Suing HOA in small claims court

I was wondering if anyone knows of a community where homeowners have sued the HOA in small claims court over loss of rights. Our current Board is gradually reducing our rights by flouting state disclosure laws and, most recently, limiting the number of volunteers on various advisory committees which, in the past, have been open to all and have had an important say on things like architectural changes and landscaping. The limitations would effectively block over half of residents from serving on any committees at all at a given time, and could allow the board members to hand-pick committees to rubber-stamp their personal architectural or landscaping proposals which would be detrimental to the appearance of our community.

Since these rights are part of our dues under our bylaws and state law, we were thinking of assigning a monetary value to them and then having individual homeowners sue the board for that amount in small claims court. This would keep court costs down for all and get our grievances before a judge, assuming that our tactic would be deemed serious and not frivolous.

Any thoughts? Thanks.

David,

I agree that there are times that one needs to involve the courts. However, that should be as a last resort.

I'm not sure what you mean by "flouting State disclosure laws." Granted, flouting means disregarding, specifics would be good. Perhaps with a reference to the statute in question.

Regarding committees, it is typical that most Associations have committee members who serve at the pleasure of the Board. Meaning, individuals are appointed to and, if needed, removed from the committee by a simple vote at board meetings.

Per NY courts small claims handbook, you cannot sue in Small Claims Court to force a person or business to perform a task, such as to fix a damaged item, or to fulfill a promise made in an advertisement. The court may not order the return of a personal item. Your lawsuit may be for money only.

Therefore, even if the court initially agreed to hear your complaints, the Associations attorney would immediately file a motion that you are in the wrong court and, I suspect, the court would agree.

Without specifics, the flouting of disclosure laws would be addressed in civil court. Who serves on committees would also be addressed in civil court. However, since committee members serve at the pleasure of the board, I think this would be an exercise in futility for that action.

As Melissia pointed out, the best way to correct those issues you have described is to gather volunteers, support from the membership and vote the current board out. This way, the statutes can be followed and that Board can establish procedures on how committee members are appointed. Perhaps even changing the governing documents to allow for elections to specific committees.

David, any competent HOA attorney will advise that the most efficient and surest way to cause change at a HOA is to get a like-minded majority on the board. The courts are an option, but going this route takes a lot of time and energy. If one goes pro se, plan on having a roughly half-time job addressing this in court for a couple of years.

You could start by sending letters of demand to the board for the specific things your group wants. Then focus on getting new people on the board.

Oh, the advice is much appreciated. I thank each of you. We are a small community under 60 homes, however, and a number of us have been taken aback at how many homeowners seem to be fine with (or ignorant of) the self-dealing and corruption at everyone’s expense. Some of us who served on the last honest Board have been appalled at the incredible rudeness and ignorance of some of our neighbors. (Imagine, as a female board member, giving a thorough and honest report to the community at a general meeting and hearing the “B” word being uttered from the back of the room.). The cancer I spoke of who now rules things has bragged in the past of how many times he has been sued, as if it is a mark of honor. I can tell you that he is totally ignorant of state and local laws that apply to us, or he simply doesn’t care. All of his efforts are aimed at gaining approval to surround his home with shrubs and trees on common property as if he still lives on a private plot of land. Once this is done, it will create an eyesore for the rest of us and diminish our property values. And it will encourage some of the other vile neighbors to also flout the rules with a go-ahead-and-sue-me attitude.

I have heard worse horror stories at other HOAs, but you would really have to walk in our shoes and understand the backgrounds of some of the players to grasp the mess we’ve got here.

Twice before, our landscape committee and the boards denied him a wall of trees that would have had the place looking like the Canadian Rockies and obstructed views for several of us. Undeterred, he got himself elected by cheating (gathering proxies from elderly homeowners, including blanks) and got the Board to restrict membership on the landscape committee to five of his hand-picked people. He'll pay for the trees himself. He'll just use common land. In October, he changed out plantings on common land near his home without permission.

