Are There Different Levels of Legality in HOAs? If So, How Does One Cope?

Are There Different Levels of Legality in HOAs? If So, How Does One Cope?

There are different levels of legality, and unfortunately, too much overall acceptance of illegality and immorality in the leaders and persons with the most influence in this country.  This attitude filters down. We see this every day at the highest level of government in our country, in the biggest sports scenes, in big business. The boundaries of acceptance have been pushed and pulled nearly to oblivion and only the most egregious of conduct becomes subject of real reproach and redress. And of course it takes someone standing up and declaring “I’m not going to take it anymore!”

It seems that in large part, this malleability in legality is because of greed, ego, or apathy. In the HOA setting, it can get out of hand because of ego, but more likely it is because of disinterest, or a lack of determination on the part of the dissatisfied owner to do something about it, to run for office, to spend some time researching solutions, to act in a pragmatic way. And because everyone is in a hurry, all most have time to do is complain about the situation.

So dare I say “Put up or shut up?”

Homeowners who come to me for help generally fall into one of these categories of mental condition: outrage, victim, entitlement, or grace with an eagerness to listen and learn. Naturally, this last group is the easiest to work with, because they listen.

There are leaders who make mistakes (negligence in legal terms), and if they can be educated, and thus enticed to change course, it is usually an offense that could be forgiven. So I often suggest educating them and in order to do that, you need to educate yourself!

If the leaders know what they’re doing is wrong, but do it anyway, we are now moving along the spectrum from gross negligence toward intentional acting. In the law, intentional bad or wrong acts are generally more legally actionable, but it depends a lot on whether these actions cause loss or distress to others. This is because no one in a place of power or influence will sink their teeth into the problem. It will be hard to get the attention needed for redress by a concerned group of owners or in court.  And unfortunately, a good case presented poorly is often not taken seriously. We can see at the highest levels of politics, sports, and business in this country, that although bad acts are not always forgiven, they seem to be quickly forgotten.  Sometimes it is simply because the “bad actor” can get the job done. Sometimes it is simply greed. In the HOA setting it is often about something else – ego and power, self-interest, or simply frustration. The frustration comes from no one else stepping up to do the job.

An even more egregious level of illegality or immorality involves leaders who intentionally do things they know are wrong, and then try to hide them, or push back when called on their behavior in an offensive “back-off-or-else” threatening way.  If such acts are occurring, it should become sufficiently evident to get the attention of some audience, either others in the association, or a hearing officer or judge if brought into the right setting. This I have heard referred to as “six o’clock newsworthy”, meaning basically it is bad enough to get the attention of a judge or anyone else with a stake in the outcome, like other owners. What can be done in these cases? Presentation of a viable case is the key to open the door to accountability. A person coming from a place of victim, entitlement, or outrage has a harder time accepting that a pragmatic course might be necessary to get to the point where a “viable case” can be established for presentation to anyone who has influence to change the situation. A person of grace listens more perceptively and just gets there faster. And people who become the squeaky wheel often get the grease, if the squeakiness is backed up by real facts and evidence rather than offensive noise. If you want to read about a situation where a director could be held individually responsible for all or a part of an HOA’s losses on contracts, take a look at the E-news edition on my website at www.californiacondoguru.com in the archives from a few months ago covering the Palm Villas II v. Parth case and its effects. That case stands for the proposition that board members acting badly and unilaterally could be held liable for their acts. There is also a Florida case where developer representatives were found culpable for large damage payouts and punitive damages for their egregious acts. Just Google “The Shores of Panama” case which chronicles what can happen when the directors serve the wrong master (the developer instead of the HOA).

And of course, there is outright criminal behavior.  Criminal behavior can be taken directly to legal authorities or criminal or discrimination lawyers and if there is a sufficient basis to believe a crime has been committed, proper attention should be available and the acts carry potentially serious ramifications. In 99.9% of the situations that come before me crying out for solutions claiming a board is engaging in criminal behavior, there is no evidence of a crime, although an owner coming from the place of victim or outrage might be argue about that with me.

More often, if there is criminality or harassment or discriminatory conduct it is due to an individual on the Board or residing in the community that is inciting the behavior, if there is a crime or constitutional violation, and when there is evidence of such activity that may cause harm, (or be discriminatory especially because of a new federal mandate in 2016), boards should not turn their backs without investigation and reasonable response. Certain attention must be given to do what is reasonable and responsible to warn, or address the problem or parties involved. It is important to get good experienced legal help in these situations, whether you are on a Board or are an owner. Again, as in all cases, the possibility of achieving accountability or redress comes from being able to present a good, cogent case, backed with real evidence to the powers that be-those that have influence, such as a board, a judge, or a hearing officer, not from being the screamer.

In an HOA, much like in government, big business, and professional sports, a lot of people tend to overlook inappropriate, negligent, and grossly negligent, sometimes even belligerent behavior, because they don’t want to get involved. And Heaven Forbid in the HOA, most do not want the job of volunteer leadership! So most who are unhappy just criticize from a distance, through one or all of the 3 F’s: to friends, to family, and on Facebook. Some even criticize to the Board directly, but don’t do any followup or take steps geared toward engendering accountability. Most owners simply do not know how or what to do. So they grouse until they become tagged as a “disgruntled owner”, and then they might as well be speaking in mute.

Perhaps taking a look at what is happening in California will help people understand what is possible. For years, the legislature has adopted more and more laws to deal with reported shortcomings in HOAs, making what they believe are improvements in the law that will enable homeowners and board members to understand their rights and obligations. Progress is being made. But it’s not a perfect world yet, and good legal advice can help you chart a course that has more of a chance of success than squawking.

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