The Homeowners Associations play a crucial role in multiple residential communities across the states. It’s an organization in a subdivision, planned community, or condominium building. Its major responsibilities include maintaining neighborhood standards, enforcing rules for properties and residents, and managing shared amenities.
However, when buying or renting properties, many homeowners and tenants ask: Do homeowners associations have legal power? The simple answer is yes.
However, this power has its own scope and limits, which require a closer look. Let’s understand HOAs and their legal power below:
What is a Homeowners Association (HOA)?
A homeowner’s association is a private, mostly nonprofit group that was founded to oversee and control a neighborhood. You automatically join a HOA community when you purchase a home there, and you commit to following the rules of the HOA, which are intended to preserve property values and uphold a particular level of living in the area. Everyone who invests in property within a jurisdiction governed by an HOA becomes a member of it.
The Governing Documents
HOA’s authority lies in some of its important governing documents. These include:
Covenants, Conditions, and Restrictions (CC&R): These typically include the rules and restrictions that run with the land. They are recorded with the county and serve as a binding force for all members in the community.
Bylaws: These describe the HOA’s internal governance, including the election of the board and the procedures for holding meetings.
Rules and Regulations: Extra guidelines that the board has approved to address particular matters not addressed in the CC&Rs.
How Does A Homeowners Association Work?
Homeowners Associations or HOAs are formed usually within a community of single-family homes or multiple-unit buildings, such as condominiums or townhouses. These associations are formed to establish rules and regulations for managing properties within the particular jurisdiction.
Homeowners associations are made up of and managed by the members of the community. If a community has established an HOA board, membership becomes a criterion to buy a property there.
Typically, an HOA has a governor or board of directors. These organizations are chosen to monitor and enforce the HOA’s policies. A Declaration of Covenants, Conditions, and Restrictions (CC&Rs) is the document that an HOA usually uses to define its policies as restrictive covenants.
The Foundation of Legal Power For HOAs
The main source of HOAs’ legal authority is contract law. You sign a legally enforceable commitment to abide by the regulations of the community when you buy real estate in an HOA-governed neighborhood. As long as the rules don’t violate any state or federal laws, this agreement can be enforced in court.
State and Federal Oversight State Laws: The creation, administration, and dissolution of HOAs are governed by state statutes. These laws may also restrict or increase HOAs’ authority. For instance, although some governments limit the amount of fines or restrict foreclosure rights, others require due process before fines can be enforced.
Federal Laws: Homeowners associations are required to abide by federal laws, such as the Fair Housing Act, which forbids discriminatory regulations based on gender, race, religion, or other classes.
The Legal Power of HOAs
Now we come to the legal answer to the question: Do homeowners associations have legal power? Here are some of the commonly known legal powers of a Homeowners Association:
Enforcement of Rules and Regulations
One of the primary and significant responsibilities of HOAs is to enforce the rules within the community. These regulations support the community’s general well-being, preserve property values, foster a peaceful living environment, and uphold a particular level of look.
- Rules and regulations include regular inspections to ensure compliance with standards.
- Sending across violation notices. If any resident fails to conform to the given rules, they will receive a violation notice. The HOA notifies the resident, writing the details of the violation and a deadline to correct it.
- Listen to hearings and pleas. The HOA also gives residents a chance to present their side of the story and give justifications. This is to give them a chance to defend themselves or own up to their mistakes before they’re penalized.
Collecting Fees
Collecting assessments and fees is a major part of HOAs’ responsibilities. Here, the major role includes:
- Collecting the HOA fees to maintain and manage the community well.
- The HOAs establish guidelines for payments to ensure the timely collection of funds. Homeowners are given all the details about the due date, amount to be paid, and the method of payment. They are offered multiple modes of payment for convenience.
- HOAs can also enforce collection in case the residents fail to pay the fees. State legislation and the group’s governing documents specify the precise activities that a homeowners association may take. Lien placement on the member’s property is one such technique.
