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Subject: What's Your HOA Law Wish List?
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SleepyC
(New Mexico)

Posts:8


04/16/2017 11:26 AM  
Hello,

Some of us are creating a list of provisions we'd like for our state's homeowners association act.

If anyone has ever wished for a particular law on the books in their states, we would be grateful to hear from you.

We try, but we can't think of everything!

For example, we'd like it to be legal for homeowners to fly one reasonable-sized American flag in good repair. Some states
have this is their HOA laws, but our state does not. So HOAs can ban flying the American flag.

Thank you in advance.



GenoS
(Florida)

Posts:1691


04/16/2017 1:27 PM  
I can appreciate your interest in compiling such a list. People in all sorts of internet forums are more than happy to take part in wish list construction on any topic imaginable. Unless you've got the ear of a state lawmaker or politician who has agreed to work with you with regard to legislation or some other actionable and constructive initiative, however, I respectfully suggest that "wish lists" are a waste of time. Online petitions are also a waste of time, in my opinion, but very popular nevertheless.

On a constructive note the Davis-Stirling website is probably your best place to start. It's geared toward California but contains a lot of common-sense wisdom. Have a look at their index of topics and go down the list one by one to find items of interest you think might serve you better than whatever it is you currently have. You won't find a better list anywhere.
TimB4
(Virginia)

Posts:14948


04/16/2017 1:56 PM  
Common sense laws vs. overbearing vs. feel good laws are always best.

Take a look at VA HOA statutes - I find them fairly reasonable protecting both sides.

http://law.lis.virginia.gov/vacode/title55/chapter26/


Overbearing laws are those where small self governed Associations find financially difficult or time consuming to implement.

Feel good laws are laws that actually do nothing but makes one feel good.
Example being FL requirement for Directors to sign a statement that they read the governing docs.
Nothing happens if they don't sign. Nothing says they understood what they have read. It's simply an exercise in paperwork.


The main law I would want to see is the requirement for the seller (via the Association) provide a copy of all governing documents, six months of Board meeting minutes, draft of last annual meeting minutes and copy of current financials to prospective buyers (those who have signed a contract) with a right of the buyer to cancel with no penalty if they find something they don't like. VA has this and gives the buyer 3 days. I think it should be 5 (more time to read and ask questions).

The second law I would want to see is the requirement for the Association to provide a statement to any architectural violations on the property AND for the Association to be bound by that statement. Again, VA has this.
TimB4
(Virginia)

Posts:14948


04/16/2017 1:59 PM  
Posted By SleepyC on 04/16/2017 11:26 AM

For example, we'd like it to be legal for homeowners to fly one reasonable-sized American flag in good repair.




OK. So it's a good idea to have a 50 foot flag pole the front yard of my town home to fly this reasonable (which you didn't define) flag on?


Keep in mind that laws have to apply to all types of developments, not just single family homes sitting on 1/3 acre or more.



AugustinD


Posts:617


04/16/2017 2:48 PM  
I would like my state's HOA law to establish a commission to settle disputes over violations of the governing documents, at a flat fee of $500 per complaint, with the adjudication including who will pay the fee. Appeal to the appropriate state or municipal court is possible. Commissioners will be HOA attorneys donating pro bono time and will sneer at any party who even breathes "appeal," in the same way judges have sneered at these attorneys for years for not keeping their HOA clients' problems out of the court
MelissaP1
(Alabama)

Posts:6846


04/16/2017 4:01 PM  
The only law I would like to see is that ALL states make it the seller's responsibility to provide the HOA's CC&R's, Articles of Incorporation, ACC, and/or by-laws. If all of those documents exist. Now the other details of the HOA like financials should be on the HOA to provide.

There are those situations where there is no "Seller" like a short sale/foreclosure. Which can complicate who then has to provide this information. However, think there should be notification attached that the property is in a HOA during any type sale in a HOA.

As for the "Flag Pole"... My opinion is that we ALL fly under the SAME flag. Having a flag does not make you more "Patriotic". I don't think a flag should be in everyone's yard. There are many rules on how to fly a flag properly. (Have to have a light on the flag if flying at night or take it in every evening...). So who is going to enforce proper flag flying? IF it's not the HOA, then who?

