How To Successfully Manage Your Home Owners' Association
Tips Every HOA Should Know

Running a Home Owners’ Association can be a complex and difficult task. You will have questions about what you can and cannot legally do. You need answers so you can live up to your fiduciary duties under the law. 

 

We wrote this Free Legal Consumer Guide so you can easily discover the answers to your legal questions. You should be informed, and know your options, before you make decisions. Read this guide, then call us for a consultation.

 

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This guide provides answers to some of the most common questions raised by HOA Boards of Directors. If you are on the Board of Directors of your HOA, you will have to make a lot of decisions. Knowing the “right” way to handle situations (to minimize legal consequences to the HOA) is crucial to effective and efficient HOA management.

Get a Free Consultation – We do offer a free consultation for members of an HOA board. We do charge for a consultation if you are a homeowner and not a member of management.

Our Best Advice – This guide contains general information about Maryland law. It does not apply in any other state. Simply reading this guide does not create an attorney-client relationship, and does not turn you into a lawyer (thank goodness!). If you have a serious legal issue about your HOA, you should get personal advice from an attorney who understands the unique facts of your situation. That is the best advice we can ever give you.

Your responsibilities as a member of the Board of Directors are outlined in the “bylaws” of your HOA. Generally, HOAs have anywhere between 3-5 members and must be in “good standing” with the HOA (no active violations of the covenants and no outstanding HOA fees). Depending upon the size of your community, the Board of Directors will assist the officers (often the same individuals) in managing the community (publishing newsletters, collecting HOA fees, holding monthly board meetings, issuing violations notices, etc.)

Or, it is possible that the current Board of Directors has delegated these responsibilities to a property management company, in which case, your job is to ensure that these things are being done in a timely manner. You may also be asked to make certain policy decisions and adopt additional rules/regulations based upon issues affecting the HOA.

Bonus: If your HOA Board of Directors needs help with understanding the HOA Bylaws or Covenants, we have attorneys that specialize as HOA management/consultants that can provide an “HOA 101” training course, instructing you on how to manage your new responsibilities and properly adopt additional rules/regulations that are fully enforceable. This HOA 101 course is specially tailored for your HOA Board (based upon a full review of the Bylaws and Covenants of your HOA).

The answer can be found in your HOA’s bylaws. However, as a general rule, the Board of Directors is the governing body of the HOA, which is elected by the general membership of the HOA (the entire community) at each annual meeting. The Board of Directors is responsible for maintenance in the common areas, establishing and collecting the HOA fees (dues), and to adopt other rules/regulations such as “Architectural Guidelines” or parking regulations. Depending upon the size of the community, the Board of Directors may oversee the duties of the property management company.

As a general rule, the Board of Directors has the authorization to elect (and replace) the officers of the HOA. Generally, HOAs have the following officers: president, vice-president, and secretary/treasurer. The duties of each officer are outlined in the bylaws. Here are some of the most common duties you will find there:

  • President – you will serve as the chief executive officer of the HOA and will preside over all Board meetings.
  • Vice-President – you may be called upon to assist the president (or preside over Board meetings in his/her absence). 
  • Secretary – you are responsible for taking the minutes (official notes) of all Board meetings and are required to assist in properly distributing meeting notices and maintaining the records of the HOA (oftentimes, with the help of a property management company).
  • Treasurer – you are responsible for maintaining the funds of the HOA (including providing a budget and an accounting of the funds received by the HOA thru the assessment of HOA fees/dues). 

Depending upon the size of the HOA, the offices of secretary and treasurer may be held by the same person.

Our attorneys have extensive experience in debt collection, bankruptcy, and foreclosure proceedings and how these affect an HOA’s ability to collect unpaid HOA fees. Together, we can create a strategy to collect the unpaid fees through legally-enforceable payment plans, and if that doesn’t work, we can file a lawsuit and place liens against the property to secure the payment.

Our firm uses deferred billing to help manage the costs of collection, which are chargeable against the delinquent homeowners and must be fully reimbursed by the homeowner in order to clear the debt.

You should carefully review the Covenants and Architectural Guidelines (including all amendments and supplements that may have been adopted after the original versions were written). If, after you’ve reviewed these documents, you determine that fences are prohibited (or perhaps the type of fence that was installed is prohibited), you may issue a “Notice of Covenants Violation” to the property owner.

The Covenants establish the method of enforcing the Covenants (in this case, a prohibition of fences). As a general rule, the Covenants require that the “Notice of Covenants Violation” be issued to the property owner, and if the property owner does not respond within the required time period (usually 15-30 days), the HOA has the authority to assess a fine for non-compliance. Oftentimes, this fine, if not immediately paid, can form the basis of a lien on the property.

Bonus: Our attorneys can help your Board of Directors review and interpret the Covenants and Architectural Guidelines to determine what types of improvements (such as fences, light poles, decks) are prohibited (or at least require prior approval from the HOA). We can also assist you in properly issuing a “Notice of Covenants Violation” to the property owner, and if additional legal action is warranted or required, we can help, too. 

Most Covenants require each property owner to properly maintain his/her home and yard. Failure to properly maintain the home/yard likely constitutes a “violation” of the Covenants. After sending a “Notice of Covenants Violation” to the property owner, an HOA may issue a fine for a violation of the Covenants.

If the violation is not rectified, the HOA may have the authority to “enter” the property to correct the violation (mow the lawn, secure a broken shutter or missing window, particularly in the case of an abandoned home). If the HOA “enters” the property and corrects the problem (repairs the broken window, mows the lawn), the HOA can file a lien against the property for collection of the money expended for the repair/maintenance. If you hire an attorney to assist you with this, the property owner is generally responsible for paying the legal costs (of the HOA) for filing the lien (or bringing a claim against the property owner in court).

