Know Before You Buy
Buying a condo is a great way to shift from renting to homeownership. Condos are popular, low-maintenance investments. But when community associations fail to function as they should, they set the stage for conflicts.
If you’re at odds with your homeowners’ association (HOA), you can sue. Once a court gets involved, the HOA can be compelled to follow state law — or the rules established by the association, which is a creature of state law.
Courts can decide who has the prevailing right: the unit owner, or the association. In rare cases, a court will strike down an HOA rule as unconstitutional or otherwise contrary to law.
Read on to learn about why people might sue, why they might not, and how most people who live in condos feel about their HOAs. Keep in mind that this overview is not legal advice, and not intended as a substitute for case-specific legal guidance. Everyone’s situation comes with its own set of facts. Outcomes depend on the interplay between the facts, the relevant HOA documents, and state law.
The Basic Idea: HOA Rules Benefit the Community as a Whole
Generally, a community association and its governing board act to protect owners’ peaceful enjoyment of their properties. Volunteer board members are entrusted with the budget and financial decisions. They make rules to conserve the community’s property values and promote harmony among the owners.
Each new unit owner who joins the community accepts its Covenants, Conditions, and Restrictions (CC&Rs), which the board enforces. For many multi-unit developments, CC&Rs affect everything from pool use to parking spaces to noise limits, and unit owners’ right to use their property for income.
Pro tip: Know your deed restrictions before you buy. Multi-unit properties limit what individuals can do with their units. Renting or using a property as a vacation space might be off-limits. There might be age restrictions. A declaration of Covenants, Conditions, and Restrictions is a public document; if you’re interested in any condo property, the CC&Rs are available to you in the office of the county recorder of deeds.
Buyers receive the CC&Rs for review before closing a purchase, but don’t always review them carefully. The trouble comes when the HOA suddenly takes enforcement action — or refuses to enforce rules when they ought to. It’s not unusual for the affected unit owners, at that point, to wonder about their legal options.
What to Look Out For: Common Conflicts Arising for Condo Properties
In the interest of maintaining a consistent aesthetic, condo boards may regulate anything visible from outside: curtains and front doors, decorations and gardens, lights and bikes, waste and recycling canisters, and the sizes of HVAC units. Rules on pets vary and contain exceptions. Cars have to be registered. Units have occupancy and use limitations. Boards can change their rules, raise their monthly fees, and impose special assessments without much advance notice. Depending on state law, boards may not even have to hold open meetings.
So, a great many scenarios can turn into points of contention. Some of those things can be easily ironed out. Some can’t.
Maybe board-approved work in another unit has affected the value or physical structure of yours. Maybe the maintenance team has damaged your unit. Maybe the board has made faulty landscaping or infrastructure decisions. The management might have created or neglected physical hazards, contributing to an injury or compromising property values. The board could have condoned harassment or illegal conduct. Or maybe you have received a fine, or a revocation of privileges to use the common areas, and it’s just not sitting right with you.
In these or similar situations, it’s best to read the rules carefully. Look for amendments. If you still disagree with the board’s conduct, as a unit owner you may take the matter up with the board. You’ll likely be allotted time at a board meeting to contest the board action or inaction. Otherwise, you might need to set up a special appointment to make your case for a reversal or exception.
To Sue or Not to Sue: Why a Lawsuit Is a Last Resort
Unit owners rightly expect their condo boards to benefit and protect the community and individual unit owners. A condo board should:
- Respect all pertinent laws, including fair housing laws and free speech laws. Be sure all rules and restrictions comply with applicable laws.
- Enforce its rules consistently and fairly, without spotty enforcement or singling out some residents but not others.
- Oversee the property management. Vet contractors’ licensing and insurance. Provide proper maintenance of the common areas and any interior work the maintenance team may be assigned to handle.
- Respect a unit owner’s prerogative under state and federal laws, where applicable, to install eco-friendly systems, such as solar panels or rainwater collection containers.
- Permit condo residents’ use of reception devices pursuant to the Over the Air Reception Devices Rule.
- Prioritize safety and security.
- Follow best financial practices. Keep a healthy reserve fund for large improvements and emergencies.
If you believe the HOA is not carrying out its duties, check state law, as the HOA might have to offer mediation. As a last resort, you might decide to put the unit up for sale, sue the HOA, or both.
Why do most owners treat a lawsuit as a last resort?
- First, because of the money that would be spent by both sides. Unit owners collectively pay the fees that the association would spend to defend itself in court.
- Plus, once a suit has been filed, any owner — including an owner who sues — could have some trouble selling. This is because the buyer’s loan underwriter may not agree to issue a loan involving a condo property subject to a court action.
- Moreover, as board members are also unit owners, legal action pits owners against owners, and the resentment is sure to linger for a long time.
All that said, if you have a major dispute and your HOA is out of line, you certainly can take legal action. Consult with an attorney experienced in local condo matters to start.
A lawsuit against a condo association is usually a state action. It is brought in the county where the property exists. If you believe the HOA has broken a federal law, learn how to file a complaint at the website of the Office of Fair Housing and Equal Opportunity.
The condo documents supplied to each homeowner may contain important information about mediation, attorney’s fees, and other legal provisions.
The Good News: Most Condo Owners Are Satisfied
Community associations now account for 77 percent of new housing. The rising number of condo owners suggest that many people are comfortable with HOAs. Well over 70 million U.S. homeowners have opted into HOA communities. And, according to the Foundation for Community Association Research, most residents appreciate the efforts of their HOA boards.
Opting into a condo association is a great way to buy property, join a community, and build home equity. Yet it’s wise to take some time to research a community and its rules before you close the deal.
Supporting References
Deeds.com: Homeowners’ Associations: An HOA Board’s Effect on Your Property (Jul. 22, 2020).
NowackHoward, LLC, Community Association Attorney: Georgia HOA & Community Association Law Resources — The Four Crucial Duties of Condo Board Members, as Told by Condominium Lawyers.
REALTOR® Magazine: Record Number of Homeowners Live in HOA Communities (Sep. 23, 2020; citing the Foundation for Community Association Research).
Photo credits: Ivan Samkov and Tobias Bjørkli, via Pexels.