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JeremyM3 (North Carolina)
Posts: 122
Posted:
State: North Carolina

Long story but I'll try to be brief, and answer questions.

I'm the Treasurer on my HOA board of directors. We have 49 homes in our community. Some members of the community aren't happy with how violations and enforcement is being done. The board is receiving violation notices for thing such as: Commercial vehicles parked in driveways.
This is very clearly a violation of our CC&R's (Covenants / restrictions).

4 members of the board are voting to not enforce this. So they are selectively choosing which covenants to enforce, and which houses to send violations to and which not to. I'm the only board member voting to enforce this. But a lot of homeowners say they DO want it enforced.
I've asked the board to use part of our legal fund to hire a lawyer to have any covenants amended that people want changed/removed, but they ignored my request.

The HOA President is now trying to gather support from the community to remove me from the board (I'm 95% sure they won't get enough votes, I'm the only 1 on the board that seems to do anything). HOA President emailed me today and said "The HOA is not a business, it's a community" That should be proof she isn't handling her fiduciary duty to follow the covenants, because the HOA actually is a registered non-profit corporation.
Is the board able to pick and choose which covenants they enforce? Should I hire a lawyer and sue the board to make them enforce everything as written?

I started a petition today to remove our HOA President and I've gone door to door collecting signatures, our bylaws say we need 51% vote to remove a board member.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Jeremy,

First, welcome to the forum.

I suspect that your governing documents are similar to mine and specify that "the Association, or any owner, shall have the right to enforce." Therefore, unless your governing documents specify that the Association must the Board, similar to each member, may choose to enforce or not.

A member may choose to enforce on one individual. The Association, if they choose to enforce, must enforce equally on all members/residents. Failure to enforce equally will offer the member a defense of selective enforcement.

If you hire an attorney and take the issue to court, it's possible that the judge, rather then instructing to enforce, may simply say that since the covenant wasn't enforced, it is null and void. Therefore, consider your options carefully.

My suggestion would be to not try and remove the President. Instead, gather support and volunteers willing to serve and simply elect those who will enforce to the Board at the next election. This would be far less expensive and minimize fracturing the community.

JeremyM3 (North Carolina)
Posts: 122
Posted:
Quote:
Posted By TimB4 on 05/03/2017 8:50 PM
Jeremy,

First, welcome to the forum.

I suspect that your governing documents are similar to mine and specify that "the Association, or any owner, shall have the right to enforce." Therefore, unless your governing documents specify that the Association must the Board, similar to each member, may choose to enforce or not.

A member may choose to enforce on one individual. The Association, if they choose to enforce, must enforce equally on all members/residents. Failure to enforce equally will offer the member a defense of selective enforcement.

If you hire an attorney and take the issue to court, it's possible that the judge, rather then instructing to enforce, may simply say that since the covenant wasn't enforced, it is null and void. Therefore, consider your options carefully.

My suggestion would be to not try and remove the President. Instead, gather support and volunteers willing to serve and simply elect those who will enforce to the Board at the next election. This would be far less expensive and minimize fracturing the community.


Thank you Tim. Little confused on this sentence you wrote, was it a typo?

Our Covenants state: "The Declarant, the Association or any Owner, shall have
the right to enforce, by any proceeding at law or in equity against any person or persons violating
or attempting to violate any restriction, condition, covenant, reservation, lien and charge now or
hereafter imposed by the provisions of this Declaration, either to restrain or to enjoin violation or
to recover damages, and against the land to enforce any lien created by this Declaration. Failure
or forbearance by the Declarant, the Association or by any Owner to enforce any covenant or
restriction herein contained shall in no event be deemed a waiver or the right to do so thereafter."
JeremyM3 (North Carolina)
Posts: 122
Posted:
No way to edit a post? The statement you wrote that confuses me is "Therefore, unless your governing documents specify that the Association must the Board, similar to each member, may choose to enforce or not."

