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Avoiding Mistakes That Self-Managed HOAs Usually Make

Self-managed Homeowners Associations or Condominium Associations are designated as non-profit organizations that must function in accord with certain state laws and the Associations’ governing documents. No exceptions. However, a newly elected Board can read state law or a set of governing documents and have different interpretations of them. This is due to the biases that individuals have when they read anything, including a newspaper. Typically, a reader will pick up on the facts that are consistent with his or her own beliefs which are problematic if they violate the law or the governing documents. (I have served on, or helped, enough Boards to know this is usually the first problem a self-managed Association of a non-profit organization should want to avoid because if some policies that are adopted an implemented are illegal, it can be difficult to reverse them. An Example follows.

I know of one self-managed HOA that has a set of governing documents that must be strictly enforced. However, the first thing the first Board of Directors did in 2005 was to adopt amendments to the original View Preservation Plan that violated Section 1 (Purpose) of the Architectural Control Standards and Regulations), violated Section 6.2 of the CC&R that prohibited most of the trees in the HOA’s common Areas from being disturbed; and violated Sections 3.3 and 9.6 of the CC&R that granted the authority to amend all documents except the Bylaws to the lot owners who must approve changes by super-majority (75%) of the lot owners. This Board failed to notify the lot owners before or after it started to implement the amended governing document, with no more thought than if it had decided to change the provider of lawn-care services to a different provider. It took until 2016 before one non-resident owner of a vacant lot realized that trees in the common areas had been removed; and that the base of the HOA was being damaged repeatedly by surface water runoff that was costly to repair. Moreover, surface water runoff had not been a problem until 2010.

Imagine if you will, an HOA developed on a steeply sloped, heavily forested piece of land that is designed for 85 residential lots, 20 of which are located at the base of the HOA. The CC&R and original View Preservation Plan prohibited the removal trees from the sloped common areas; but after the Board amended this Plan, native trees were removed so that the views created for homeowners would be improved substantially as depicted in Figures 1 and 2 below.

Figure 1- view Created from Original VPP