Dealing with non-compliant Sheds

Walter

The first thing you will need is a published fining schedule, not a what do we feel like fining schedule.

Once that is set, I suggest a warning letter to those in violation offering a plan such as bring the shed to ARC standards or remove it and a time frame to do so or fines will commence.

If no responses/corrective action, then commence fining.

You are a long way from taking legal action at this point.

Assuming w/in your docs you have a process for seeking approval of and granting permission for improvements as well as a specification on sheds (size, materials, type, location, etc.).

You'd need a spec in order to determine non-compliance.

If all that's the case, then you follow the process in your docs (or if not there in state HOA law) as to how non-compliance/violations are treated. Or if no process in your docs, ensure Board has authority to establish processes, then create a reasonable one and establish IAW how your docs say that is to be done.

And yes, seeking legal assistance in my opinion is least desirable and should only be used as the last resort . . . unless the non-compliance/violation is so extreme that it may require legal assistance right away.

Typical processes include:
1) Identification of possible non-compliance (observation of violation, evidence, homeowner complaints, etc.).
2) Initial determination of non-compliance/violation (management and/or Board verify as much as possible that non-compliance/violation actually exists).
3) Notification to homeowner of non-compliance/violation. Includes invitation to a hearing, request to fix non-compliance/violation w/in reasonable timeframe, and commencement of fines if not fixed. (You need to have established a fining schedule IAW what your docs allow that indicates fine amounts and period between successive and increasing fines.)
4) If hearing requested, hearing is held . . . final determination . . . non-compliance/violation confirmed or negated.
- If negated, process complete. Document non-compliance/violation does not exist.
- If confirmed, reasonable timeframe to fix non-compliance/violation established. If not fixed w/in timeline, fines commence IAW schedule.
5) If hearing not requested, check for compliance at end of established timeframe.
- If fixed, all is good and process complete. Document fix of non-compliance/violation. (Violation/fine schedule should indicate what is done for repeat violations.)
- If not fixed, commence fining per your schedule with documentation of fine going to homeowner.
6) Establish at what point in your fine schedule you will seek legal assistance to collect fines and also make homeowner responsible for legal charges incurred during process.

Like GeorgeS21, I too want to know if you are referring to non-compliant sheds built, say, in the last few months. Or is your Board now going after non-compliant sheds that have existed for years?

I gather the cheap shed either (a) never had HOA approval or (b) is non-compliant both per the old rules and per the new ones. Since it has been there just a couple years, I think it's okay to enforce the covenant (old or new or both?) against it. Those cheap sheds still can run $1000 or so. I expect some feathers may be ruffled and your board may have to decide how aggressive it wants to be in this instance. Else I think everyone else's remarks about fining seem right on to me.

Walter

I do not like sheds, that said be sure to limit/control them in many ways Some Ideas:

1. No metal sheds. Sheds must be wood or vinyl.
2. No larger than 10x10.
3. No taller than 8ft to the peak.
4. No lean to types attached to the house.
5. No more than one shed per lot.
6. Some restrictions where they can be placed especially only behind a house.
7. Seen restrictions where the shed must not be visible from the other side of the street.
8. Seen some restrictions that the shed surface must match that of the house in material and color.
9. Doors and windows must match the style of those on the house.
10. Shed must be anchored to the ground.

If you do not control it, the neighborhood will look tacky.

Note, our neighborhood is already fairly run down -- e.g. our uniform mailboxes are very shabby/muddy looking already. We have dozens of maintenance issues that could be called out. And our home price is barely below the median price for all houses in the area (even non-HOA's). Our typical neighbor is blue collar, and could care less about having a HOA. Most are annoyed by the HOA.

We're planning to allow wooden/matching/shingled sheds, as well as smaller resin (e.g Suncast/LifeTime) sheds. For wooden/shingled, can be 12x12; but for the resin ones, max size is 80 sqFt (e.g. 8x10).

So we're not concerned really about it looking "tacky", and resin sheds won't look out of place here, although we'll have extra stipulations for them to be more concealed, perhaps, so that they don't stand out.

Overall sheds here will raise home values, since average house size is 1700 sqFt (small) and most people want a good place to store their mower/garden/tool stuff besides the garage.

The "Cheap Shed" that I mentioned is a 6'x4' aluminum shed 7' tall, but you can see it from the road. It looks nice, and no one has complained about it.

Prior to the planned amendment "no sheds" was the standard.

If we're going to start enforcing the new spec, then I suppose we have to retroactively enforce against this small cheap shed too. But we might just add into the spec something that covers their aluminum shed specifically (e.g. smaller than 25 sqFt, aluminum, 7' tall tucked against the house, but must be in excellent repair or must be removed".... something like that. If someone else wanted to do the same thing, it really wouldn't look bad.. and being butted up against their house gives it more stability.

Before we do that, I'll talk to this neighbor and see how they feel about removing it... they have already told me that they have a new resin shed that they want to put up (this couple just moved in 6 months ago, and brought a resin shed with them). They might be amenable to taking the other one down. We'll see.

