It is important to know that, if you purchase a property in a planned community or condominium, these restrictions and obligations are binding on you whether you want them or not. Membership, in other words, is mandatory. You may not want to be a member, but you cannot ignore the restrictions, refuse to honor the obligations, cancel your membership, or disassociate from the association. You also do not have to do anything to become a member. You earn the status of membership simply by signing the paperwork to buy your new home — whether you know about it or not! If the developer recorded certain documents, the law generally will impose knowledge of the association's existence on you even if you had no actual knowledge. “I didn’t know” is rarely, if ever, a good defense.
Covenants, Conditions & Restrictions (CC&Rs)
The terms and conditions of your membership are spelled out in the HOA’s governing documents. These governing documents generally include Articles of Incorporation, By-Laws, and a document known as a Declaration of Covenants, Conditions and Restrictions (or something similar). The CC&Rs generally spells out the regulations, restrictions, and obligations of membership but the HOA also often may try to adopt additional rules and regulations beyond those set forth in the CC&Rs.
Duty to Pay Assessments
So what are the privileges of membership? The most common is the obligation to pay a mandatory fee, or assessment, for the privilege of living in the community. Although the HOA often may maintain a pool or other common areas, your duty to pay assessments are usually not tied to the HOA’s maintenance. In other words, you owe it whether the HOA performs or not. The HOA’s failure to perform its obligations under the governing documents may give you the right to sue to enforce those obligations, but you generally do not have the right to withhold or refuse to pay assessments. Ths is true even if they let all the grass die and fill in the pool with dirt. Speak to a lawyer about your rights and remedies for the HOA’s nonfeasance, but continue to pay your assessments even under these unfair circumstances!
If you do not pay your assessments, the HOA may have the right to sue you to collect it or, in some cases, can even try to sell your home to recover the unpaid assessments! Once the HOA sues you, it becomes far costlier and more difficult to resolve. Generally, the risks of refusing to pay assessments are not worth it. If you have complaints about the conditions of the community, speak with a lawyer, talk to the board of directors, and work with your neighbors to create change. But we never recommend withholding your assessments.
If you have stopped making your payment, we recommend you immediately speak with a lawyer. Do not wait for the HOA to take action. Be proactive, not reactive.
Fines and Penalties
HOAs also may have the right in some cases to impose fees for the late payment of assessments and/or fines or penalties for violation of the HOA’s rules or regulations. The CC&Rs generally determine the HOA’s rights to impose fines and penalties. Although the HOA cannot foreclose for non-payment of a violation fine or penalty, and must either rely on voluntary payment or sue to recover it, you still do not want to ignore it. You have rights and remedies with respect to the imposition of any fines or penalties, including the right to a hearing, that you may lose if you do not exercise in a timely fashion.
Most people cannot believe that their HOA can sell their home. Many assume that they will be protected if they have a mortgage, are upside down in their loan, or for some other reason. When and under what circumstances an HOA can try to sell your home is governed by Arizona law. Although we believe that HOAs often misread or misapply the applicable statutes, the reality is that HOAs can and do sell people’s homes all the time. Sometimes those forced sales are unlawful but often they may be acting within the law, such as where a homeowner has failed to pay assessments for years. As a homeowner facing imminent foreclosure, time is not on your side. You need to take swift, decisive action to save your home.
Open Meeting Statutes
You have the right to participate in all board meetings of the HOA. The right to participate means nothing if you are not told when and where meetings take place or if the board members do not deliberate in public. Private discussions among board members outside of duly-noticed board meetings prevent members from participating and is prohibited under Arizona law. Your right to attend all meetings also extends to the right to participate: Board meetings “are open to all members of the association or any person designated by a member in writing as the member’s representative and all members or designated representatives so desiring shall be permitted to attend and speak at an appropriate time during the deliberations and proceedings.” This means that you have the right to be heard before any action is taken.
You also have the absolute right to record board meetings subject only to reasonable restrictions. We are aware of some boards that have tried to impose restrictions on audio or video recording by requiring a member to give advance notice or prohibiting more than one member from recording a particular meeting. We are also aware of boards that make it unnecessarily difficult for meetings to be records (e.g., requiring that any recording devices be set up fifteen minutes before the start of a meeting but then refusing to allow entry to the meeting area). In our opinion, these are not “reasonable” restrictions.
Design Review and Control
Before you paint your house, redo your landscaping, add a security door, or really do anything with your house, STOP! Have you looked at the governing documents? Do you need to get the HOA’s permission? What are your rights and responsibilties concerning architectural, landscaping, and design changes? How has the HOA or COA treated similar changes in the past? Are you being singled out?
It is far easier and less costly to answer all of these questions before you come head-to-head with the HOA over what you believed was an minor change and what they say is something that forever alters the aesthetics of the community and diminishes property values. That security door or new landscaping you wanted may be within your price eange, but not if you have to pay for it twice or spend the next nine months fighting in a lawsuit. You HOA may be acting within its rights or overstepping its bounds in refusing to let you proceed with the change.
If the issue ends up in court, the prevailing party likely will be awarded some, or all, of their attorneys’ fees and court costs.
Access to Records
Under Arizona law you have an almost absolute right, with just a few limited exceptions, to inspect the HOA’s books and records. This includes all financial and accounting records, meeting minutes, and votes. And, if you are willing to pay for them, you also have the right to request copies of any specific documents. Your HOA cannot refuse to provide you with access or charge you more than 15 cents per page for copies. Your HOA also cannot drag its feet in responding to your written request for documents. It must provide you access and copies within ten business days.
Knowledge is power. We cannot explain why many HOAs withhold information and documents from its members, delay responding to written requests, or simply refuse to respond to requests altogether. It makes no sense yet it happens all too often when someone has made a reasonable — or even unreasonable — request for documents that the HOA has simply ignored.
If you are forced to take your HOA to court, you may be entitled to recover your attorneys’ fees and court costs.
The extent to which an HOA seeks to regulate your daily life depends in large part on the HOA’s governing documents and the composition of the board of directors. Some try to restrict on-street parking or even in-driveway parking. Some seek to regulate the number, size and breed of pet you can own. Others try to impose strict timelines on when you must have your garbage and recycle can hidden away from view. Some even try to regulate your backyard and, in some cases, even the interior of your home. In many cases, HOAs overreach, overstep their bounds, or abuse their powers. They may act unreasonably, arbitrarily, or unlawfully. Your HOA is not above the law and can be held accountable. As experienced HOA attorneys, we will advise you regarding your HOA dispute, defend you against an HOA if it is acting unlawfully, and attempt to reach an outcome that accomplishes your objectives.
Do you belong to a homeowners association (“HOA”), condominium owner association ("COA"), or planned community (POA) ? If you do (or you think you might), check out some of our Do's and Don'ts below...