Suing your HOA is suing yourself and your neighbors

In Florida... The fact that HO's will bear the cost of a/any law suit as you describe means the HOA LOST!

Therefore the suit was warranted by the plaintiff. Any cost(s) to the plaintiff as a result was deemed acceptable.

Due Process, Justice, while guaranteed under law is not FREE.

"Suing your HOA is suing yourself and your neighbors."

I don't disagree with this precept, but where I differ is with who pays the cost.

If you have good D&O insurance, the cost of providing the defense (paying for the attorney) and paying for the cost of any judgement is generally paid for by the insurance company. D&O insurance generally covers acts and omissions committed by the board as a group, and the directors and officers individually. There are some things that need to be noted though: 1.) The board has to have acted in good faith and not knowingly in violation of any law. This generally means seeking appropriate legal advice in advance in some cases. The choice of the defense attorney is made by the insurance company, and it may not be the association's attorney. Since the attorney is paid by the insurance company, the defense attorney works for the insurance company and not the HOA. Generally, the HOA will only pay a portion of the settlement if the amount of the settlement exceeds the limits of the D&O policy.

In practice, however, the insurance company will usually attempt to settle out of court, sometimes splitting the cost of the settlement between the insurance company and the HOA.

Unfortunately, the advice "Suing your HOA is suing yourself and your neighbors" often falls on deaf ears when a person is angry enough.

It would be nice. However, An Association is typically established to oversee a civil contract (your CC&Rs). If neither side is willing to listen to reason, the only other remedy in civil cases is the court system.

There is no oversight for proactive boards. The first thing mine does is send out a newsletter describing their side . That is their sword, tell half the story and scare as many of the flock as they can. Melissa should also added "Boards suing members is like suing themselves."

I really wish that board training and board membership were required for everyone who purchases a home in an association. So many problems could be avoided that way. All to often the membership pays for that lack of education and understanding.

What about just being "neighborly"?
When a new member joins an HOA why not have a board member invite them out for coffee and sit an go over the CC&R's with them?

There was a time back in the 1970's, during one of the moves my family did where I remember someone from the local chamber of commerce dropped by and delivered all sorts of essential information to us. Things like (at the time) the Civil Defense handbook (this was during the cold war with the quarterly warning siren tests). They also dropped off a list of local vendors (from carpet cleaning to painting and repairs) along with other stuff like the local Police and Fire numbers (this was before universal 9-1-1 service)..

So, I ask, what happened to society? where did this sense of being neighborly go?

We all know that the CC&R's (for a developer) are a sales tool. Yet, after a property is turned over, the real estate agents usually avoid mentioning anything about the CC&R's and I have had more than one real estate agent refuse to ask for the CC&R's for me to review prior to making an offer on a house (I walked away from both the agents and the HOA in those situations).

How many issues and problems would be avoided all together if people just walked new owners through the documents.

Currently, of my seven member board, there are at least two members who have not read the governing documents. We have one member who brings the documents to each board meeting because the other two (who have not read them) keeping talking out their asses and making stuff up as they go along. This has caused two prior board members to quit in disgust in the last year. Yes, members of the BoD have had arguments and near yelling matches at the open meetings with lots of insults and name calling. (Dysfunctional, you bet. Has calmed down since the last election, a bit.)

Serving on an HOA board is nothing more than a power trip for these two individuals. They have certainly operated in such a way that has deviated from the intent of the documents and they are doing things based on what their vision is for the association. We cannot get these two thrown off the board because of the level of apathy of the rest of the membership. I have not missed a meeting in years and I can tell you that out of 220 member homes, we only have twenty or less show up at any meeting. There is a small surge at the annual meeting when maybe 40-50 show up. This has gone on for so long that the board (long ago) stopped renting a facility that could seat all the members. They now hold the monthly meetings in a place that only has seating for 50 people. The apathy sucks!

The HOA attorney holds some training session for the new board members but has never told new members to make sure they have read the documents and understand them. This is the same legal expert who did the legal review of our "tree damage policy" which is in plain contradiction of the state laws regarding tree damage.

I firmly believe that just sitting down, and talking to a neighbor leads to a better neighborhood and a greater understanding of the documents and rules.

Yep...try sitting down with a "neighbor" after you send him a letter insulting his mailbox (a little too much rust perhaps) or anything else about his property.

Every insult to a homeowners property made by an HOA board member (who are always strangely immune to the "grass police" themselves)is like a slap in the face, it is a cumulative and corrosive force.

The spirit of community in HOA land is always slowely but inevitably destroyed.

Nothing more destructive than your attitude...That is all have to say about you.

When I bought a second home in FL (to be near the folks), our HOA person came over to introduce herself. We were very nice (yes we were believe it or not!)

We smiled alot and shook our heads at the right time. We told her we would certainly think about coming to the meetings ect.

