Homeowner’s Association (HOA) Issues

HOA Introduction

Every HOA has a group of volunteers who manage specific areas and properties. They create the HOA’s own covenants, conditions, and restrictions, otherwise knows as an HOA’s CC&R’s. These covenants, conditions, and restrictions include but are not limited to:

  • Landscaping and architecture (no fences higher than 8 feet)
  • Common responsibilities (fee schedules and fines for non-compliance)
  • Resident etiquette and behavior (child curfew)

On average, annual dues for an HOA are just under $400.00. That said, homes that were a part of an HOA are almost always found to be more valuable for a number of reasons including family-friendly and safe neighborhoods as well as support and trust from neighbors resulting in less worrisome households.

What Happens When You Dislike Your HOA’s Rules?

real estate attorney HOA cary Depending on the neighborhood, some board members are granted the ability to impose and express discontent on rules that they disagree with. On the other hand, some neighborhoods’ HOA boards do not allow such flexibility and are unwilling to compromise. If that is the case, it is recommended that you continue to pay your dues. HOAs are armed with wide legal powers. They’re able to regulate a plethora of activities and collect fines on several different things, many of which catch HOA members by surprise.

Keep in mind, if you do not respond to letters from property managers, collection agencies, or HOA boards themselves, you can be taken to small claims court or, in some circumstances, have a lien on a piece of your personal property filed against you.

Some issues can be dealt with and handled by making a simple and straightforward phone call, such as adding a budget for trash collection. If you would like to do something that would be considered ‘against the rules’, there are certain steps you can take to work toward permission including but not limited to:

  • Recommending a compromise regarding your request, such as playing loud music on holidays or during certain weekend hours as opposed to requesting permission to play loud music any time you wish
  • Create a detailed list and make a request for a variance, which would grant you the ability to be an exception of a rule that doesn’t sit well with you. After the variance request is complete, it is recommended that you have someone proofread it, preferably someone who has experience is proofing documents such as variance requests. Variance requests should always be formatted appropriately, which would be in HOA form. HOA formatting can typically be found in your CC&R’s documents.

What is the dissolution of a homeowner’s association?

The termination of an HOA can occur for several reasons including:

  • Poorly managed budget (excessive fees that members may not have agreed to pay)
  • Underenforced or over enforced covenants, conditions, and restrictions (CCRs)
  • Untruthful board activity (board members not following the rules as other members are)

Whether the reason is deemed valid or not, there is likely a procedure that needs to be followed in order to dissolve an HOA. Said procedures can be found in the HOA’s governing documents, or the laws of the state where that HOA is located. These documents are often referred to as ‘bylaws’ and ‘articles of incorporation’. They should clearly explain how an HOA can be dissolved and what the next steps would be after the dissolution takes place.

real estate lawyer in cary ncGoverning documents are not always straight-to-the-point and helpful. They can be worded passively, only explain how many votes it would take for dissolution to be approved, and often lack clear indicators of how an HOA can actually be dissolved.

If your HOA’s governing documents lack clarity and provide little guidance as to how dissolution can take place, contact your experienced real estate attorney before the situation at-hand becomes more complicated.

Do HOA bylaws need to be recorded?

Generally, if your bylaws blatantly state that their amendments need to be recorded in order to be effective, then it is recommended that you record them. If they do not state such a requirement, you are not required to record them.

What Do HOA Fees Pay For?

Generally speaking, HOA budgets are created in order to reflect upcoming debts such as administration management, landscaping, construction, and utilities. Along with that, reserve funds are set aside for future expenses such as new pavement, new mailboxes, new street lighting, additional or upgraded fencing, and other expenses of that nature. If you feel as though your money is being budgeted poorly or if you have zero say-so in where your money is being spent, contact The Doyle Law Offices today. We would love to hear you out and ensure you get the respect you deserve.

Sometimes, real property owners fall on hard times and they default on some type of a payment that’s owed on their property. Usually, the creditor can either take action to enforce and collect the debt, such as foreclosing on a lien, or the property owner and the creditor can make a deal to settle the matter, which is called a “workout.” Sometimes, a property owner has to declare bankruptcy.

All of these things can happen when the property is part of a homeowners’ association (HOA). And, anyone who’s a member of an HOA, should know how their HOA will react in such circumstances. Often, an HOA will be aggressive in collection actions when assessments and dues go unpaid because it’s simply not fair to other owners to shoulder the financial responsibility of a non-paying HOA member.

HOA Bankruptcy and Foreclosure

Bankruptcy laws are crafted to provide you with some relief from your outstanding debts. Regarding HOA’s there are two main types of bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy. If you file for Chapter 7 bankruptcy, either some or all of your personal assets are sold. The profit from those sold assets is used to pay your creditors to ensure your debt is erased and mitigated. On the other hand, if you file a Chapter 13 bankruptcy, you compose a plan to pay your creditor(s) off over an extended period of time. The period of time usually consists of 3-5 years but can be shorter or longer, depending on the circumstance.

In a case where you file for bankruptcy protection, an automatic stay comes into play. Automatic stays mean all debt collections and foreclosures against you are stopped. This includes an HOA’s attempt to collect their unpaid fees. It is recommended that you contact your real estate attorney as soon as possible to avoid further setbacks, fees, and inconveniences if your HOA has a lien against your property before you’ve had a chance to file for bankruptcy protection, if your HOA has placed a lien on your home for unpaid fees after the fees have been paid, if you feel as though your HOA is spending your shared budget inappropriately, or anything else you feel as though may be unfair or untruthful.

Contact Your Cary Real Estate Attorney Today

For 20+ years, real estate attorney Hank Doyle has been helping individuals, families and businesses in Cary and surrounding areas with their real estate law needs, including HOA issues.

Fill out the confidential form below or give us a call at (919) 228-4487 to discuss your real estate law representation.

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