Former HOA President
SheliaH
(Indiana)

Posts:1992


04/16/2017 5:41 PM  
Lots of good ideas here, but first, a correction.

There IS a federal law on flying the flag - the Freedom to Display the American Flag Act of 2005 prohibits HOAs from restricting a homeowner from displaying a flag. It CAN reasonably restrict the time, place and manner of the flag display if they exist to protect a substandard interest of the association (e.g. flying a flag so large it creates a traffic hazard.

(Yes, I know some will fight over what’s reasonable, but that’s a conversation for another day.)

I’ve always been a huge advocate of telling prospective home buyers of the existence of a HOA before they buy, so I love Tim’s idea on providing prospective buyers a copy of the governing documents, current budget, board meeting minutes, etc., as well as Melissa’s suggestion that it be the seller’s responsibility to provide this information.

Disclosure should also include the banks – thanks to the financial meltdown, they know or should know there are a lot of homes in HOAs. It may take some digging to find out which one (starting with the current owner would be good if they weren’t so damned lazy). They certainly find out when a title search reveals the HOA lien. As a former Board treasurer, I got sick and tired of the association left out when everyone gets to walk away with a little cash.

That’s also why I would love banks to escrow HOA assessments just like they do property taxes and PMI. I know the Consumer Financial Protection Bureau has established rules requiring mortgages to reflect all the costs of the home purchase including HOA fees (don’t understand why Congress hates the CFPB and want to kill it, given what happened with the real estate meltdown, but that’s another conversation for another day too.)

And let's have an affordable alternative dispute resolution program that can settle a lot of arguments without everyone running to court. Make the costs reasonable and split it between both sides. It could be a joint venture between the state consumer protection division (whoever runs that) and a local law school (good experience for the students). Better yet, it could be a form of a program our BBB had some years ago - don't know if it still exists, but they ran a volunteer arbitration program where ordinary citizens could mediate disputes between consumers and member companies.

A final word on flags – homeowners and HOA boards would prevent a lot of drama if they simply went to the American Legion website - https://www.legion.org/flag and look at what it says regarding proper procedure (flying the flag in bad weather, when to fly it at half-staff, etc.) From there, the boards could set rules everyone can live with and homeowners could look at that first BEFORE running to the TV station about how unpatriotic the Board is.
JeffT2
(Iowa)

Posts:348


04/16/2017 6:31 PM  
I recommend you look at the Uniform Common Interest Ownership Act. The laws in this act are well thought out and were drafted by the highly respected Uniform Law Commission for adoption into state law. Your work has already been done for you.

You can also consider a related law such as Common Interest Owners Bill of Rights, which was adopted into law by Kansas.

For what it's worth the Community Associations Institute (CAI) recommends these laws.
JanetB2
(Colorado)

Posts:3735


04/16/2017 8:12 PM  
Posted By JeffT2 on 04/16/2017 6:31 PM
I recommend you look at the Uniform Common Interest Ownership Act. The laws in this act are well thought out and were drafted by the highly respected Uniform Law Commission for adoption into state law. Your work has already been done for you.


AMEN ... The UCIOA for HOA's does a good job of protecting all various entities from Developer, to Homeowner, and Secured Creditors. It makes all attempts to be equal and fair.

My state requires documents to be given to buyers ... but I wish ALL states REQUIRED.

I wish all states better controlled developers. Developers can choose anything under the sun they want to initially place in governing documents and what they want to build ... essentially the sky is the limit. However, after they make their choice they need to abide by their choice and not as in some states go fishing for Consumers to buy their product and then turn around and essentially later defraud both the Consumer and Secured Creditors who have spent or lend large sums of money for what was initially promised. Sorry ... that is wrong!
BobD4
(up north)

Posts:904


04/16/2017 8:24 PM  
Posted By SleepyC Some of us are creating a list of provisions we'd like for our state's homeowners association act. . .



Good suggestions above.

