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The main function of a Homeowners’ Association (HOA) is to enforce a set of rules, policies and procedures, contained in a document called a Memorandum of Incorporation (MOI) or Constitution, that serve the best interests of a group of property owners. Many HOAs include common property, such as parks and roads, or what is known as common areas.
Who serves on Homeowners’ Associations?
HOAs are governed by a board of volunteer owners, known as trustees or directors, elected by the remaining owners at an Annual General Meeting.
The board holds regular meetings to enforce the standard rules and regulations, to establish a budget, authorise expenditures, collect levies, solve problems and oversee maintenance of the common property. The board acts in much the same way as a corporate board of directors, and many HOAs also utilise committees to help administer the association. For example, architectural control committees are commonly used to maintain architectural consistency in the community.
What kind of legal power do such associations have to enforce their rules?
The legal authority enabling an HOA to enforce its rules comes from the recorded MOI and is bound by the Companies Act 2008. Because the documents are recorded with the registrar, property owners are legally bound by the provisions in these documents when they purchase their property.
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HOA rules may also provide additional legal authority not contained in the HOA’s documents. HOA actions are usually upheld in court if authority is provided in the documents or by statute, and the board acts reasonably in carrying out the authority.
If I buy property in an area governed by a Homeowners’ Association, how will I know the rules?
The MOI and rules are recorded documents and potential buyers should obtain a current copy and read them before buying. These articles permit the HOA to make rules and regulations governing the conduct of the members and the use of the common property. The HOA should have copies of all current documents available for review. Often a copy can be obtained from the estate agent who sold the home.
Homeowners who disagree with a rule should address concerns to the board. Rules can be amended or revoked if they are unreasonable, unnecessary or simply unwanted by most owners. The amendment or revocation will require a member vote at an AGM or a properly constituted special general meeting. Voting requirements are usually found in the documents. If owners disagree with a rule and are unsuccessful in getting it amended or revoked after following the proper procedures within the HOA, the owners can always bring a legal action to declare the rule unenforceable. However, this could become very expensive.
What are some of the common problems faced by directors?
Rule creation and enforcement are areas of concern. Owners will need (and deserve) adequate notice of any alleged rule violation, including an opportunity to be heard, before any penalties are imposed. When owners fail to pay levies, the board often struggles to find the best way to get payment. When conducting meetings, it is recommended that the board use a guide like Robert’s Rules of Order. This will allow the orderly participation of HOA members and assist the board to reach decisions on important issues.
It is not uncommon for volunteer board members to have little experience in running an HOA. For this reason, it is important that all directors become familiar with the governing documents. While the documents often outline the steps necessary for proper action, some situations may require guidance from experts with greater experience. Most HOAs employ a management team to assist with administrative duties. Experienced attorneys also provide much-needed assistance in interpreting and amending documents, levy collection, internal dispute resolution and other complex issues.
Finally, and perhaps most importantly, harmony can be maintained by encouraging open communication and cooperation between owners and the board.
Our HOA states that tenants are not allowed pets- we took on tenants with 2 small dogs as market has been quiet and we were battling to find tenants- the HOA are now penalising us- is this constitutional on the grounds that we need to generate an income from this and the pets are not a nuicance and it is a freestanding house
what happens to a HOA if there is not enough willing trustees to act on its behalf?
what happens to a HOA if there are not enough willing trustees/members to act on the committee?
what happens to a HOA if there are not enough willing trustees/members to act on the committee?
Must the rules and governing documents be approved by CSOS? And in the event of the HOA being registered as a NPVC must the rules be registered with CIPC to be enforceable?
I am a levy paying homeowner in a complex. I attend the AGM meetings every year as I like to be kept in the link and vote on matters which concern my complex. I am shocked and disappointed that as I am writing this email, every last plant in the complex is being uprooted to be replaced by paving and pot plants. I contacted the manager and she stated that she and the chairman had decided to do this as it would save money on upkeep. I am extremely upset and thought that the owners had a say in matters such as this. Please advise.
where to find help if there is conflict with a director and he is rude
Good day, I need advice please . The trustees, together with a service provider that lives in the estate, wants to install “big brother” cameras throughout the estate. The service provider did not declare that he has a vested interest in the project and due to the fact that we had a spate of incidents, the trustees are really wanting to push this through. The prices are overinflated by over 1000%.
What action can I as a home owner take? Will appreciate any feedback.
Kind regards,
Goodday to all.
As owners in a HOA we would like to be copied on our email to the trustees wrt to a rule that we applied for approval. The Managing Agent who are also a trustees (all correspondence is sent to them to forward to the trustees) states we cannot be copied on our email to the trustees to protect their privacy wrt to their email address. Is this correct?. Please advise.
In the full title complex I stay in, the Constitution and House Rules are in contravention of each other, inter alia the ruling on pets:
Constitution: “Pets are allowed with the permission of the HOC”
Rules: “Only 1 small dog. No cats.”
Surely the Constitution takes precedence?
Can a tenant be a director and sit on the board of the HOA?
What if no founding documents or a valid constitution is not available. Ora certified copy of any documents cannot be presented by the home owners association.
For 25 years Mgwalana Home Owners Association Committee Members have opperated with a dormant Trust Deed and a copy if a draft that was never seen through to completion
Even the courts have not queried this confusion.
Can the HOA when preparing the minutes of the AGM publish letters of complaint or compliance violations of residents in the minutes .
Does the Privacy Law cover this aspect of information .
Rude and arrogant Directors are the norm in most complexes. These are clearly ,more often than not people who are on some sort of “power trip”.
Can a H O A enforce a new building regulation, even if it is not in the original framework, and differs to C T Council rules?
Our HOA Committee is not communication with Homeowners. We receive no minutes and expensive projects are going on without discussion with or approval by the Homeowners.
Our estate has only 8 houses and no other Homeowner is prepared to stand on the Committee as they are aging and have all had their turn on the Committee over the past years.
Could you please give some guidance from a Homeowners perspective?
Many thanks.
Hi, In our case the HOA Exco in what is believed decided on their own to adjust certain levies. Is it legal without the rest of the association members approval? When can such changes be made?
very clear and good article easy to understand. Thank you
Our HOA management has been charging me interest on arears for years now. The matter came about when i was paying old levy before the yearly increase and i was not receiving any invoices .I queried why they did not inform me as it was a debit order and they should have picked that up on their bank statements .They were sending sms`s ,attached letter of demands and calling even if i didn`t pick u the fone and charge a fee for that .They even went to the extent of trying to revoke may access to my property. I paid a little extra to offset the arrears when they started charging me but they kept on charging interest . Is there somewhere i can get this resolved ,is the legal?
Can the managing agent and HOA directors Indemnify themselves by Rules or MOI to be completely indemnified from Loss, Damage, Injury or liability within common areas, including any Defects, Act, Neglect by employees, workers on common property.
Thus, ignoring/sidestepping Fiduciary duty (acting in trust on behald of others), responsibility and accountability?
Thank you.
Regards.
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