Suing the Board

The following link is to a public word document decision from an Administrative Law Judge with the Arizona Office of Administrative Hearings.

The HOA is found guilty of- among other things, violating the State's open meeting law. The petitioner (a Homeowner member of the HOA) is found to be the prevailing party in this case and he is awarded the filing fee ($550) to be reimbursed by the HOA. The HOA is accessed a civil penalty of $500.

My concern stems from the fact that the individuals who broke the law are not held personally responsible and really have no deterent from committing the same acts again. All members of the HOA are paying the penalty for the Board's actions.

My question becomes, do you think that a member of the HOA could use a decision like this as a stepping stone to file a successful personal suit against a board member(s), maybe even a class action suit to at least reimburse the HOA for damages, ie at least attorney and filing fees, penalties, etc?

Here it is yet again: SUING YOUR HOA IS SUING YOURSELF AND YOUR NEIGHBORS. This post is a PERFECT example of what happens when someone (individual homeowner) decides to take matters into their own hands and enforce a violation. Many here are ALWAYS insisting they take their HOA to court because of rules violations. Well here you have it. What actually happens.

The HOA is typically made up of ONLY homeowners. (Your post suggest others). Hence why it is called a Homeowner's Association. All the homeowners have agreed to work together in "association" for a common goal. That common goal is most likely uniformity and maintaining home values. The rules of the HOA should be created, maintained, and controlled by the "Association"/homeowners. The HOA is ONLY funded by the owner's FOR the owners.

It sounds like a homeowner was upset about the HOA board failing to have "Open meetings". This is something allowed by law of the STATE. (Although this could be a rule amongst the association only in some states.) One of the homeowner's decided to go to court to force their board to follow the state law to have open meeting. The judge ruled in the homeowner's favor. His judgement was for the existing Board/violators to open their meetings and pay resitution to the filing homeowner/member. Since the HOA board has to be represented by legal council in a court of law, the money for this representation came from the HOA budget. The award must also come from the HOA budget. This budget of course comes from ALL the members of the HOA. Hence, why your upset about paying for this.

A HOA acts as a "Group". It's NOT individual. So the person or person's that may have done the violation can't be taken to court individually. They represented the decision as a group decision. However, the court has now ruled they must act accordingly and can no longer break the law of open meeting. There's no real need to gather resitution if they are no longer a violator of the law.

This could have ALL been avoided if the owner's had avoided the court room altogether. The HOA documents are setup to handle situations like this outside of court. A majority of homeowner's have more control of a HOA board than a HOA board has of them. IF you have a majority of homeowners banned together, they could have changed the rules, kicked out the board member/s, or put pressure on the board to change. Going to court just creates an endless cycle that expensive to all around.

MelissaP1 - The majority of owners in Associations are apathetic, and uninformed. Even if they wake up and decide to be informed, are they really going to have enough history, and ferret the necessary information to act accordingly? We, the dedicated few who have taken an interest, followed the paper trail, joined the board or committee, are the minority. Example, HOATalk has apprx. 7,000 membership out of how many millions of people living in HOA/COA's???? Apathy prevails.

The owner that sued may pay a portion of the restitution to himself, however the winnings offset his/her proportionate share, and an example is set. A violation of the Open Meetings law is a very serious matter and one worthy of correction, lawsuit if necessary.

Most owners are not going to band together to get rid of a Board because they don't want to take their place and do the work. The things you say could have happened obviously didn't happen.

In this scenario the HOA got off pretty cheap and hopefully has learned a lesson. Unfortunately for the owner, the risk is retribution which we all know occurs. For that reason, to me it's not worth a lawsuit, rather to attend an open meeting and voice my belief, or write a letter to the Board of my objection to a particular matter and my alternative suggestion. If the Board can't handle that, no matter how many times I have to repeat myself, too bad.

I would imagine that the homeowner who successfully sued the board has established a very effective means to enforce future actions. The next time the board violates the law, that individual can notify all members of the association to pressure the board to comply or it will end up costing them all $'s for the next law suit. Sometimes establishing the precedent that you WILL sue is a worthwhile result.

JohnC10: Many of associations' officially recorded documents (by declarant at inception of community)does address Liability and Indemnification for Directors and Officers. It is very thorough by referring to 'no liability to Member or Unit Owner as a result of any actions taken or omitted....mistake in judgment...no personal liability arising out of the use, misuse of the Property...etc., etc, ...except for own willfulness, conduct or gross negligence...etc.

How then does one file a personal suit against a board member based on the above? It is usually easier and more cost effective to recall the Board.

Here in MD a task force made recommendations that HOA BODs have some sort of accountability for their actions. A bill went to the House and Senate but went no where due to ethic issues:

On one hand HOA BODs are made up of volunteers, there are no educational requirements and they do make mistakes so our CC&Rs imdemnify them. I know, I know that's not news anyone here. So who wants to spend 10s of thousands of $$ on finding out that there BODs are just plain stupid?

Ok so you move beyond that at the next annual meeting by electing a new board. Then you find out you've elected the same stupidity or you're butting your head against the wall with the imcumbents or that its really the HOA lawyer or MC who is behind all of the evils.

One thing that did get signed into law is that the Attorney General now has the authority investigate HOAs if you can make a claim that your Consumer Protection Rights have been violated. I'm not too sure how that all works out . . .

Very touch subject. Sigh.

Also consider that in this case it was a 16 unit condominium. Sixteen people have to absorb that cost. That doesn't seem right.

Tracy T:
In the past filing an HOA/Condo complaint with the Maryland Attorney General's Office was a waste of time. The complaint goes to the Office of Consumer Protection where it is handed to a volunteer who trys to "mediate" the complaint. If the other party decides not to respond then the "file" is closed. Try filing a complaint and see for yourself. Maryland has a new Attorney General and perhaps HOA/Condo law will have more teeth but I won't hold my breath. A separate office, such as an Ombudsman's Office, is desperately needed. Meanwhile, unless you are in Montgomery County, which has a Common Ownership Commission to resolve disputes, the court is all a homeowner has to protect his/her rights. By the way, there is a direct link to the MD Task Force's report on the homepage of www.marylandhomeownersassociation.info.