Liens and voting for dues increase? Help make sense of this law?

Started by AdamL1 • 8 replies • 286 views

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AdamL1 (UnitedStates)
Posts: 559

Posted:

Idaho Statute 45-810.7.e
https://legislature.idaho.gov/statutesrules/idstat/title45/t45ch8/sect45-810/

So trying to understand what this law means and how it affects HOA's.

From my understanding, it is saying that an HOA can only initiate a lien against a member if the Bylaws conform to these requirements (holding an annual meeting, notice, recording, method to amend fees, and provision that all increases must have a majority membership vote).

Can anyone else help me interpret this? It seems that an HOA can do whatever they want like raise dues to $1M, but the only way to collect and lien is if they make the Bylaws conform to statute.

AugustinD
Posts: 3,698

Posted:

AdamL1, I read the statute section you linked. I agree with your interpretation of this statute section.

"Better writing" suggestion: Omit the "So" that starts so many of your posts and sentences. It is redundant.

AdamL1 (UnitedStates)
Posts: 559

Posted:

This seems a bit of an odd statute to write. It only controls Bylaws if an HOA wants to do debt collection, but doesn't actually require an HOA to comply with these standards?

*SO* ;) what happens if members all just stop paying assessments because they know there's no ability to enforce and collect?

seems like an odd law.

Any thoughts about the "unincorporated" term used in there?

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By AdamL1 on 01/10/2022 9:34 AM
This seems a bit of an odd statute to write. It only controls Bylaws if an HOA wants to do debt collection, but doesn't actually require an HOA to comply with these standards?

First, the Bylaws are enforceable as contractual terms. Second, the Bylaws and/or CC&Rs may state that violations of the Bylaws are enforceable in the courts. Third, Idaho statutes may have a separate section stating that an owner has a remedy in the courts for violations of the Bylaws. I have not looked for it.

Quote:

Posted By AdamL1 on 01/10/2022 9:34 AM
Any thoughts about the "unincorporated" term used in there?

Oops; I missed the "unincorporated" the first time I read the statute section. I believe your HOA is incorporated. Part (7) does not apply to your (incorporated) HOA.

AdamL1 (UnitedStates)
Posts: 559

Posted:

how would an HOA not be incorporated? Aren't they all 'non-profit' corporations, with Articles of Incorporation and Bylaws?

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By AdamL1 on 01/10/2022 10:00 AM
how would an HOA not be incorporated? Aren't they all 'non-profit' corporations, with Articles of Incorporation and Bylaws?

In Idaho for one, no, they do not have to be incorporated. One way for a HOA to be un-incorporated is when the developer never filed articles of incorporation with the Idaho Secretary of State et cetera. The Idaho nonprofit corporation statute will not apply to such a HOA.

The statute section you cited even speaks, to a degree, to the legitimacy of unincorporated HOAs as follows:

(6) As used in this section, "homeowner’s association" means any incorporated or unincorporated association:
(a) In which membership is based upon owning or possessing an interest in real property; and
(b) That has the authority, pursuant to recorded covenants, bylaws or other governing instruments, to assess and record liens against the real property of its members.

Idaho has a Condominium statute. Idaho does not appear to have a non-condo HOA statute.

AdamL1 (UnitedStates)
Posts: 559

Posted:

yes, I saw section 6. Not quite sure how that squares with section 7.

Section 7 talks about unincorporated HOA's, but section 6 seems to say they are all the same thing.

AugustinD
Posts: 3,698

Posted:

My take:

For an incorporated HOA to lawfully apply sections (1) through (5), the incorporated HOA must meet the requirements listed under Section (6).

For an unincorporated HOA to lawfully apply sections (1) through (5), the unincorporated HOA must meet the requirements listed under both Section (6) and Section (7).

In other words, Section (6) and Section (7) place limitations on when Sections (1) through (5) may be applied.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

The law appears to lock down that concept of an HOA where, if it's not incorporated, then the HOA must have public policies outlined in Section 7. To me, it basically prevents rogue actions from a bunch of neighbors against a person because there must be a record of HOA operations and structure.

If you're an incorporated HOA, then section 7 doesn't apply to your situation.

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