"must the Board"?
JeremyM3 (North Carolina)
Posts: 122
Posted:
1 homeowner specifically had his garage built with a higher ceiling (our street are all new builds) so that he wouldn't be violating the commercial vehicle in driveway law. Now the board is NOT enforcing the law for 3 other homeowners that have commercial vehicles in driveway... that 1 homeowner could easily sue for discrimination I believe.

I want the board to either amend the bylaws to REMOVE this law, or enforce it as it's written. When I requested we make amendments, the board ignored my request.
RichardP13 (California)
Posts: 3,868
Posted:
Since you have mentioned commercial vehicles a couple of times, it seems this is the your one sticking point of enforcement. As Tim pointed out, CCRs will have a provision that will allow a Member to enforce a covenant a long as it is in the CCRs. If it is only in the Rules and Regulation, they can't.

Enforcement of commercial vehicle is a very touchy subject. Who really know the correct definition and should it be enforced in a community. People have jobs, some are even plumbers and electricians who probably have commercial type vehicles.

As president of my own association, I would vote against fining someone with such a vehicle. My first obligation was making sure dues were paid. Now, I wouldn't allow a 18-wheeler, but only because they couldn't park it.

There is some truth to the HOA not being a business, but a community. Your objection to the vehicles proves such a fact.

Elections have consequences as one former president once said. If enough people don't want commercial vehicle have them vote people in that will enforce their will.
JanetB2 (Colorado)
Posts: 4,219
Posted:
The term "shall" is similar to "must", "will" or "can". If you read your documents and substitute those words in place of "shall" it potentially will answer your question.
JanetB2 (Colorado)
Posts: 4,219
Posted:
The BOD's fiduciary obligation is to follow the contract, whether they may agree with items or not. If there are items in the contract that the BOD or membership would like to change then they need to exercise their right to Amend the Contract via legal meeting and legal vote of membership. For the BOD not to follow potentially would open the HOA to a lawsuit from a member who expects it to be abided by as currently written and as attached to their property title.
RichardP13 (California)
Posts: 3,868
Posted:
Quote:
Posted By JanetB2 on 05/03/2017 9:42 PM
The term "shall" is similar to "must", "will" or "can". If you read your documents and substitute those words in place of "shall" it potentially will answer your question.

The OP posted the language The Declarant, the Association or any Owner, shall have the right to enforce. They shall have the right to enforce, not the obligation to enforce.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JeremyM3 on 05/03/2017 9:03 PM

No way to edit a post?

Unfortunately no.

Quote:
Posted By JeremyM3 on 05/03/2017 9:03 PM

The statement you wrote that confuses me is "Therefore, unless your governing documents specify that the Association must the Board, similar to each member, may choose to enforce or not." "must the Board"?

Sometimes the fingers don't catch up to the brain.

Should have said that unless the governing documents specify that the Association (Board) must enforce, then it's an option.

Based on your citation of your documents, the developer (declarant), the Association and any member all have the right to enforce. There is no requirement that any of those entities exercise that right. It's a choice.

Your Board has chosen to not exercise that right with certain covenants. The next Board may or may not choose the same thing. This is why I suggested simply voting the bums out at the next election.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JanetB2 on 05/03/2017 9:48 PM

The BOD's fiduciary obligation is to follow the contract, whether they may agree with items or not.

This is the members obligation as well.

You seem to imply that the Board must enforce.
However, a member has that same right and I think you will agree that the member is under no obligation to enforce. Yet, per the terms of the contract, both have the exact same right of enforcement. Therefore, logically (from my perspective) if one entity doesn't have to exercise their right of enforcement the other entity has that same option.

JeremyM3 (North Carolina)
Posts: 122
Posted:
Thank you Tim. I'll continue trying to get my 51% (per our bylaws) of signatures to remove the President/VP immediately, and if that fails, I'll bring it up again in December at election time.

