This is the fifth in a series of postings providing a
detailed look at the governing documents for homeowners associations
(HOAs). Previous postings focused on the
association’s authority to levy assessments; this one expands to look at the association's powers
in general.
In
most communities, the association retains all rights except for those
explicitly granted to the homeowners - or ones that have been shifted by
government regulation and court decisions (such as allowing religious displays). Owner authority is primarily restricted to electing
Boards, approving amendments, and rejecting budgets.
Association authority is explicitly outlined in State statutes, Articles of Incorporation, and Declarations & Bylaws - with the last two of these having information peppered throughout both documents. What many people do not realize is that listing the powers in either the Declaration or Bylaws does not necessarily extend these over to the other document, as each document exists for a different function.
Under
the Bylaws, each person is a member of the Association, while under the
Declaration, each person is an Owner – the law treats these relationships as
two distinct areas of responsibilities.
Bylaws address internal rights and duties, while the Declaration deals
with external obligations.
When
comparing the wording between these two documents, it is important to confirm that wording in the
Declaration exists limiting Director Liability.
This protection may only appear in the Bylaws/Articles of
Incorporation! Have your attorney review
for this! Confirm you are acting within
the authority delineated in each of these documents.
For
example, consider the Association’s ability to take any actions necessary to
secure common area items from damage, even if this involves entry into private
homes. A typical situation is the inspection
of plumbing connections to reduce the potential for water breakages.
Unless
an emergency exists, the Association normally notifies the homeowner and
requires him/her to conduct the plumbing repairs. If the homeowner fails to do so, the
Association may have authority to conduct the work and bill the homeowner.
In
this situation, the Board needs to confirm it does have the ability to
authorize the entry of a third-party vendor into the home. It also needs to confirm that neither it nor
the vendor may be held liable for any damages that occur during the repair
process.
While
both of these abilities are very commonly listed, here are a couple of
amendments you should consider:
Home Access. What about the expense involved if you hire a
locksmith, or must kick-in the door?
Have your docs clarify that if the homeowner fails to provide access, he/she
assumes responsibility for any incidental expenses and repairs required to
permit entry by the Association.
Reducing Risk. Often the governing documents permit the
association to require basic homeowner maintenance, such as replacing water
lines or installing safety features, up to a fixed dollar amount. Typically this ranges between $200 and $500 per year. To keep up with inflation,
consider changing this cap to a fixed percentage of the annual assessments,
such as one-sixth of a homeowner’s dues.
Stay
tuned for further ideas on plugging holes in your governing documents!
Look for advice from businesses that relate to renovations and sale of homes. Realtors are a good example because they deal with homes regularly. As they work to find buyers, they will hire plumbers to put some properties in shape before they are due plumber near me.
ReplyDeleteAus-test Solutions was very patient, they was very good at email communication during the whole decision process as we had a lot of questions and a hard time deciding on re-piping or not, he even help me better understand the situation at hand, so I did re-piping the hot water line with very good price…
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