Having spoken to the power of collecting fees, the HOAs are subject to certain limitations and legal requirements, too. For example, HOAs have to comply with fair debt collection practices. Moreover, they are instructed to provide residents with a clear understanding of the details of the fees collected.
Imposing Fines and Penalties
The power to fine is one of the strong legal swords HOAs have at their disposal. They have the power for:
- Fines: Unauthorized house alterations, inappropriate landscaping, and prohibited paint colors are just a few of the infractions for which HOAs have the authority to impose fines. The most common one is non-payment of the HOA fees.
- Suspension of Privileges: Noncompliance may result in the suspension of access to clubhouses or swimming pools.
It’s important that HOAs follow the rules and ethical procedures for imposing fines. For example, the homeowner must be given a written notice regarding the violation and the fine fee. Moreover, the residents must be given a chance to defend themselves or present their side of the story. This guarantees fairness and transparency within the community.
Placing Liens and Foreclosing
- Liens: Before a home may be sold or refinanced, the HOA may impose a lien on it if a homeowner defaults on payments or penalties.
- Foreclosure: In severe circumstances, persistent nonpayment may result in foreclosure, which would give the HOA the right to seize the property.
If you thought that HOAs didn’t actually have any power, here are some of the most prominent legal ones. From the authority to enforce the rules and regulations to creating and modifying them, an HOA can put liberty or restrictions on the residents within the HOA community. And, to be able to buy a house in such a neighborhood, individual homeowners have to comply with the rules.
Areas That HOAs Can Regulate
Apart from all the enforceable legal powers of HOAs, they have greater powers than a homeowner can imagine. They have the authority to regulate the following areas:
- Exterior paint and color materials
- Landscaping designs and plant removal
- Outdoor designing or fencing
- Pet ownership
- Community pools
- Outdoor spaces like tennis courts or other play areas
- Use of amenities
- The common areas within the community
- Noise restrictions
- Nuisance regulation
- Signage
- Holiday decorations within the community
- Rentals and home businesses
Unenforceable Rules
Changes in the law may make certain HOA rules unenforceable. For instance, the Fair Housing Act has made covenants that formerly forbade sales to specific racial groups unlawful. In a similar vein, some jurisdictions forbid homeowners associations from prohibiting the installation of solar panels or other environmentally friendly measures.
Homeowners’ Rights and Protection
Homeowners have options despite the authority that HOAs have. Among the important rights are:
Right to Notice and Hearing: Homeowners often have the right to notice and a hearing prior to the imposition of fines or penalties.
Right to Access information: Minutes of meetings and financial information of the HOA are available for homeowners to view.
Voting Rights: Homeowners elect the board and have the ability to cast ballots on significant budget or rule changes.
Right to Contest acts: If homeowners feel the board has overreached itself or broken any governing documents, they have the right to contest HOA acts in court.
Finally, we hope you got your answer to ‘Do homeowners associations have legal power?’ Sometimes, living within an HOA community can feel restrictive and binding. But when you look at the broader picture, some homeowners find it necessary to ensure regulation within a community. They are also viewed as a property manager by some residents. The choice is yours on how you look at their duties and existence. What is important to remember is that even though HOAs have their share of legal powers, residents, too, have their rights and protections.
Now, if you’re still looking to buy a home or a condo in some of the common states with HOAs, like Austin, Texas, speak to a skilled real estate agent. They can guide you in choosing communities and neighborhoods with HOAs to make your life easier.
FAQs
Do Local Laws Override HOA Rules?
City ordinances are superseded by HOA rules. HOA communities are not allowed to impose bylaws, rules, or regulations on their members that are in conflict with municipal laws; instead, they must abide by the laws of the city.
Are HOAs Considered Local Government?
No, HOAs are not considered local government. Even though they hold some administrative function for a community, they cannot be called a local government.
Does One Have to Join the HOA To Buy A House?
It depends, to put it simply. If you purchase a house in a neighborhood without a required homeowners association, you are free to decline to join. However, you are required to join the HOA as part of the purchase agreement if the neighborhood has one.
