How Do I Stop an HOA Lawsuit?

How Do You Stop a LawSuite?

I believe that our HOA council is misleading our HOA in the validity of their case against a homeowner. How I can file a complaint with my HOA for the money they are spending on legal costs? This is the Background.The HOA is in California.

A new homeowner decided to do extensive remodel before they moved into their top floor three bedroom condo in November of last year. They asked the property management company if there were any guidelines. They never heard from them. They started their demolition in December and were promptly stop by the City because they had not yet pulled permits.

Providing architecture drawings and an engineering study, their remodeling project was approved by the City. The project entailed removed a load bearing wall, re-enforcing the structure, and eliminating a bedroom for an open concept kitchen. They also reversed the kitchen to the dinning room which involved plumbing modifications. During all phases of the remodeling, the City monitored their progress and has signed off all work as it was completed. This included laying electrical wiring through the floor to support the new kitchen Island (the City insisted that it be done that way).

The HOA asked these homeowners to submit an Architecture request in January. Our HOA did not have an Architecture Committee in place until the day that the homeowner met with this committee. This new committee consisted of nothing but Board members. The committee rejected their project and told them to return the unit to its original condition. They stated that it violated the CC&R’s. In a letter from the HOA attorney, he stated that though the CC&R’s allow the Board to grant approval for this type modification under certain conditions, the Board at this time has rejected this project. From that point on starting February, the Board has refused to sit down with the Homeowner to discuss this matter with all correspondents though the HOA attorney.

Going forward, the board filed an injunction to preventing the homeowner from completing their remodeling or moving into the units. They cannot install their toilets, showers, baths or sinks, cannot complete their kitchen or complete the flooring. A trial set before a Judge for February of next year. The HOA has so far run up $30,000 or more in legal fees for this unit. They have posted an additional $10,000 bond with the court. The homeowner has run up $10,000 in attorney fees.

Our CC&R state that the HOA is only responsible for the exterior of the Condos and the common areas. But it implied that the HOA had a duty to maintain the property structure integrity and sound proofing. But according to Davis-Sterling, the Board (e.g Architecture Committee) can not make decision based on “arbitrary and conspicuous" reasons. Several cases are quoted in Davis-Sterling where the HOA has lose for just this reason. Substantials awards were given to the homeowner with the HOA members being put on the hook to pay the bill. There is also a standard case quoted in California from 1977, where an HOA cannot punish a homeowner because they did not get permission.

In the three hearings in courts, the Judge instructed both parties to sit down and work this out. But under the HOA council advise, this is not happening. Through their attorney, the HOA has hired a forensic investigate who is now asking the homeowner to tear up the floor were the electrical was install even though the City has inspected and sign off on this specific installation. The attorney has told interested parties (re-estate agent) that these homeowners do not have ANY permits. Their permits are posted in the unit with sign-offs from the City. This attorney seems more interested in generating an expensive and time consuming legal case instead of getting it settled. These property owners are not unreasonable. But our Board is in vacuum under legal advice.

I want this case settle. I want the Board to stop spending money on this gamble before a Judge. How should I file a complaint? Is their something I am missing? Do any other of you have other horror stories?

This is just a cluster on everyone's part. Sorry but the new owner's aren't that smart either. The HOA board can substitute for the ACC committee if there is none in existence. They can also veto the ACC approvals too if there was one. The final decisions go to the Board ultimately.

The owners aren't doing themselves any favors by doing this remodel either. Rule of thumb when flipping... NEVER EVER remodel a home more than other property in the area. Sorry people but putting in marble flooring, granite counter tops, and Nickle plated faucets don't increase your home values. Nor does it increase your resale price. If your neighbors have linoleum, regular counters, and basic faucets your NOT going to recover your money. You have to remodel to the same conditions of matching homes around.

Home values are based on REAL numbers. That means what houses are selling for in a 6 month period of similar size, options, and foreclosures sold for in a few mile radius. HOA's do NOT have anything to do with a home values. They just have everything to do with a home ATTRACTIVENESS. More people will buy if the area looks nice than one without standards.

These owner's unless they are building a retirement home, will never get their money back unless all the other homes around them are up to that standard. The HOA does have a responsibility to protect their own home values of their members from having someone mess up theirs. That means by these owners upgrading beyond what your homes would sell for, means effecting your loan rates and resale values. Are you all ready to upgrade to their standards? In the end, it can damage more than just this lawsuit...

Michael,

As others have pointed out, there are issues and blame on everyone involved.

The homeowners who failed to initially comply with the CC&Rs (by not submitting plans before starting the work - and asking once and not receiving a response doesn't cut it).
The homeowners who failed to initially obtain required permits
The Board for failing to work with the owners.
The Association Attorney who, based on your posts, appears to only want revenue vs. resolution (although, this could be at the boards direction).

Ignoring who is to blame - the way to stop/settle the legal action is to gather support and either recall or simply don't reelect, and put those willing to settle in the position to do so (as your new Board of Directors).

