Understanding the law is no easy endeavor, especially if you’re an HOA board member busy volunteering to help the Association function properly. If we’re really being honest, who has the desire or time to spend trying to learn and interpret the law, especially when it comes to important issues in your homeowners association?
That’s where a manager can help; but it's also important for board members to be educated and informed about the basics – important issues that often require knowing the law and why they should have resources available to consult.
1. Take appropriate action when rules are violated
Every homeowners association has to deal with common issues that often require knowledge of the law, such as:
Assessments – When it comes to fees, you must know what the collection policy is. The law is very clear about what steps to follow. For example: the fees are due on the 1st, late on the 15th, and a late fee will be required after that. If the fees are 30 days late, a letter is sent; after 60 days, a registered letter is sent; then it’s off to collections. If all else fails the Association has the power to pursue the foreclosure process if the assessments aren’t paid. The board is the only entity that can make this decision.
Doing something without approval – If a homeowner does something that requires board approval – like painting their house purple – a letter is sent letting them know they have violated the rules and will be invited to the Design Review Board to explain their situation. Hopefully a plan of action will be agreed upon to solve the issue. If the homeowner ignores the letter, then an attorney should get involved and will send a registered letter. If the issue is taken so far to be before a judge, and the HOA board has done everything correctly by law, it doesn’t have to worry.
Served with a lawsuit – Anytime the Association is served with a lawsuit, the board should go straight to an attorney.
2. Abide by the law
As a board member, if you don’t know the law then you don’t know how to follow the law. This opens up the Association to the possibility of a personal lawsuit. If that happens, then the directors and officers liability insurance goes away.
Tip: Any time you’re a member of an HOA board – or any board for that matter – it’s important to ask the question, “Are we covered?”
3. Do their job better
In reality, many board members just want to come to meetings. They don’t necessarily want to spend their time being educated. They want to do the right thing, but they are volunteers and don’t have the time or desire to understand the law. This is where a good working relationship with an HOA manager who understands the law can help.
4. Know when to seek guidance
The HOA board can look to the manager for guidance, knowing they have knowledge about the laws that apply to the homeowners association. However, just because the manager knows the laws, doesn’t make them a lawyer. It’s a fine line because they are always advising people and there's a tension between advising and practicing. The manager will often consult with a lawyer and keep him informed on issues to protect the association. For example, The Hignell Companies has relationships with law firms. They don’t represent Hignell, they represent the homeowners associations that Hignell manages.
The law is complicated and requires professional understanding. As an HOA board member it’s important for you to focus on the issues in your homeowners association, and have a trusted manager and lawyer you can look to for guidance when you’re faced with crucial issues in your community.