When she left we laughed out loud!

You are a moron if you get too close to these people! Everyone in an HOA knows to keep their heads down and NEVER come to the attention of the HOA board.

We latter made friends with several other neighbors, mostly navy officers and their wives and they also laughed at the antics of the HOA board.

Except of course the African American guy (ATF agent) who lived 3 houses down the street. He was getting stacks of letters from the HOA about his brown grass.
His grass looked better than all of ours (the acceptable white folk in the community)

We sympathized with the poor guy, who was obviously on the recieving end of some vile bigoted HOA board member's action, and he could do nothing about the harrassment. Except of course MOVE which is what they wanted him to do.

Yes, the neighbors are most certainly on to what HOAs are REALLY all about when you come calling to "visit".

The corporation can be sued, and damages can be had.
Why doesn't the HOA understand this?
The Farrans HOA is now defunct, bankrupt because they thought they were above the law, or at least beyond its reach.
If your HOA has gone off the rails and harmed you...SUE!
If you are lucky, like the Farrans....you will sue it right out of existence.
Then MAYBE, your community will go back to operating as communities used to. With respect for all, and the nuts rendered harmless.

MikeR,

I respectfully disagree with you as well. I don't think all Boards in every HOA is wrong, corrupt, criminal or otherwise. That said, I do believe that everyone who runs for a board position has an agenda. Whether that is to preserve the HOA in the vision of what they bought into or even some that I have come across who want to change the HOA into something of their own vision. With this vision deviating from the developers intent.

I do not think people are morons for buying into an HOA but many people do buy in with their eyes "wide shut"

With that, I have no doubt that some boards may be evil but I have yet to see one set out with that mindset from the get go. I have seen a great board, morph over time into one that violates our governing documents as well as all sorts of laws. Yet, with a vote going one way and not another, we've managed to get two of the four bad board members removed in the last election (7 member board with 3 up for election in even years and 4 up for election in odd years).

I think many people just want to buy a home in a nice neighborhood, follow the rules, keep a low profile and just go along with their lives. No one wants to be a target.

I just think that if you are going to buy into a nice almost exclusive neighborhood, you have earned a little respect and the existing board should welcome you . It is in everyone's best interest to have new neighbors welcomed into the community. You want and hope they will maintain their property, that they will pay dues on time and follow all the governing documents.

What I don't get, is why the first message from the Board is so adversarial from the get go. That sort of attitude does not make one feel welcome.

For the past six years our Board president was nothing more than the neighborhood bully. Started out nice enough but over time as he went unchallenged with his decisions and had three other board members as his puppets, they ruled with an iron fist and bullied anybody they wanted to. Their tactic was to use fabricated violations (some not even in our CC&R's) to control people with an opposing view.

Do I hate the board as a result? No. The current board is trying in some ways to repair the damage done by him and his cronies. However, the current board is sick with the ailment all Corporations suffer from.... in other words they cannot and will not admit error or wrongdoing. This sort of thinking is dooming the current board to some level of untrustworthiness and is subjecting the board to hostile feelings.

There are some folks who are in wait and see mode, while others are trying to work with the board. It is hard to overcome some of the legacy thinking of the board. One factor is the HOA retained attorney who has instructed past boards and current board members in some of their thinking. He has been proven wrong in a few instances and now the prevailing thought of the majority of the board is to drop him and get a new attorney.

It does not have to be an us vs them situation. We are trying to achieve a nice friendly neighborhood once again.

Here is a question related to this thread that just crossed my mind.

If the HOA is involved in a lawsuit, will that effect the homeowners' ability to borrow money for mortgages? Either as part of the sale of a home or refinancing?

I hope that you or someone did more than just sympathize with the African American guy. There were people who sympathized with us, but would not stand up for us in public.

What was happening was illegal and it shouldn't matter if people liked us or not although it seemed that people didn't like us because we brought up legal liability (at which time people would roll their eyes).

We took our HOA to court and it will end up costing them money. However, if women and minorities had stopped protesting and filing civil lawsuits just because it was going to cost their communities money (since suing your city or state is essentially the same as suing yourself by the same logic applied here), women and minorities would still not have the vote.

If other people had not supported women and minorities, these injustices would not have been remedied.

"If the HOA is involved in a lawsuit, will that effect the homeowners' ability to borrow money for mortgages? Either as part of the sale of a home or refinancing?"

Yes ...pending lawsuits will affect everyones ability to refinance or get a mortgage. Lawsuits against an HOA or COA are a big "no no" for lenders because the outcome could be costly and could affect everyones finaces with anything from raised insurance rates,special assesments to larger HOA fees. Since owners pay all costs of the association a lawsuit can put the banks loan at risk.

Not everyone values money over all else. All I hear is it will cost this or that.

Not availing yourself of your rights under our justice system is also your right and option as is the opposite.