We have 49 houses, and I have 10 signatures already. I need 15 more in order to remove the President/VP, and I still have 25-30 more doors to knock on. I think the odds are in my favor.
LarryB13 (Arizona)
Posts: 4,099
Posted:
In addition to what Tim said, the board has the fiduciary duty to act in the best interests of the association. Would that duty be served by starting a civil war among the membership? The Business Judgment Rule allows the board to decide what battles to wage and which ones to sit out. Nearly all of these "commercial vehicle" complaints result in a victory for the vehicle owners as there is no legally recognized definition and no one ever thought to define the term in the declaration.

I am not aware of any case law that would support the idea that a homeowner who has the right to enforce the deed restrictions with civil action may, instead, sue his HOA.

There seems to be no reason why the OP, and others of a like mind, could not band together and seek enforcement of this deed restriction in the courts.

RichardP13 (California)
Posts: 3,868
Posted:
Quote:
Posted By LarryB13 on 05/04/2017 12:32 AM
In addition to what Tim said, the board has the fiduciary duty to act in the best interests of the association. Would that duty be served by starting a civil war among the membership? The Business Judgment Rule allows the board to decide what battles to wage and which ones to sit out. Nearly all of these "commercial vehicle" complaints result in a victory for the vehicle owners as there is no legally recognized definition and no one ever thought to define the term in the declaration.

I am not aware of any case law that would support the idea that a homeowner who has the right to enforce the deed restrictions with civil action may, instead, sue his HOA.

There seems to be no reason why the OP, and others of a like mind, could not band together and seek enforcement of this deed restriction in the courts.


Well said!
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JeremyM3 on 05/04/2017 12:16 AM

We have 49 houses, and I have 10 signatures already. I need 15 more in order to remove the President/VP

If this is what you think, you may be in error.

The membership typically has zero authority to remove anyone by petition.
The membership does have the authority to call a special meeting of the membership for a specific purpose (which is done by petition).

Therefore, if your petition says we the undersigned petition the board to remove directors xyz, that would be a request.

The petition needs to say something along the lines of we the undersigned being members of HOA, Inc. do hereby petition the Board, as authorized by NC statute abcd and the Article __, Section __, of the Associatin Bylaws, to hold a special meeting of the membership for the purpose of recalling Directors abc and, if the recall is successful, to hold elections to fill those positions until the end of the previous directors term.

Keep in mind that this need to be on each page of the petition (otherwise, you simply have a batch of signatures).
Keep in mind that you need signatures from members (those who are on the deed).
Keep in mind that after submitting the petition, the Board then has to verify the signatures, arrange for a meeting venue, send out notices, draft ballots, etc.

Although this is from CA, it gives a good general process for recalls:

Davis-Stirling site recall page

Sample Petition

When gathering signatures, have you found anyone willing to step up and volunteer to serve?
If not, then the recall may be pointless.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
May I ask what enforcement methods does your HOA have? Your saying they aren't enforcing, well what are the enforcement options? Do you have a fining schedule? Your going to sue every violator? Do you lien/foreclose on those who don't pay their dues?

Sounds like a case of "Not seeing the forrest for the trees"... BTW: Lawsuits bad idea... Suing your HOA is suing yourself and your neighbors... Do you really think that is going to help your case???

Former HOA President
JeremyM3 (North Carolina)
Posts: 122
Posted:
Our covenants say our enforcement process is the possibility to add fines, place liens on properties.

In 5 years the board has issued ZERO fines to the 49 houses, even though we have some violations that are 4 years old.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JeremyM3 on 05/04/2017 5:33 AM

Our covenants say our enforcement process is the possibility to add fines, place liens on properties.


Expecting that what you cited is all that the covenants specify on enforcement, then a good argument can be that your Association does not have the authority to fine. Per your citation, enforcement is to be done through the courts.

Virginia recently went through this issue.
If interested, see the following thread on this forum:

Subject: VA Associations, Do you still have the authority to use monetary penalties for violations?

