When I see articles written by homeowners, I think to myself; “Here we go again - more bashing of homeowners’ associations!” As a professional community-association manager, I believe I know what many of the issues are. They are not “the association,” nor will they be resolved by legislative intervention, save for, perhaps, the licensing of managers. While I believe I understand the underlying issues and points of contention, neither myself nor anyone else can lay claim to having all the answers, some of which are very complex, and can be resolved only in a court of law. However, the preponderance of cases that find their way into the courts could have easily been resolved through communication and proper management of the association.
What is an “association?” Many people, even those who reside in one, mistakenly perceive that the association is some omnipotent outside entity, with unlimited funds, that somehow has gotten control of the community, much to its detriment. Homeowners often mistakenly refer to the association as “them,” whereas in fact, there is no “them.” There is only “us,” but many people have adopted an “us-versus-them” mentality. In fact, the association is all of the owners who purchased property within the bounds of a particular community. Those owners, by virtue of the fact that they chose to purchase that property, also agreed to form or to become part of an association of their fellow owners, who are bound by certain governing documents, which were written (usually by attorneys) long before approval for the development was given by the state, the city or the county, and before the first lot, residence or unit was sold. In fact, some of these documents were filed and/or recorded with an appropriate governmental agency, and can only be altered (and rightly so) through a lengthy, pre-ordained process.
Those documents are
1. The Articles of Incorporation. These were filed with the Secretary of State, and established the association as a not-for-profit corporation, which subjects it to certain pre-existing state laws governing such entities (such as the Non-Profit Corporation Act).
2. The Plat (or map). This was filed with the county and the city, and gives the property’s legal description, as well as the location and size of everything in the community.
3. The Bylaws. These deal with organizational and administrative aspects of the community, such as the authority and duties of the governing board, the operation of the association, meetings, voting rights, etc.
4. The Rules and Regulations. This contains a detailed explanation of what is and what is not allowed in the community. The Rules and Regulations are adopted by the executive board of the association under the authority granted to it by the other governing documents, and must be in accordance with the existing governing documents and state law.
5. The Declaration of Covenants, Conditions and Restrictions (aka “Declaration,” “Covenants,” “Decs and Covs,” “CCRs,” et al.) This is a binding and legal contract between the parties, which was recorded with the County Clerk and/or Recorder, which constitutes a deed restriction which runs with the land, and to which all owners have agreed to be bound voluntarily.
This last document is the one that seems to present the most problems, only because most owners choose not to read it or make any effort to understand it. When a person looks at a home in a covenant-controlled community, the licensed real-estate broker is required to point this out. Then, if that person signs a contract for the purchase of property, the contract has a provision for review of the covenants. If the prospective purchaser does not agree to the covenants, he or she has the opportunity to void the contract. Then, when a loan is made by a lender for any property in a covenant-controlled community, there is a rider attached (that the mortgagor signs) which states that there are covenants, and that the purchaser agrees to abide by those covenants. By virtue of their having been recorded, each association’s Declaration is a public document, which is available from the County Clerk and Recorder, and can often be obtained on-line. At closing, the purchaser(s) must sign a document agreeing to pay assessments when due and to follow the covenants, rules and regulations of the community. My question is: “How many-more chances does a person need in order to opt out of voluntarily joining an association of fellow owners that is covenant controlled?” I am waiting for someone to explain how enforcement of these covenants is a violation of “property rights” in this state and in this country. To put it bluntly: By buying property in a covenant-controlled community, a person agrees to join the association, to pay maintenance fees, and to follow the covenants. This is a matter of civil contract between two parties, and is not subject to legislative control.
The current mindset in this country is that, when something happens with which a person disagrees, somehow legislation should be passed to resolve that person’s problem. We already have too many laws, and our prisons are already overcrowded. We don’t need to create more micro-management through legislation, and we certainly don’t need to criminalize parties who violate a contract. That is the purpose of civil court.
Most states have a Common-Interest Ownership Act (or other similar condominium act), which mandatorily applies to most covenant-controlled communities. While these are good attempts to correct many of the problems that communities face, they have no enforcement provisions. It is up to an aggrieved party to enforce, through civil action, any alleged violation of the law. Most attorneys and judges are not savvy to the provisions of the law, and it is, sadly and many times, ignored or misinterpreted. This, however, is not the fault of the associations or their boards. It is important to note that condominium laws rarely create any rights that members did not already have, and that they still must take their grievances to civil courts.