If you sue your HOA and win then yes there will be a cost to all. So who then is responsible for the added cost(s)? The opressor or opressee?

But then a lesson has been learned hasn't it? Not all lessons are free.

Melissa you are welcome to be a doormat and allow others to victimize you, deprive you of your rights, and continue their illegal actions but to suggest it is always and act of 'frutility' (sic) is absurd.

You continue to post the same stuff over and over.

Quantity over quality.

I started on the board because I was upset about something. Then I took the time to learn what it meant to be a board member and my viewpoint changed. Oh and getting my A#$ handed to me a couple of times certainly helped. I think a lot of us start out ignorant/uneducated and then learn differently. Most of us do care and just don't or can't fully understand the responsibility we have taken on. Some of us are just on power trips.

The type of loans you are mentioning are more commercial types. They don't always use the same information as other loan programs. Federally backed type loans like FHA does use a HUD form that works like a HOA appraisal. This has on it an area about lawsuit issues amongst other issues like rental ratios.

Freddie Mac and Fannie mae are now starting to use this information to. A purchaser or seller never sees this form as it is filled out by the HOA at closing. I have heard that more loan companies are going to use this form.

The result can be higher rates or denial.

FredO,
I have had the most experience with COA's as opposed to HOA's but Melissa is correct that more and more lenders are leaning toward using the FHA guidelines. This is also something that has become more important since 2008 when lenders started deciding that homeowner associations (especially COA's)were bad investments because of the shared finiancial risks, mostly because many were so badly run and under financed.
This is also true for insurance companies that insure mortgages for banks. Keep in mind that since the big bailout of banks and insurance companies in 2008 many are now under the control of the government.
Many people don't realize that banks and larger lenders sell most of their mortgages to a secondary market rather than hold onto the mortgage in their own portfolio. You guessed it ... Fannie Mae and Freddie Mac are two of the biggest secondary markets and they won't buy mortgages that don't fit their guidelines, which now are pretty much the same as the FHA guidelines.
The best thing to do is to make an appointment with your bank loan officer and talk to them about your particular situation and area. They are more than happy to talk to you about this.
Like most topics posted here there are many variables and every situation is different.As Melissa mentioned commercial properties fall under a whole different catagory and associations with large number of rentals fall into a different catagory as well.

LauraR
Don't let some of the cranks here disturb you too much. They generally are the ones who want the benifits of a homeowner's asociation but think they can do whatever they want regardless of whether it infringes on the rights of other owners. Generally they have been fined and have taken it to the extreme and lost the battle and are angry and bitter that they didn't get their own way.

I'm sure there are some bad boards but as you say it is up to the owners to take the necessary action and if they don't then they have no one to blame but themselves.

Laura:

Sadly you are dealing with limited human nature. You don't like something therefore the people responsible are the enemy. Very small minds at work.

I have always been amazed when people think they have the ability to run for a BOD position win, walk in and take right over as if there is nothing they can't learn on the fly. Arrogant at least.

Serving on the Board IF done properly requires time and effort and a desire to educate yourself. Some folks think they were just born with the natural ability to lead. I would watch these folks carefully.

Yes as I say we either all sink or swim together. We own on the same property! What's good for one is good for all most of the time.

I love when some idiots complain the Board is driving their property values down on purpose. WHY?????? Why would they wish to harm their own property????? Then you get the dumb look becuase they don't have an answer.

Several years ago we had a waitress ( approaching 50) who decided she should take a role on our Board. She was unhappy about the rules and how they affected his dughter's ability to use the common property as her playground. Well she mounted her campaign and made it known she wasn't looking to be a member but she was seeking the position as PRESIDENT. So lets set aside for now the fact she was unaware of the process most properties use in electing Board members and then having those Board members elect officers. In fact that was how it is done here.

So one night I guess this woman felt the need to come to my home. We had been discussing how to cover the costs of repairs to our pool. At that time other expenses made money tight. Well with her attitude and all she proceeded to explain to me her simple answer to our money problems.
All we had to do was contact the landlord ahd THEY would be required to cover all of these pool repair costs!

When I TRIED to explain to her the ownership of our property did not have a landlord she just shook her head in disbelief as if I were lying to her. 6 months of her deep hinking all went down the drain in a moment. But in her mind she was capable of being President of the Board.

Now thankfully she has moved on and just as an explanation I would like to add this woman took ownership of her property while having a relationship with a man 20 years her elder who had money. He wanted a place for his "girlfriend" to live about 1/2 mile from his home but had no desire to have her live with him. I understand why. In planning this arrangement he bought a unit updated it then sold it to her holding the mortgage. So each night he would "visit" have dinner and things worked fine for him.
She on the other hand took this to serve as proof she was an accomplished real estate savant. Truth be told she could not handle her own affairs (pun intended) and could never begin to handle the operations of a property.