JeremyM3 (North Carolina)
Posts: 122
Posted:
North Carolina HOA Laws say we are allowed to issue fines up to $100, and then another $100 every day after the first 5 days pass

Do a Ctrl+F and search for "$100" on this page:
http://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByChapter/Chapter_47F.html
TimB4 (Tennessee)
Posts: 21,059
Posted:
Actually, the act states:

"Unless the articles of incorporation or the declaration expressly provides to the contrary, the association may:"

As I pointed out in the thread I suggested you look at, I learned in reading the court opinions and various articles about the cases was that the expression Expressio unius est exclusio alterius , a Latin phrase that means express mention of one thing excludes all others. The court ruled in Belhaven that since the CC&Rs specifically mentioned an enforcement method that the omission of other enforcement methods (i.e. monetary penalties) shows an intent to exclude.

I don't know if there have been any NC court cases about the statute.
If there have, it would be interesting reading to see if the same logic applied in VA is/was/will be applied in NC.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By TimB4 on 05/04/2017 6:52 AM

I don't know if there have been any NC court cases about the statute.
If there have, it would be interesting reading to see if the same logic applied in VA is/was/will be applied in NC.

I looked and it appears that in NC you may fine.

see: WILLIAM J. WISE AND LYNN P. WISE v. HARRINGTON GROVE COMMUNITY ASSOCIATION, INC
TimB4 (Tennessee)
Posts: 21,059
Posted:
Oops, hit submit too soon.

Needed to add that this is if the Association was created in 1999 or later.
Otherwise, it appears the court decision was that the covenants must allow it.
JeremyM3 (North Carolina)
Posts: 122
Posted:
Sorry, let me be more clear. Our bylaws state enforcement via monetary fines is ok.

Here's the exact clause: http://i.imgur.com/5jCsc1U.png

This has me kinda confused now, because our actual process of violations is we send out a friendly letter, 1st warning letter, final warning letter, then we send a letter to schedule a hearing.

Is it ok that we're doing all those extra steps even though our bylaws state a different process?
SheliaH (Indiana)
Posts: 6,964
Posted:
If most of the board refuses to enforce the CCRs, you have a bigger problem than the president – perhaps all the board members who are voting not to enforce should be recalled – have you considered adding that to your petition?

Even if you do succeed in getting these people out (or at least the president), you still need to have people in place ready to step up to replace them so you can enforce the rules or whatever else the community wants to do. Got anyone in mind?

Is the commercial vehicle issue the only one that’s bugging people? It may be there are some other issues that really need attention – how many homes are in violation? If we’re only talking about 1,2 or perhaps 5, out of 49, that may not be a huge issue. That could be why the rest of the board is concentrating on the other issues. Another issue is fairness – if they’re determining which houses should get a notice and which shouldn’t, what’s the reasoning behind that? Are the ones getting notices repeat offenders? As a board member you should know the answer to these questions.

I do agree with Larry that there’s nothing stopping you and the other like-minded homeowners from banding together and duking it out with the violators in Small Claims Court – why haven’t you? Better yet, why haven’t the others attended the meeting and let the board know what they think? It’s one thing for everyone on the board to outvote you, but when confronted with a bunch of angry homeowners that could change their tune.

There’s also the matter of time and money – does the association have the money for what could be a lengthy battle? As treasurer, you should know the answer to that – and if there are other association issues that need more resources. I’m not saying the commercial vehicle issue isn’t important, but you really need to choose your battles.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JeremyM3 on 05/04/2017 7:02 AM

Sorry, let me be more clear. Our bylaws state enforcement via monetary fines is ok.

One could argue that the Bylaws are now in conflict with the CC&Rs.
When a conflict exists, it's the higher document that must be followed.

Suggest you gather support and amend the CC&Rs.

Mind you, all is good unless someone takes the issue through the courts.

Quote:
Posted By JeremyM3 on 05/04/2017 7:02 AM

This has me kinda confused now, because our actual process of violations is we send out a friendly letter, 1st warning letter, final warning letter, then we send a letter to schedule a hearing.

Is it ok that we're doing all those extra steps even though our bylaws state a different process?

Your process sounds good (it's similar to what we do).