This is the same person who got a prior board to permit him to install his own private sprinkler system (separate from the community system), in which he had his own controller (to irrigate at times of day not permitted by our city) but used the main water source paid for by all of us. This is at a time when the cost of water has been a big issue in the community and yet when this breach of ethics was revealed (including a very negative opinion from the Association's attorney), no one seemed to care except for a small group of us.

As for community votes in our bylaws, it is a majority to elect five board members each year and two-thirds to either amend the bylaws or remove a director. There are no other community votes, although there should be.

Douglas, thanks for your advice. Except for the attorney, it would be very helpful in a normal community. That's not us. We have a board president who's breaking more rules than everyone else combined.

David, your community, if governed by CC&R's recorded with the county and attached to your deed, is no different than mine.

My community has a four person board that does most of it's business through texting and emails. They use their text sessions and emails as "meetings" that are required each quarter. The president makes decisions often without even talking to other board members, sometimes he spends money on things for the neighborhood common area and submits the receipts for reimbursement, or to use as credit against assessments, without prior approval. It happens everywhere. The difference is our president is acting in the best interest of the community and yours either isn't, or is doing things that YOU disagree with. It is impossible for any BOD to please everyone.

The thing to remember in any court action is you have to ask the court for something. What would you be asking the court for? If the governing documents prevent the trees, or require a vote for that type of change, or that much money spent, you can ask the courts to stop the project, but you'll have to wait till the project starts.

If the guy has been sued numerous times and prevails, I'd be careful. He may know what he's doing.

The water issue could very well be reason to sue. I would ask for the minutes of the meetings where approval was given for the use of common water on private property.

Sorry I'm breaking this up into many posts. I have a sketchy connection today.

STOP with this nonsense!

WOW..that makes me all warm and fuzzy.

This is a huge problem regardless of the circumstances. Our president went rogue on a couple of issues last spring. The rest of the board let him get away with it because none of them wanted to be president. They don't care. A lot of homeowners aren't happy with the situation but they couldn't be bothered to run for the board themselves later this month. We won't even have an election because we've got 5 vacancies and only 4 people interested in filling them. The bottom line is there just aren't enough people who give a shirt. That's a tough nut to crack.

What does your latest post have to do with the OP, Melissa?

You're clueless Melissa. Someone that has experience in the mortgage industry needs to school you.

When I was talking about home values, I was speaking about the impressions of potential buyers and not whether one could prevail in court. I don’t want a potential buyer to look out my window at a grotesque row of huge evergreens, make a face and move on to the next house. With all our acreage, people want to see vistas from their windows. To potential buyers, the row of trees might as well be a row of junked cars.

And, yes, the HOA has some effect on property values if it is charged with maintaining the community’s appearance. We looked at a nearby complex with nice enough homes, but the roads, curbs, lawns and siding were in kind of rough shape. I said to my wife, “This place is short of money,” and we moved on. Months later, I learned I was right.

Another concern we have is that our clubhouse and pool area are being neglected because so much money is being misspent elsewhere. The cancer who heads our Board doesn’t swim. I was the one to discover last summer that our pool was going without chlorine and mandated safety items. Meanwhile, a new complex is being built next door with a fabulous new pool and clubhouse. Where do you think potential buyers will want to go?

And that will be the last time I address home values with you.

Again the look of your house is NOT a HOME VALUE!!! It is how ATTRACTIVE your home is to a potential buyer. Home Values are based on REAL solid numbers. It's NOT fantasy or wishful thinking. It is real solid 100% based on REAL numbers!!! Your HOA does NOT protect the REAL Value of your home. It helps in making your home ATTRACTIVE to make it's potential of getting it's real value.

It is you ALL that can't seem to get the concept. If you buy a corvette and join a corvette club, does the club make sure your corvette sells at Kelly Blue book? The HOA is the club. The corvette is the home/property. The Kelly Blue book is the REAL numbers. Can't make it more simple than that...

Value, especially in homes, can have many different meanings.