Keep in mind this will require finding others willing to serve on the Board (perhaps you will be one of them).

Until you replace the Board, the decision for the legal actions rest with the Board.

A lot will depend on the type of building this is. I don't think a HOA could ever interfere with construction on a SFR if the work was completely inside the structure. A townhouse less so, and multiple family residence even less so. It would be nice to know what type of structure we are talking about.

My personal belief is a condo owner cannot do anything they wish to do as it could affect the integrity of the entire building. As an example. A top floor unit removes a load bearing wall and the roof AC units come crashing down.

Let us be realistic about this. It is not I can do as I wish internally to my unit which is a belief many believe.

Since condominium associations typically maintain from studs in and owners typically maintain from drywall in, I suspect that with all the above changes to the common elements that the Association was responsible for, they simply didn't want to be responsible for those changed elements.

There may be many reasons why it was disapproved. What needed to happen, and may or may not did happen, was for the Association to explain the reasons why they didn't want those changes.

It's just too late to stop this lawsuit. The owner should counter sue the HOA instead of bringing a separate suit. That will save money on all ends. The matter can be settled in one big settlement/decision. The judge can then rule who is responsible for their legal costs and the actions to be taken by both parties. Most likely it sounds like the judge will make each party responsible for their own legal costs due to there not really being an "outrageous egregious" actions being pursued. The HOA has a right to stop the project as do the owner's did suffer damages by pursuing an unapproved project.

HOA's are not about forgiveness as much as permission. Permission here was key. I don't know how they owner went about getting theirs because there sounds like a missing element here. The PM works for the HOA and can NOT approve/disapprove, or give guidelines out to the members. It's NOT their responsibility. It is strictly the HOA board as the PM works for the board. I don't know how the owners submitted their plans or attended a HOA meeting. Seems to me if you want to have plans approved you go to the board directly and attend meetings. Not just "phone it in" and hope for the best. Someone dropped the ball here for sure.

These owners are NOT innocent victims here. Sorry if you want to hear that. From my own experience of similar situations, these owners can not play the ignorance card. Can't blame the HOA for not knowing the rules. The CC&R's and Articles of Incorporation are PUBLIC documents. ACC and the By-laws are the HOA's. Simple once your a member of the HOA you should ask for the ACC and By-laws. The other documents are at the court house. Simple put, the court will see it this way as well. It was their duty to be informed and get the right permissions. They didn't, so the HOA can assert their rights to make them compliant.

To MelissaP1

The Homeowner submitted a request for Architecture Guidelines as per instruction from Property Management Company 4 days after their property closed.

With no answer, the homeowner started the demolition 17 days later.

26 days later the homeowner attended the General Board meeting and informed the Board that they were remodeling their kitchen, bath and so forth. They requested that the Board initiate a water shutoff for a day in their building for their project (shared water supply). The Board made no requirements that they needed to submit an Architectural Committee request. The homeowner did not press them for this, either.

Initiated by the HOA, water shutoff was performed for one day, 33 days after their property closed.

44 days after their property closed, the HOA sent them a cease and desist order and request for Architectural Application. The City issues a STOP WORK ORDER till they could obtain a Permit.

It goes from there.

Michael as things stand now you have no role in this matter. As an owner only the decision to undertake legal action it entirely up,to the board.
$30,000 in seems to suggest this has been going on for some time. Just where have you gotten your numbers as to what the association has spent and what this home owner has spent.

And just one observation the homeowner began demolition without obtaining permits from the city or approval from the board. Just how do you decide that plan is the correct way to go? How come none of the contractors used bynthismowner never questioned about permits? Most contractors would understand permits are required prior to work beginning. And as others have suggested just because they claim not to have heard back does not constitute approval.
Outcome should be interesting. And under some documents the board could seek legal costs should the court rule in their favor.
As a general rule you don't buy a condo unit in an association and begin ripping out walls and modifying electrical components and water lines which service the entire building and are more than likely common elements without authorization.

This might end up being an expensive lesson. The fact the court issued an injunction might not be good news for this owner.

I find it hard to believe that the HOA's attorney admitted in writing that the Board's actions were arbitrary and capricious. Would you mind posting the exact language from the letter?

I also agree with Melissa that the homeowners are responsible for instigating the whole mess. Applying for approval and not receiving a timely response does not constitute de facto approval.

Surely, what we have here is a failure to communicate.

Guess the unit owners never considered being present at the inspection. How about providing copies of the city inspectors sign off on the work.

You see if I had been prevented from occupying my home and the entity responsible was sending an inspector over to put together a report Imwould have been there, perhaps the contractor doing the work would have been there and copies of all pertinent documents would have been there.

Seems there is enough blame to go around on both sides. From failing to satisfy procedures, from providing necessary documents, from settling matters before work was done, to placing blame but accepting none.

Due diligence and the claim of failing to do so swings in both directions. My guess similar remodels occur regularly without the same amount of delay, cost, and friction.

How did you have authority to do that? What kind of wood? Floors or casing? No matter what, the HOA has no say in what a owner stores in his unit, gasoline exempted.