You are complying with your Bylaws but are going above and beyond what is required. This could actually help if there was any challenge.
GenoS (Florida)
Posts: 4,276
Posted:
Quote:
Posted By LarryB13 on 05/04/2017 12:32 AM
Nearly all of these "commercial vehicle" complaints result in a victory for the vehicle owners as there is no legally recognized definition and no one ever thought to define the term in the declaration.

Not true in Florida.

2002 decisionl; Vans with commercial signage have to go; Claim that the rule was "vague" is without merit.
2014 decision; Golf cart with signs advertising a commercial business has to go even though the cart was not used for business.


Associations have a pretty good track record of prevailing when they seek to enforce against "commercial vehicles". Those are all condo cases. HOA disputes such as these aren't subject to arbitration in Florida and finding court decisions is harder. I don't think it's unreasonable to assume that the courts would apply the same thinking toward HOAs as the DBPR does toward condos.

The language in the governing documents is important. While searching for the above DBPR decisions there were a couple of others that upheld a condo association's right to differentiate in its definitions of "pickup trucks" vs "SUVs" and allow or prohibit each separately. Careful attention to what an association defines as a commercial vehicle is extremely important.

There's also this opinion from an attorney published in a newspaper Q&A column that says,

"In other words, when the intent of the rule is clearly to prohibit commercial vehicles, an arbitrator will not defeat the purposes of the rule, but that does not mean that it is easy to adjudicate whether a vehicle is commercial or non-commercial."

Associations that are very clear in what they deem to be "commercial vehicles" stand an excellent chance of prevailing in their enforcement actions. In Florida, at least, there's scant evidence to back up the claim that nearly all "commercial vehicle" enforcement actions wind up as victories for the vehicle owners.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By RichardP13 on 05/03/2017 10:00 PM

The OP posted the language The Declarant, the Association or any Owner, shall have the right to enforce. They shall have the right to enforce, not the obligation to enforce.

I concur with Richard. Here is a good article on the point, though it is mostly for the state of Florida:

http://www.kbrlegal.com/court-clarifies-lack-of-association-obligation-to-enforce-covenant-violations/
JeremyM3 (North Carolina)
Posts: 122
Posted:
So there's no obligation to enforce ANY of the covenants then? The board can literally choose to enforce NOTHING at all and that's ok?
AugustinD
Posts: 5,144
Posted:
I spoke too soon. The last paragraph of the article at the above link suggests JeremeyM3 may have a case against the Board:

"Additionally, it is important to be aware of certain types of violations that may be of a nature that an equitable fiduciary duty to enforce exists, such as if the exterior of a property in a homeowner’s association has fallen into obvious disrepair, or a restricted vehicle is being kept in a community with vehicle restrictions in the governing documents. Any question regarding a particular issue should be reviewed with counsel before a decision is made to not take legal action to enforce it." -
http://www.kbrlegal.com/court-clarifies-lack-of-association-obligation-to-enforce-covenant-violations/

I think an "equitable fiduciary duty" is a board duty that, if not undertaken, would undermine the basis on which the HOA was formed. That is, if the covenant in question is not enforced by the Board, then the very character of the HOA would be changed, and the original, well-documented overall general plan of the HOA would be undermined. The courts say this is not allowed.
AugustinD
Posts: 5,144
Posted:
JeremyM3, you nailed it. There are limits to a board's not enforcing the covenants, even when there is a permissive clause on the point making enforcement optional. If a board, say, stops collecting dues; stops maintaining common areas; looks the other way while members either paint their homes polka-dotted orange; bulldoze their homes to build a high-rise apartment in the middle of the suburbs; or leave decrepit old cars with flat tires in their driveways, then I believe the courts would enjoin the boards to fix these non-compliant situations.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By JeremyM3 on 05/04/2017 6:52 PM
So there's no obligation to enforce ANY of the covenants then? The board can literally choose to enforce NOTHING at all and that's ok?

Technically, yes.