There is the appraised value an evaluation of a property's value based on a given point in time that is performed by a professional appraiser during the mortgage origination process. (which I believe Melissa is referring to)

There is the assessed value the dollar value assigned to a property to measure applicable taxes.(which every homeowner wants to be as low as possible)

There is the market value The price an asset would fetch in the marketplace. (which most of those in disagreement with Melissa are referring to)

There is sentimental value The value of an object deriving from personal or emotional associations rather than material worth (which can influence the market value.

There is value in use: the market value of a going concern that reflects a value to
a particular user

Lets not forget investment value The value of property to a particular investor, or a class of investors, for identified investment objectives

I do believe that everyone concurs that an HOA does (generally) affect curb appeal. I also believe that everyone can concur that curb appeal plays an important role in property valuation. Be it by bringing in more buyers wanting the property (which can increase the market value of the home) or something else.

Depending on what type of value one is discussing, arguments can be made that HOAs have a great, little or no influence on the value of a property.

Hers is more info if interested:

Appraised Value vs. Assessed Value – What’s the Difference?

YOUR HOME; Market vs. Appraisal: What's the Real Value?

Sale Price vs. Appraised (or Market) Value

Defining Standards of Value

Arguing with Melissa is a lot like competing in the special Olympics. Even if you win, you're retarded.

No offense intended with that, it's just how I feel.

Point taken. My Apologies.

I support the Special Olympics every year when they do their big bike run here. I knew there was a chance it would land on someones nerve. Sorry.

PLEASE, give it a rest!

My overall point to all of this is that proving your HOA made your home sell for less money than it's "Worth" in a court of law is difficult or frivolous. Court is to ONLY make you "Whole". How do you prove it was your HOA's fault that your 3 bedroom 2 bath house you paid $100K sold at 90K because they did not hold up your home values?

You sue the HOA for that 10K loss? Now prove it. Did other houses sell for less? If so, were they foreclosures or short sales? Did you have potential buyers who in writing state they did buy your home because the HOA did not maintain/enforce a rule?

You also have to realize your no longer a member of the HOA your suing, as you sold your home. The house has to sale to prove your damages.

I am in no way saying a HOA doesn't effect home sales or bringing in potential buyers. They do bring in the conformity and attractiveness of amenities. It's just a misnomer if you believe "Home values" maintaining/improving is what one does.

Kerry,

The point, as I see it, Melissa is making is based on the OP wanting to take their Association to court stating that Those against him [the President] fear he will permanently damage the community and our property values.

Based on that thought process, Melissa was, I believe, attempting to point out that it would be next to impossible to prove by what dollar amount the HOA damaged the property value (vs. some other factor affecting the value).

Exactly Tim. The OP said they wanted to sue their HOA and assign it a monetary value for what they perceive is affecting their "Home values". To state this is too broad of a statement. It is way too subjective. Proving it in a court of law requires proof of REAL monetary damages. That would require one selling their home for a loss or denied the sale directly related to the actions of the HOA/Board member.

That is basically what the OP is wanting to do. Sue their HOA for damages for loss of a theoretical sales price. You can't arbitrarily assign a sale price. It has to be based in reality. Which Home Values are based in a certain range of what similar homes sell for in a determined radius area. Going to court and saying "I put a million dollars asking price on my home but it sold at $500K. The HOA now owes me $500K." However, ALL the homes in the HOA only are valued at $500K range. The court is going to ask you to PROVE the HOA was directly involved in you not getting your asking price.

All of you that want to sue their HOA, have a few hard realities when doing so. I am going to point them out to you. Don't like it, then don't like it. A court can only make you whole. The burden of proof is on you. You have to prove damages. Making large broad statements like "My HOA is responsible for my home values" comes with a reality check.

First posting:


Combined with his second post:


Granted, it's a leap but not a big leap.

Personally, I think David, the OP, was venting frustration.
He seems to know what has to be done - gather support and vote the bums out - but fears that won't occur and was looking at other options.