Bonus:  Our law firm can assist the HOA with preparing and mailing these “Notices of Covenant Violations”. Our attorneys are experienced in determining whether a violation has been committed and what remedies are available. If liens must be placed on the property for non-payment of repairs/maintenance (necessitated by a property owner’s failure to maintain his home/yard), our attorneys can help with that, too. 

As established in the Declaration of Covenants, Conditions, and Restrictions (commonly referred to as the “Covenants”), each property owner is personally responsible for paying HOA fees/dues as assessed by the HOA. As a general rule, a person who has filed for bankruptcy may be exempt from paying past-due HOA fees (from the date of filing for bankruptcy). However, all HOA fees/dues assessed after the date of filing must be paid.

If the property owner has defaulted on his/her mortgage, the mortgage lender may be attempting to foreclose on the house (which may be vacant). Because the property owner is required to pay the HOA fees/dues as assessed (as set forth in the Covenants), the original property owner is still obligated to pay these HOA fees/dues. The mortgage lender is not obligated to pay these dues/fees until such time as a Court has “ratified” the foreclosure (thus transferring legal ownership of the home from the original owner/borrower to the mortgage lender). You can file a claim against the property owner and/or a lien against the property to collect unpaid HOA fees/dues.

Bonus: The attorneys in our bankruptcy and foreclosure departments work side-by-side with our HOA attorneys to advise HOAs as how to obtain unpaid HOA fees/dues. We can determine whether certain HOA fees/dues have been/will be discharged in bankruptcy. And, we can determine who owns the property (original owner/borrower or the mortgage company due to foreclosure) and who is obligated to pay the HOA fees/dues. We can also assist you in collecting unpaid HOA fees. Remember, the cost of collecting these fees can be charged to the property owner (and not paid by the HOA).

Architectural Guidelines must never contradict the requirements and/or prohibitions of the Declaration of Covenants, Conditions, and Restrictions (commonly referred to as the “Covenants.”) Therefore, if the Board of Directors wants to amend the Architectural Guidelines, proper care must be taken to ensure that any amendments to the Architectural Guidelines do not conflict with the Covenants. As a general rule, it is easier to amend the Architectural Guidelines (usually accomplished by a “Resolution” by the Board of Directors) than it is to amend the Covenants.

As a general rule, the Covenants can only be amended by a super-majority (three-fourths, 67 percent, or some other requirement) vote of all the members of the community (one home, one vote). The amendment itself must be approved according to the Covenants; more specifically, proper meeting notice must be sent out, a quorum must be in attendance, and the required number of votes must be cast in favor of the amendment. The amendment must be recorded among the County’s Land Records at the County Courthouse.

Bonus: If you need help in ensuring that your Board of Directors and/or general membership of the HOA properly amend the Architectural Guidelines and/or Covenants, our HOA attorneys that specialize in HOA management can guide you through this process. 

Having in-house counsel to advise you on the right way to manage your HOA can be invaluable. Board Members and Officers have certain legal obligations, which means serving as a board member is serious legal business. To protect yourself and your HOA, you should have a lawyer available who can answer your questions and assure you run your HOA in a safe, legal manner.

At the very least, every member of every HOA Board should attend “HOA 101”, hour two-hour “crash course” on the right way (and wrong ways) to manage your HOA. You need to know your legal obligations. You need to know your potential liabilities. And you need to know what your HOA’s governing documents say and how to use them appropriately.

Our firm offers a two-hour informal class (“HOA 101”) that is highly recommended for any HOA Board of Directors (and/or incoming officers). During your HOA 101 class, you will learn about the important aspects of managing your HOA and interpreting important provisions within your “Governing Documents” (based upon a thorough review of your HOA’s “Governing Documents”). You will also have an opportunity to ask any questions that you may have.

To learn more, feel free to contact Jessica Andritz via e-mail: Andritz@SouthernMarylandLaw.com, or call our office to schedule an appointment. 

I’ve been practicing law in Southern Maryland for over a decade now. I developed extensive experience in land use and zoning issues as I counseled clients (developers and builders) in obtaining the State and local approvals to create subdivisions of varying size (from large mixed-use, resort communities to smaller-scale family subdivisions). A significant part of the subdivision approval process is the creation of homeowner’s associations, which nearly all local jurisdictions require prior to approving subdivision plans. Why are HOAs necessary (from a regulatory standpoint)? There are lots of “common areas” such as parking lots, private roads, and recreational facilities that need to be maintained within the boundaries of a subdivision like an HOA. 

As years went by, I realized that I was uniquely poised to offer legal advice to HOAs because, after all, I was the person that created the HOA prior to the first home being constructed. And, from that idea came the development of our law firm’s HOA practice. Over the years, our firm has counseled dozens of HOAs in the Southern Maryland Area (Anne Arundel, Prince George’s, Charles, Calvert, and St. Mary’s Counties) from issues with HOA member participation, adopting policies and procedures that are legally enforceable in court, managing transitions after annual meetings, collecting past-due HOA fees, charging fines for covenant violations, and compliance with the Maryland HOA Act and other provisions of state law that affect HOA governance. 

Explore Your Options Today

Contact us today for a consultation so you can explore your options and get good advice. We can do consultations in person or by phone. You can even send us an email (see the contact us page for instructions). We will make it convenient for you. You should always know what your options are before you make any major decisions about a legal issue. 

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