Home owners’ associations (“HOA”) require certain and specific governing documents. As a resident in an HOA, you are entitled to access to these documents. Understanding them can help you realize not only your obligations but your protections.
Most states have laws that govern the formation of home owner’s associations. Kansas has the Uniform Common Interest Owners Bill of Rights. It is contained at K.S.A. 58-4601 – 58-4623.
One of the first and most important documents to understand is the Declarations of Covenants, Conditions and Restrictions (“CC&R”). This document contains agreements that run with the land, which means they transfer with land ownership. In other words, a planned association developer creates these agreements or restrictions that are part of the purchase of the property for residential use. Once you sell the property, these same restrictions pass on to the next property owner, and so on.
These restrictions cover a broad range of potential issues. They may be as simple as prohibiting parking non-functioning vehicles in your driveway to major restrictions such as a restriction on the number of stories that a building can be built, the type of siding that must be used, or the types of landscaping. There may even be pet restrictions.
As well as establishing the association restrictions and agreements the CC&R controls the financial responsibilities of the association. They should lay out the association budget, as well as the property owners’ financial obligations, usually collected through dues and other special collections. It should also specify any way that the HOA can collect dues from property owners who don’t pay. This typically includes a lien on the property which makes the HOA a secured creditor. This protects the HOA in case of a property owner filing bankruptcy.
The CC&R is recorded with the County Recorder’s Office and available to the public. It creates a binding contract between the HOA and the property owner.
The Articles of Incorporation form the association as a corporation. Typically, an HOA is created as a non-profit organization. This is done early to be sure that the name of the organization and subdivision is available as well as set up control authority.
The Articles serve two major purposes. It creates the organization as a separate legal entity and protects the association members from legal liability for association business.
An HOA must comply with governing state laws on corporate formation. In Kansas, this is covered by K.S.A. Chapter 17. The Articles typically contain the HOA name, a brief description of its purpose, the names and addresses of the initial directors, the registered agent for service of process, the names and signatures of the incorporators, as well as if it will have members, and how those members are selected.
The Bylaws expand on the Articles of Incorporation and set up the association governing bodies. They establish the fiscal year, the terms for the board of directors, a release of liability (or indemnity) for the directors, the location and time of the annual meeting, procedures for calling a special meeting of the board, how members and directors of meetings, and how many members and/or directors must be present to conduct business.
The CC&R described above dictate how much power the association has to form rule and regulations over the property. The Declaration lays out the scope of authority. These rules and regulations must be reasonable. They also must comply with housing discrimination laws. These rules and regulations typically apply to control of construction and landscaping of a subdivision. These rules are not necessarily recorded. If there is a contradiction between the CC&R’s and the Rules and Regulations the CC&Rs control. It is important to note that although CC&R’s restrictions must be legal, they do not have to be reasonable.
Any and all of these documents should contain information about how the documents can be amended.
Now that you have learned a little bit about Homeowners’ Associations, let’s talk about what happens if you have a dispute with them or a neighbor.
One of the great benefits of being in a community governed by an HOA is the ability to address neighborhood disputes through an intermediary. Let’s say that your neighbor constantly throws loud parties or fails to maintain their lawn. By using the HOA regulations, you can have the HOA contact the neighbor and address the situation. This requires you to know the process as laid out in the HOA Rules and Regulations, and to follow that process, and the regulations may not address every conflict that may arise, but it is one way to address these types of situations.
Over time, there may arise a conflict between you and the HOA. Some of the most common disputes around HOAs are fee disputes. These might include whether proper notice of dues was provided, whether the payment was processed correctly, who is responsible for collection costs, and whether the property owner was treated respectfully. Another common dispute is about an HOA failing to properly maintain common areas. Arbitrary regulation enforcement by the HOA is another issue. For example, the HOA sends a letter to property A telling them to clean up rubbish in their yard, but don’t send one to property B with similar regulation violations.
Again, the governing documents discussed earlier, control how to resolve disputes with the HOA. It may require a form filing, or mediation/arbitration. It is always best to try resolving disputes by open communication, but that is not always possible. Under K.S.A. 58-4621 Kansas courts can enforce any provision of the HOA governing documents, it even provides the awarding of attorney’s fees if the conflict has to go to court.
For more information and resources, you can seek information and assistance from the Homeowners Protection Bureau, LLC (not a government agency) at https://www.hopb.co/kansas