What's Your HOA Law Wish List?

Hello,

Some of us are creating a list of provisions we'd like for our state's homeowners association act.

If anyone has ever wished for a particular law on the books in their states, we would be grateful to hear from you.

We try, but we can't think of everything!

For example, we'd like it to be legal for homeowners to fly one reasonable-sized American flag in good repair. Some states
have this is their HOA laws, but our state does not. So HOAs can ban flying the American flag.

Thank you in advance.

Common sense laws vs. overbearing vs. feel good laws are always best.

Take a look at VA HOA statutes - I find them fairly reasonable protecting both sides.

http://law.lis.virginia.gov/vacode/title55/chapter26/

Overbearing laws are those where small self governed Associations find financially difficult or time consuming to implement.

Feel good laws are laws that actually do nothing but makes one feel good.
Example being FL requirement for Directors to sign a statement that they read the governing docs.
Nothing happens if they don't sign. Nothing says they understood what they have read. It's simply an exercise in paperwork.

The main law I would want to see is the requirement for the seller (via the Association) provide a copy of all governing documents, six months of Board meeting minutes, draft of last annual meeting minutes and copy of current financials to prospective buyers (those who have signed a contract) with a right of the buyer to cancel with no penalty if they find something they don't like. VA has this and gives the buyer 3 days. I think it should be 5 (more time to read and ask questions).

The second law I would want to see is the requirement for the Association to provide a statement to any architectural violations on the property AND for the Association to be bound by that statement. Again, VA has this.

I would like my state's HOA law to establish a commission to settle disputes over violations of the governing documents, at a flat fee of $500 per complaint, with the adjudication including who will pay the fee. Appeal to the appropriate state or municipal court is possible. Commissioners will be HOA attorneys donating pro bono time and will sneer at any party who even breathes "appeal," in the same way judges have sneered at these attorneys for years for not keeping their HOA clients' problems out of the court

Lots of good ideas here, but first, a correction.

There IS a federal law on flying the flag - the Freedom to Display the American Flag Act of 2005 prohibits HOAs from restricting a homeowner from displaying a flag. It CAN reasonably restrict the time, place and manner of the flag display if they exist to protect a substandard interest of the association (e.g. flying a flag so large it creates a traffic hazard.

(Yes, I know some will fight over what’s reasonable, but that’s a conversation for another day.)

I’ve always been a huge advocate of telling prospective home buyers of the existence of a HOA before they buy, so I love Tim’s idea on providing prospective buyers a copy of the governing documents, current budget, board meeting minutes, etc., as well as Melissa’s suggestion that it be the seller’s responsibility to provide this information.

Disclosure should also include the banks – thanks to the financial meltdown, they know or should know there are a lot of homes in HOAs. It may take some digging to find out which one (starting with the current owner would be good if they weren’t so damned lazy). They certainly find out when a title search reveals the HOA lien. As a former Board treasurer, I got sick and tired of the association left out when everyone gets to walk away with a little cash.

That’s also why I would love banks to escrow HOA assessments just like they do property taxes and PMI. I know the Consumer Financial Protection Bureau has established rules requiring mortgages to reflect all the costs of the home purchase including HOA fees (don’t understand why Congress hates the CFPB and want to kill it, given what happened with the real estate meltdown, but that’s another conversation for another day too.)

And let's have an affordable alternative dispute resolution program that can settle a lot of arguments without everyone running to court. Make the costs reasonable and split it between both sides. It could be a joint venture between the state consumer protection division (whoever runs that) and a local law school (good experience for the students). Better yet, it could be a form of a program our BBB had some years ago - don't know if it still exists, but they ran a volunteer arbitration program where ordinary citizens could mediate disputes between consumers and member companies.

A final word on flags – homeowners and HOA boards would prevent a lot of drama if they simply went to the American Legion website - https://www.legion.org/flag and look at what it says regarding proper procedure (flying the flag in bad weather, when to fly it at half-staff, etc.) From there, the boards could set rules everyone can live with and homeowners could look at that first BEFORE running to the TV station about how unpatriotic the Board is.

AMEN ... The UCIOA for HOA's does a good job of protecting all various entities from Developer, to Homeowner, and Secured Creditors. It makes all attempts to be equal and fair.

My state requires documents to be given to buyers ... but I wish ALL states REQUIRED.

I wish all states better controlled developers. Developers can choose anything under the sun they want to initially place in governing documents and what they want to build ... essentially the sky is the limit. However, after they make their choice they need to abide by their choice and not as in some states go fishing for Consumers to buy their product and then turn around and essentially later defraud both the Consumer and Secured Creditors who have spent or lend large sums of money for what was initially promised. Sorry ... that is wrong!

Thought of another wish ...

Wish all states similar to NV implemented laws whereby the HOA who does not own the street cannot regulate and try to fine owners.

Potentially in most states if you look at the State definition for "Common Interest Community" or similar it will state as for example CO:

"Common Interest Community" means real estate described in a declaration with respect to which a person, by virtue of such person's ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a declaration. Ownership of a unit does not include holding a leasehold interest in a unit of less than forty years, including renewal options. The period of the leasehold interest, including renewal options is measured from the date the initial term commences.

Nevada said essentially wait a minute ... if the streets are owned and maintained by the Local Government where do the HOA's get off fining and foreclosing on homes when they are regulating property they do not own and are NOT obligated via their HOA Assessments to pay for maintaining and improving. Now in NV if the HOA does not own and pay assessments to maintain streets they cannot regulate.

The building code in all 50 states would prohibit such a pole.

look them up and see ...............

'fall' length to roadway

wind load

etc.

COST of such pole

etc.

We considered doing that back in 2005 while I was at Countrywide Financial. Problem is many HOA's assessment are monthly, which would't work. In addition, who was going to inform all the servicers when a specific HOA raised their dues. In 2005, my HOA had 42 different servicers of loans. What if gthere was a change of management company. Change of Board members, change of Treasurers, etc., etc.

Lender would have been the one originated the loan in the first place. Loans are serviced (Servicers) for the investor who owns the Note.

The servicer's escrow department is tied in to each of the counties (parishes in LA). Each property has a unique APN. When taxes go up, escrow account will be short. Same with insurance. When that haeppens, at the beginning of the year, escrow will send the borrower a updated escrow statement.

HOA dues WILL NEVER be impounded through a escrow account.