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HOAs Should Not Selectively Enforce Their Governing Documents

Thursday, September 24, 2015   (0 Comments)
Posted by: Larry Szabo
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The directors of a homeowners association (“Association”) are responsible for interpreting and enforcing of the Association’s governing documents. There are generally no clear cut guidelines that specify when an Association must take action to enforce the provisions of its governing documents against homeowners and the frequency of enforcement actions typically varies from community to community. However, when there are issues that relate to matters that could affect the health and safety of others, the Association’s directors have a duty to take appropriate action. When such issues are not involved, an Association has more discretion about undertaking enforcement procedures against homeowners.

Court decisions concerning disputes over an Association’s ability to enforce its governing documents have held that: (i) the Association must act reasonably; (ii) the Association must exercise its power in a fair and nondiscriminatory manner; (iii) the Association must refrain from pursuing enforcement actions in an arbitrary or capricious manner; and (iv) an Association’s board of directors has discretion in connection with enforcement proceedings and does not have a legal duty to enforce each and every violation of its governing documents.

Associations that do not properly enforce their governing documents in a consistent manner run a risk that they will lose their ability to enforce them when they elect to do so. In such a situation, when an Association takes action against a homeowner in an effort to enforce the Association’s governing documents, the homeowner may defend the action by contending that the Association is acting in bad faith and is selectively enforcing its governing documents by seeking enforcement against the homeowner when it has not do so for other homeowners. If that is the case, a court could find that the Association has, by its conduct, waived the right to enforce the provision in question. Thus, if the Association’s board of directors elects not to enforce certain rules in one situation, it must be prepared to allow other homeowners in similar situations to disregard the same rules.

In order to protect against issues involving claims of arbitrary enforcement of governing documents or favoritism, Associations should implement policies and procedures that inform homeowners of when and why it may elect to refrain from enforcement proceedings. Exposing the issues to discussion in an open session meeting of the board of directors where the directors express legitimate reasons for not enforcing particular provisions of governing documents that are based upon sound business judgment will provide a layer of protection for the Association in dealing with potential future claims of selective enforcement. Ultimately, the manner in which an Association approaches the enforcement of its governing documents is critical. Associations must understand that a failure to timely, uniformly and consistently enforce its governing documents could subject the Association to defenses by offending homeowners that could preclude enforcement in the both the case at issue as well as in future cases.