A credibly drafted legislated mechanism to try to force proven preliminary attempts to trigger ADR ( alternative dispute resolution ) before 'Owner v Association' or 'Owner v Owner' can file for a court ordered outcome.

Due to ignorance, cheap-skatedness of disputants & legislative mis-drafting, my jurisdiction botched this court-decongesting hurdle in 1998. ( No it's not perfect ).

Now its being forced to create a partially taxpayer-funded organization with duties that include resolving minor condo act disputes.
JanetB2
(Colorado)

Posts:3735


04/16/2017 9:08 PM  
Thought of another wish ...

Wish all states similar to NV implemented laws whereby the HOA who does not own the street cannot regulate and try to fine owners.

Potentially in most states if you look at the State definition for "Common Interest Community" or similar it will state as for example CO:

"Common Interest Community" means real estate described in a declaration with respect to which a person, by virtue of such person's ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a declaration. Ownership of a unit does not include holding a leasehold interest in a unit of less than forty years, including renewal options. The period of the leasehold interest, including renewal options is measured from the date the initial term commences.

Nevada said essentially wait a minute ... if the streets are owned and maintained by the Local Government where do the HOA's get off fining and foreclosing on homes when they are regulating property they do not own and are NOT obligated via their HOA Assessments to pay for maintaining and improving. Now in NV if the HOA does not own and pay assessments to maintain streets they cannot regulate.
TimB4
(Virginia)

Posts:14948


04/17/2017 3:26 AM  
There is both good and bad in the UCIOA (as there is both good and bad in most State laws).

PitA


Posts:0


04/17/2017 6:20 AM  
.....OK. So it's a good idea to have a 50 foot flag pole the front yard of my town home to fly this reasonable (which you didn't define) flag on?.....


The building code in all 50 states would prohibit such a pole.

look them up and see ...............

'fall' length to roadway

wind load

etc.

COST of such pole

etc.
AllisonD
(Florida)

Posts:446


04/21/2017 5:47 PM  
I wish mortgages would incorporate the HOA fees in an escrow account like they do property and school taxes. I realize that would only work on folks who still have mortgages, but I wonder how many folks who do not hold a mortgage anymore do not pay their dues?
RichardP13
(California)

Posts:2099


04/21/2017 8:05 PM  
Posted By AllisonD on 04/21/2017 5:47 PM
I wish mortgages would incorporate the HOA fees in an escrow account like they do property and school taxes. I realize that would only work on folks who still have mortgages, but I wonder how many folks who do not hold a mortgage anymore do not pay their dues?



We considered doing that back in 2005 while I was at Countrywide Financial. Problem is many HOA's assessment are monthly, which would't work. In addition, who was going to inform all the servicers when a specific HOA raised their dues. In 2005, my HOA had 42 different servicers of loans. What if gthere was a change of management company. Change of Board members, change of Treasurers, etc., etc.
TimB4
(Virginia)

Posts:14948


04/22/2017 8:07 AM  
Posted By RichardP13 on 04/21/2017 8:05 PM

What if gthere was a change of management company. Change of Board members, change of Treasurers, etc., etc.




change of lender (i.e. note sold)
RichardP13
(California)

Posts:2099


04/22/2017 10:07 AM  
Lender would have been the one originated the loan in the first place. Loans are serviced (Servicers) for the investor who owns the Note.
AllisonD
(Florida)

Posts:446


04/22/2017 2:08 PM  
How do they set up the property/school taxes accounts? Those change yearly so someone locally is informing them via an invoice. I would bet in order to insure dues are paid, HOA's could send invoices to the lending bank as well as the homeowner. I don't care if dues are paid yearly, so long as they are paid in advance.
RichardP13
(California)

Posts:2099


04/22/2017 2:35 PM  
The servicer's escrow department is tied in to each of the counties (parishes in LA). Each property has a unique APN. When taxes go up, escrow account will be short. Same with insurance. When that haeppens, at the beginning of the year, escrow will send the borrower a updated escrow statement.

HOA dues WILL NEVER be impounded through a escrow account.
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