Because it is a contract between parties, the Declaration is enforceable through civil action. The majority of the answers that aggrieved owners seek is right at their finger tips. If the association, through its board, does not abide by this contract, there is precisely the same recourse as there is through the state law for the redress of grievances: Civil suit. By the same token, the owners, too, must abide by the terms of the contract. And when they don’t, certain penalties apply, and the association can also pursue its claim(s) as provided in the governing documents, as well as through the judicial system. And the law allows the recovery of reasonable legal fees by the prevailing party. So what is so unfair about this, and what exactly needs to be legislated? Are we to mandate civility and neighborliness through legislation, right after patriotism? There would be no end to this!
The root of the issue is really two-fold: Bad board members and poor management. On this point, I do agree with many aggrieved owners. However, how does one legislate that a board member or a manager be “good?” That is a problem. Negative, antagonistic, and unknowledgeable homeowners only serve to compound it.
There are a myriad of examples of overzealous enforcement of covenants, rules, and regulations. On the other hand, there is nothing wrong with properly enforcing any of the association’s valid restrictions, and in collecting assessments. Indeed, that is precisely the reason why many people choose to purchase property in a covenant-controlled community. Whenever I see a bright-blue or a bubblegum-pink house, I say to myself: “And they wonder why we need to have covenants!” Thank goodness my association can stop such outrageous activity!
What the owners need to do is (1) familiarize themselves with their governing documents and with the state laws governing associations; (2) realize that they are the association; and (3) take back the power that is granted to them by their governing documents and by state laws. But what they are really asking is that someone else (from the government) step in and take up their battle. I submit that if the battle is important enough, they should take it up themselves! But, if an owner is clearly in violation, then he or she should submit to the authority of the association as exercised through its board. Of course, it would be easier to know and abide by the covenants, rules, and regulations before contemplating a violation. Many clear violations can be easily corrected. If the association does not allow lattice to be put up, and a person goes ahead and puts it up anyway, the association does have the authority to elicit compliance, following due process, including allowing the aggrieved owner to address the board at a hearing. If the board follows all legal processes and procedures, I have little sympathy for owners who then cry “foul!” Enforcement does not happen without the owner’s knowledge. But, of course, that doesn’t mean we have to hit them on the head with a baseball bat, or that we shouldn’t try to work with them. Board members and owners alike need to remember that they are all neighbors and part of the same association - team members, if you will. Infighting serves no valid purpose, and directors and managers need to treat owners in the same manner that they would like to be treated. Boards and homeowners should keep open all channels of communication.
Whose job is it to see that all this is done properly? The administrator of the association’s day-to-day activities is the Community Manager, who may be an on-site manager who works directly for the association, or who may be an employee of a management company. A good manager will advise the board and attempt to keep bad board members in check. (Of course, the responsibility to do this rests ultimately with all other board members, and the owners/voters.) A good manager will inform the board when it is veering off-course. A good manager will be fair, and will advocate for the right thing, without taking sides. A good manager will make sure that the board fulfills its fiduciary responsibilities by acting in the best interest of the entire association. A good manager will make sure that contracts, laws and documents are followed to the letter. A good manager can foresee and head off many potential problems before they end up in court or in the media. And a good manager uses common sense and communicates effectively.
Since the job of managing community associations is so vital, and since so many people live in covenant-controlled communities or homeowners’ associations, it would be good public policy to require some type of state licensing process for managers, but only if the process includes some type of hearing and enforcement provisions. Licensing by itself, or a string of initials following one’s name do not guarantee that a manager will be honest and ethical. They do not guarantee that a manager can handle explosive situations. They do not guarantee that the manager will not act outside of the law or outside of the authority granted by the governing documents. And manager licensing should not be tied to membership in any professional organization. Holding managers responsible and weeding out the bad ones through some type of due process would eventually eliminate those who are not knowledgeable or dedicated to their profession. Eventually, we would have a group of managers who are dedicated, knowledgeable, capable and honest, and who are compensated accordingly. That would solve a lot of our problems.