Do You Need to Sue Your HOA?

Do You Need to Sue Your H…

Not Necessarily: Informed Georgia Homeowners Can Ensure the Accountability of Their HOA

You received a violation letter from your Homeowners' Association, asking you to repair your roof, and you are wondering whether the Board can actually lien your property if you do not promptly comply. Perhaps you are concerned about whether your HOA is maintaining the neighborhood’s pool and tennis courts to your standards. Maybe you are wondering exactly how your annual dues are spent each year. The Board of Directors of your HOA is charged with all of these matters, and more. How can you ensure the Board of your neighborhood is doing its job and doing it well? Do you need to sue your HOA to get it to properly carry out its duties?

There are several steps homeowners can take to arm themselves with knowledge of their HOA’s documents and procedures, and to evaluate whether their Board of Directors is effectively carrying out its responsibilities, or in need of redirection. Ideally, a lawsuit against your HOA will not be necessary if you are informed and engaged.

Georgia HOA Powers and Responsibilities

1) Understand that your community’s legal structure is a non-profit corporation, governed by Georgia non-profit corporate law.

Members of the Board of your HOA volunteer their time without compensation, and should be treated with respect for their efforts. However, Board members must treat the HOA as a corporation and act in its best interests, with the utmost good faith. The Board is bound by non-profit corporate laws which prohibit certain transactions that raise conflicts of interest. If you suspect that Board members engage in prohibited transactions, do your homework and collect proper evidence.

2) Familiarize yourself with the community’s governing documents.

First, there will be a declaration of covenants. This is the most important of the documents because it is treated as a contract between you and your HOA. Unlike typical contracts between two parties, however, the declaration is recorded in the county land records. This means that once you take title to your home, you are deemed to be on notice of all the provisions of the declaration, whether you have read them or not.

Second, find out whether any additional amendments to the declaration have been adopted. All such amendments which are recorded in the land records are binding. You will need to check the county land records for all currently recorded documents that govern your community. Do not rely on your HOA website for the most current governing documents.

Third, the community’s bylaws spell out many of the powers and duties of the Board, set forth provisions for the election of the Board members, and specify other important procedural rules. The bylaws are often, but not always, included as an attachment or exhibit to the declaration.

Finally, Boards frequently adopt other governing documents, such as design guidelines, which provide architectural controls, and other rules and regulations. Many homeowners assume that the governing documents are “boiler plate,” varying little from one community to the next. This is a misperception. While there are certain standard provisions within these governing documents, there are more variations than not. Each set of documents should be carefully tailored to the needs of your community.

3) Understand your property manager’s role is as an agent of the HOA Board.

Many Boards delegate some of their management duties to a property management company. Property managers must be professionally licensed. There are several prominent management companies in Georgia, and they routinely and competently handle issues such as identifying covenant violations and delinquent accounts, and issuing initial correspondence to homeowners, seeking compliance. They also field inquiries from homeowners, and manage contractors hired to work on common areas.

The precise scope of responsibility assigned to a property manager should be documented in a services contract between the Board and the management company. Keep in mind that the property manager usually acts as a legal agent for the Board. Therefore, the property manager should not take on any roles or responsibilities that the Board is not empowered to perform in the first place. If you believe your property manager has taken on roles or responsibilities outside of the intended scope of its employment, ask to review the contract itself.

4) Attend annual meetings.

The best way to stay informed about matters important to your Board is to attend all meetings that are open to you as a member of the HOA. Once you familiarize yourself with the governing documents, you will know your procedural rights concerning voting at these meetings. This includes voting on substantive matters occurring in the neighborhood, as well as voting on the election of officers and directors of the Board. You will also learn why and when the HOA might suspend the right to vote.

5) Ask to review the Board’s records.

The bylaws will typically specify that certain HOA records will be made available for in-person review upon request by any HOA member. The Board is legally required to make certain financial statements and meeting minutes available. Typically, you can review records covering a three-year period. In some communities, records covering a longer period of time may be made available. Other records may also be made available upon specific, well-formulated written request.

6) Finally, know who is on the Board, each member’s position, how long each has served, and when a Board member’s term expires.

Understanding how Board members are aligned internally on issues in dispute in your community is invaluable practical information. This is particularly relevant when your community faces a vote on a significant matter, such as an expensive renovation of common areas, an increase in annual dues, or an amendment to the governing documents.

Moreover, if you know when a Board position will be vacant or a new election will be held, you and a cohort of your like-minded neighbors may choose to run for Board positions, and achieve the changes you believe are in the HOA’s best interests.

In Sum: Stay Engaged and Hopefully the Need to Sue Your HOA Will Never Arise

No homeowner wants to spend time and money fighting an HOA. Ideally, your HOA's governing documents and actions will reflect the values of your community. Staying informed and involved can make all the difference.

If you have reached a point where you need assistance with an HOA dispute or litigation, I encourage you to contact an attorney who focuses on community association law on behalf of homeowners.

Julie Liberman is an Atlanta attorney and litigator with expertise in Georgia HOA law and practice