules and Regulations), place liens on your property and even forcibly sell your property to satisfy such liens. While state laws control certain broad aspects of Homeowners Associations, the HOA’s bylaws, CC&Rs and rules and regulations constitute the primary “law” with which you must comply.
Bylaws, generally address the structure of the HOA’s governance, such as how many people are on the board of directors, the voting rights and procedures, and how to amend the bylaws or CC&Rs. One way to think of bylaws, is that they are the private “constitution” of the Association. Bylaws have certain minimum requirements under the law, such as describing the purpose of the corporation, and the number of directors, but may cover any other lawful topics, including the payment of dues and the right to impose special assessments on the members.
CC&Rs contain the primary law that you must follow. CC&RS are called equitable servitudes under the law and may restrict the use of the property in any manner that is not unreasonable. For example, the CC&Rs may delineate what portion of your property you have full control of (ie., interiors), and what portion of the property is the responsibility of the HOA. CC&Rs may control what kind of architectural changes may be made to your residence, what kind of landscaping you install, and whether you may keep pets (and what kinds of pets). CC&Rs should be read carefully to determine how much control you have over your property.
CC&Rs often include procedures that must be followed before a member of the HOA is fined, dues levied, or special assessments imposed. Such process must be fair and comply with procedural and substantive due process. Board members must exercise their authority in good faith, free from discrimination and favoritism. CC&Rs also often include grievance procedures which must be followed before a members of the HOA may sue each other for breach of the CC&Rs. (See also the Davis-Sterling Common Interest Development Act, Civ. Code section 1350 et. seq.)
Rules and Regulations are generally used in common interest developments (ie. condominiums). Rules and Regulations control the behavior of the residents, such as when certain resources may be used (ie. pool hours), when music may be played, what may be visibly displayed or where visitors may park. Rules and regulations cannot contradict the CC&Rs, but can address issues outside of the CC&Rs. The CC&Rs often incorporate the rules in regulations into the CC&Rs, which makes such rules and regulations specifically enforceable by the Board and other members of the HOA.
As scary as HOA’s sound, HOA’s are critically important to maintaining property values of the community. In fact, the board of the HOA has a fiduciary duty to act in the interest of the HOA, including the duty to prevent damage to property. (See e.g. Lamden v. La Jolla Shores Clubdominium Homeowners Assn., 21 Cal. 4th 249 (1999).) Most homeowners and condominium owners will have no problem following the rules laid out in the CC&Rs and rules and regulations, but it is important for you to understand the restrictions before you purchase your property. In addition, it is critically important to understand your rights if you have a conflict with either the Homeowners’ Association Board or one of the other members of the association.
The Law Office of Todd T. Cardiff has experience in both prosecuting and defending against HOA boards. Feel free to give Todd Cardiff a call to discuss how to protect your rights and your property values.