As Dirty Harry said "A good man has to realize his limitations". Many folks who sit on the sidelines, never get involved all hold the opinion they or anyone else could handle this. Truth is on their best day impossible.

As a person who has served since 1987 let me offer this advice. No matter what you do, including you standing on your head and spitting out quarters, some people will NEVER be satisfied or happy. Just not in them.
Don't bother trying to be all to everyone. IMPOSSIBLE.

Someone running for the HOA board who thinks the landlord can solve all the issues takes the cake.

I am pretty sure I have seen it all now.

I am on the board to preserve/restore our property values. I have no intention of making our neighborhood less attractive. I think the fact that I am on here all the time, learning and absorbing what you all have to share from your experience and questioning our own process shows that I am interested in improving my community.

I knew it would be a thankless job, but I guess I just never realized how some people can be. I have seen all kinds, both here and in my community.

When I looked for a house last year, I looked at properties both in and out of associations. I still don't get why people choose homes in deed-restricted communities if they aren't interested in being good neighbors or don't like rules. (Although if you think your neighbors won't call codes on you if you don't have an HOA, you're probably going to be surprised...)

To say that suing the board is suing yourself is not a very helpful statement. Sometimes the only way to resolve a situation is to use the courts

The fact is that there many really incompetent and petty boards and the only way to reign them if a person is unable to get any help from their fellow homeowners is to use the courts. There are also many homeowners that think the rules are for everyone else but them. However, there are fines and liens to help them understand there is a price to pay for not living up to their obligations. Only when both sides have the same enforcement mechanisms, will there be no need for the courts.

I think that the laws spelled out in The Sterling Davis Act seem to be a helpful instrument in keeping things running smoothly in California although I have heard some opinions on how it can be fine tuned. However, only when both sides of a dispute are able to get a fair and impartial way of airing their differences will the courts be unnecessary.

When one cannot get help/support from others in the same situation is not the first questions they should ask themselves is: Does the problem exist/matter as in am I the only one that sees it or am I the wierd one that only sees it that way?

Funny thing is - the fines and liens only apply to the homeowners who are in violation. They are a great learning tool to reinforce the fact that there are consequences for violating rules. For owners only though!

I have to ask - what is the recourse for the owner when the Board (HOA) and Corporate entity that it is, violates the rules? It appears that the way the "system" is set up, there is no internal to the HOA accountability for this corporate entity known as an HOA and run by a Board of Directors.

The only fines an owner can levy on the HOA is through the courts. And for those, you have to actually prove damages.

Are there any real damages being done by a garbage can being out for an extra couple of hours? Or by a car parked on the street for a few hours? Who has that hurt or damaged? Yet the fine is levied by the corporation. The board can seemingly violate any rule and thumb their nose at you.

There are those who continue to issue the mantra that you can get a group together and vote them out or you can run for the board in the next election... maybe in their version of la la land it works that way. Not so in every HOA. And what is the real world? Well, the real world in terms of HOA's is that there are as many "worlds" out there as there are HOA's. Each one is uniquely different from all others.

Here in my little world - prior to me buying into it, the BoD at the time had gone on a spree of suing a bunch of owners for a whole host of really petty things. So much so that the local Superior Court chastised them and told them if they ever appear in the civil court again it will go badly for them. The HOA was told they are wasting the courts time.

This had the effect on the majority of owners to keep their heads down and make no waves. Just go along to get along and don't make yourself a target. This resulted in a series of bullies getting on the board and continuing the reign of converting the HOA away from the Developers intent into what they deemed the HOA should be. In this HOA it is not so much apathy as it is people just wanting to be left alone. We have a couple of people on the board who are actually decent and they manage the finances really well. The majority of the board (4 out of 7) are the bullies. Because the HOA continues to function (the lawns mowed, the streets and lights maintained), the friends of the board members getting variances and special treatment in an underhanded method of buying votes at election time - is how these bullies manage to stay on the board. The other three change at elections because they just get worn down by being marginalized by the bullies in every vote and meeting. We have a retired guy (owner) who is hired by the MC to be the on-site maintenance manager. he is the real workhorse making sure everything gets done that needs doing. he oversees the landscaping company and does a lot of work himself. he makes sure the MC pays the bills that need paying and it gets done.

Here in Calif, as I am sure you know, the Davis-Stirling is a very good thing. However, the thing it is missing is teeth. The Act does not grant us an enforcement Authority who can force the HOA to comply with the elements of the ACT. They leave it up to us individuals to take our HOA's to court.

My HOA Board (and lawyer and management Company) have all stated to me and to others here - "We don't have to follow it (DS) if we don't want to. Who's gonna make us?" As long as they issue the Dept of Corporations required Financial reports, there is no law enforcement that will intercede (it's on the Attorney generals website).

So what is left to do? What alternative is left given these circumstances? One could move I guess or one can stand up for their rights.