Not that long ago in my Association, the Board hired an independent contractor to enforce violations. The membership was ticked off because common sense seemed to have left the process and the enforcement was very very aggressive. The membership finally prevailed and the contractor was let go and replaced with members who volunteered. I was one of them. We discovered the files incomplete and not organized. We spent one year organizing the files and refused to look for violations until the files were corrected. If someone complained, we would investigate and enforce if necessary. However, we did not go looking for violations.

A simple example where we literally chose to not enforce.

The following year we instituted a policy of an annual inspection when we would cite violations discovered. Members were given plenty of notice when the inspection would be and few violations are ever noted. We would then only do enforcement outside of the inspection process if a complaint from a member was received.
JanetB2 (Colorado)
Posts: 4,219
Posted:
Quote:
Posted By TimB4 on 05/04/2017 12:12 AM
Posted By JanetB2 on 05/03/2017 9:48 PM

The BOD's fiduciary obligation is to follow the contract, whether they may agree with items or not.


This is the members obligation as well.

You seem to imply that the Board must enforce.
However, a member has that same right and I think you will agree that the member is under no obligation to enforce. Yet, per the terms of the contract, both have the exact same right of enforcement. Therefore, logically (from my perspective) if one entity doesn't have to exercise their right of enforcement the other entity has that same option.


I would agree it is a member obligation as well. However, a member not enforcing another member cannot be sued by any other member nor the HOA for not enforcing. The difference is the HOA and the BOD can be sued for not enforcing and in some instances the injured party can add Violation of Fiduciary Duty to the lawsuit when they blatantly ignore violations. Keep in mind some insurances will not cover the BOD if found guilty for that violation. While the BOD can choose not to enforce ... they potentially can be held liable for failing to enforce and perform their duty.
LetA (Nevada)
Posts: 2,679
Posted:
This is one area where I would say pick your battles. Unless you personally were harmed by the HOA, I wouldn't file a suit.
Like many people here said, commercial vehicles should be defined by the BOD, if permissible.
Many blue collar workers have full size vans like the Econoline from Ford for business use, they're plumbers, electricians, Cable TV repairmen etc.
I can plainly see and it be plausible that you don't want panel vans, stake trucks, moving vans etc parked or stored in the HOA, those I can understand and my HOA
moved to clarify what is permissible.

Hope this helps.
JeremyM3 (North Carolina)
Posts: 122
Posted:
There's been some interesting updates I have to share.

The HOA president is not allowing me to vote on issues. The rest of the board is voting behind my back on things. Is this illegal?

1 member of the board has said he doesn't care if every single house paints it bright pink with polka-dots, he won't enforce it because he doesn't think it will hurt anyone else's property values.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Hoa's do NOT hold up property values. They are for keeping property ATTRACTIVE TO POTENTIAL BUYERS! Property values are based on REAL NUMBERS. The sale or foreclosure of homes of similar size/amenities have sold for in last 6 months in the surrounding area.

I once did not buy a house because hated the wallpaper. Did that lessen the home value? No. It made it less attractive to buy. HOAs are sales tools.

You seem stuck on legal. There is no HOA jail. You do not go to jail for HOA rule obeyence. You sue your HOA you sue yourself and your neighbors. Keep forcing the sue factor you will find yourself with more enemies and less money...

Former HOA President
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By JeremyM3 on 05/07/2017 7:08 PM

The HOA president is not allowing me to vote on issues. The rest of the board is voting behind my back on things. Is this illegal?

You were lawfully elected to a corporate board. The governing documents and state law refer to "the board" making decisions. The courts will enforce this.

1. Document all instances where your vote was denied, especially ones where your vote would have changed the outcome.

2. Raise this at the next open meeting. Do it even-toned and with completely sober voice. The point is to document that you asked. Ask the board to ensure all directors' votes are always solicited and counted. Document the next instance where you were denied a vote.

3. If no change, then send a letter of demand to the board. Wait two weeks.

4. If no change, then seek an injunction (this is much faster than a full-blown lawsuit).
KrisS1 (California)
Posts: 3
Posted:
Wow, I could have written your post as this is exactly what I was going through and have since resigned. Good luck.

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