If the work had a permit, then engineering would be required with the draconian actions of a board which doesn't understand construction.

Curious, are you the "offsite" homeowner the Board is describing on their website?

The City shutdown the homeowner's project only at the demolition stage because their was not permit (probably motivated by a noise complaint when the homeowner removed the floor and drywall). No remodeling had taken place including the removal of the Load Bearing wall. The homeowner was fined for that reason. The City required that the homeowner provide a certified architecture drawing and that and engineering study by a registered Engineer to obtain the City permit and prior to any more work to be started.

As for myself. I am a former Board members. I know most the people in the community. I do talk with the Board and homeowner. I was intending to write an article for our HOA Newsletter to let people know the "right" and "wrongs" of remodeling. But unfortunately it looks like this is becoming an "abuse of power" which would reflect badly on our Association. The old Board that this new Board replace were such knuckle heads. The new Board I expected more. But then there is this attorney who I think is clueless to the consequences of his actions. I want this come out to a positive conclusion. But it just get worse and worse. We are moving into the holidays. At the end of October 2015, it will be a years since the the homeowner purchased this unit. The homeowner need a place to live with their children!!! Does anyone believe in common sense? It is not the responsibility of the Association to help a homeowner move in?

These are the Rules in Huntington Beach California. Many people fall into this trap. Our City even sends inspectors out on the weekend. I bet many of you have done the same but not got caught.

If the City of Huntington Beach, California notices any construction that appears to be over $500, they will ask the property owner to contact them. If they are not at home when they observe the construction, they will post a “Stop Work Order”. By City Code, if the construction need a permit to continue, the permits will cost the property owner double the price because they did not asked permission first. Construction violations can be reported to the City anonymously. Probably someone companied about the noise. That is why the HOA and the City got involved. there is a real busy body living there next to them. A “Stop Work Order”. is not the same as a "Red tag" which merinos unsafe.

I have told this story before but once again.

Homeowner in Columbia SC applied for a permit from his HOA to erect a garage. HO did not hear back so he went and built it claiming the HOA had 30 days to decide and as they said nothing, he was given "defacto" permission. HOA took it to court. HO lost and had to remove the garage. This was in a very expensive, upscale neighborhood with top dollar lawyers used by both sides. Court said lack of permission is not "defacto" permission.

Yes, I suppose it could depending on the wording of the documents. Our architectural change applications come up for review monthly except for the those months where there is no board meeting (usually June, August and December) and then an applicant can wait as much as 8 weeks for an approval.

I misspelled the word "capricious" when I wrote the first entry. IT was my typo. This is what I mean

http://www.davis-stirling.com/MainIndex/ArbitraryCapricious/tabid/3203/Default.aspx#axzz3pyKKnTnO

This is what the attorney wrote, which he now claims was a typo. This was in response to the homeowner appear to the HOA asking for justification for their rejection.

"Although the CC&Rs provide the Board with authority to approve certain structural alterations if specific conditions are met, the current Board does not have a history of approving these types of modifications nor is it required to do so. The Board is well within its rights to deny your appeal."

This is a mute post as the HOA has admitted that they previously approve such type of remodeling on another unit several years ago. They have no issue with the load bearing wall. So far this attorney has run up $40,000 as was revealed in the last HOA meeting. Still the HOA has not lifted the injunction. As of this writing 29th of October, If the HOA has not resolved the issue, then in January they will meet for Court Arbitration. If nothing is reach, then the trial is in February. Expect the legal fees to more double then.

They injunction was place for safety issue. The City inspector say there are none after revisiting the site last week. The homeowner has been unable to live in their unit going on a year on October 28th. No Toilets, no showers, no kitchen, no floor.

The attorney has created some sort of gag order with this Board, They refuse to talk about with anyone. They do not contact the city. The only person they seem to listen to is the Forensic Investigator that the attorney hired. The Forensic Investigator though that the Homeowner did not have permits after a walk through with the City inspector and not seeing the permits posted on the wall of the unit. The Attorney admitted he does not understand the permit process in a recent meeting with the homeowner. He is an HOA attorney!

Now my question is since our HOA has already spend $40,000, if the Board is unable to find safety issue or any "Legal" reason that they rejected remodeling and are forced to lift the Injunction, who gets the $10,000 bond?

For your Info: A bond is placed with the court, but the plaintiff does not have to post the amount. They are agencies that fro a fee will post it for you. So the HOA is probably out about $500 at this time.

I am not sure what the purpose of the bond is. Perhaps to ensure that the plaintiff (the HOA) will diligently prosecute its case. If the court rules in the HOA's favor, the bonding company will get its money back and the association will be out the original $500 fee. If the court rules that the defendants are entitled to the money, the HOA will have to pay the bonding company up to $10,000.

correcting my own typo : should read

"But whoever is feeding you ( ? from within the new Board ? and the disputant owners ?) may NOT be doing you any favours. . . "

mute post = moot point

I LOVE your sense of humor