We are very relaxed here, for the most part. And we plan to keep it that way.

Even so, given that our covenants say "no sheds", no one dared spend much money on a real shed, for fear of having to remove it and lose all that money. A half dozen of us have the SunCast resin sheds that are only 4.5' tall and tucked behind our privacy fences. That's how some of us have dealt with this clause. (it allows us to store our mower/gas, and a few other tools/things in it).

Thanks for all the advice!

NOTE - we're not really "waking up" here. We're officially becoming "more relaxed", but want to ensure we have a plan to do so in a controlled fashion. In the past, threat letters have been "enough" to get most to comply on big issues, and also this threat has prevented anyone from investing into nice sheds.

And so, as we start to allow certain types of sheds, as a part of this amendment movement, we need to communicate to everyone how we plan to "enforce the spec".

It sounds like "fines" is the way to do it.

Does your HOA have an architectural committee? Weren't homeowners required to submit plans to the committee for approval?

Walter

1. For how long can the fining process continue? Can it go on monthly, until the issue is rectified? And is this an appropriate way to handle it (i.e. apply the pressure for them to remove the offense).

Fines can go on forever and cumulate if so defined in your Published Fining Schedule.

2. Where are the allowable places for documenting this fee process? (ByLaws, or a separate ARC-published document?)

All you have to do is draw up a Fining Schedule. Like making a Rule & Regulation.

The whole catch is your Covenants have to allow for fining. If allowed, you then can set the amount and interval. In some states the fines can be used to lien a property. Notice I said some states.

My take: Lien with the option to take the member to court. You are correct that one does not usually collect on a lien until the member wants to sell her or his house. But liens are not messy. Suing in court is messy and also cost-prohibitive. The one HOA manager I respect in my town was clear: Lien.

Good questions.

In Indiana, there's case law prohibiting fines by HOAs - don't remember when it came down, but the judge in the case ruled the HOA couldn't do it because they aren't government agencies. Silly, I know, but the state legislature hasn't gotten around to addressing the issue, despite now having a statute dealing with HOAs.

Of course, lots of HOAs do it - I heard you have to call it something else to get around the case law, but I'd definitely check with your association attorney because you want a policy that will stick. He or she can also tell you if a lien or civil suit would be more effective, although personally, I think I'd prefer a lawsuit. You could do it in Small Claims Court to save money.

WalterH4, does your HOA's covenant on enforcement read like the following?

"Right of Enforcement. Violation or threatened violation of any of the covenants, conditions or restrictions enumerated in this Declaration or in any Plat of all or any part of the Real Estate shall be grounds for an action by Developer, the Association, any Owner, and all persons or entities claiming under them, against the person or entity violating or threatening to violate any such covenants, conditions or restrictions. Available relief in any such action shall include recovery of damages or other sums due for such violation, injunctive relief against any such violation or threatened violation, declaratory relief and the recovery of costs and reasonable attorneys’ fees incurred by any party successfully enforcing such covenants and restrictions; provided, however, that neither Developer nor the Association shall be liable for damages of any kind to any person for failing to enforce or carry out any such covenants, conditions or restrictions."

From my general legal reading, I believe "an action by [such and such] against [the violator of a covenant]" et cetera refers to filing suit. The filing of a suit is the "action." I do not believe this sentence (regarding "an action") gives the authority to fine.

The phrase "Available relief in any such action shall include recovery of damages or other sums due for such violation... " suggests to me that "other sums" may includes fines. But I do not feel confident about this. If you folks are working with an attorney at all, and if the above is in fact your HOA's covenant on enforcement, I wonder if this sentence would get the attorney's attention.

I will research a bit on what Indiana courts have said.

I welcome the thoughts of the others here at hoatalk who are experienced with HOA law.

Then it sounds like you are good to go for developing a schedule of fines and imposing same. (The Indiana HOA's covenants I am viewing never use the word "fine" or "fines." So it appears I am not looking at your HOA's covenants. The HOA covenant wording in Indiana does often appear to be word for word the same. I do not think I would say anything about liens or lawsuits in whatever schedule of fines you are developing. Instead, I would just say something like, "This schedule of fines does not remove rights reserved to the Homeowners' Association under the Declaration and state law." Hopefully your board is working with an attorney and he or she can nail the language. HOAs must give much warning when they intend to file a lawsuit. Assuming your Board is guided by an attorney, the attorney will not let your HOA take any member by surprise if the Board chooses to take a member to court for fines owed. Judges expect no less.

On a more general note and as interested, these Indiana Appeals Court decisions might be worth skimming:

https://www.courtlistener.com/opinion/2115355/holliday-v-crooked-creek-villages-homeowners-assoc-inc/?

https://www.in.gov/judiciary/opinions/pdf/11170605ewn.pdf

The net has chatter about a 2015 law Indiana passed, referred to as H.E.A. 1286. Some say it restricts HOA fines. I read it and so far, I do not see any such wording. As I posted earlier, from what a few Indiana law firms say, it seems fines are allowed, at least when the covenants authorize them.

You're welcome.