HOA: Friend or Foe?
July 20, 2015
Written by: Denise Holliday, Esq.
Attorney, Hull, Holliday & Holliday PLC
When people first move into a neighborhood with a Homeowner’s Association (“HOA”), they will likely read the Covenants, Conditions and Restrictions (“CCR’s) from beginning to end in order to understand how to be good neighbors to their community. They don’t see the HOA as an adversary, but as an asset to maintaining their beautiful slice of the American dream. They see it as every member’s duty and privilege to understand and work with the HOA. Too often that relationship deteriorates over time until the HOA is seen as the enemy of the individual homeowner.
For example, in my neighborhood, we have “cluster” mailboxes. The mail is not delivered to the individual house, but to a set of mailboxes placed throughout the neighborhood. My cluster is actually just off my property line. That’s great because I only have to walk to the end of my driveway to get my mail. It has also been the source of some contention with the postal service and the HOA. My HOA demands that I place my garbage can on the street, on the south side of my property, between my driveway and my property line. That happens to be where the mail carrier likes to park his vehicle while he loads the cluster boxes. Twice a week, for many years, there has been this ongoing debate with the HOA demanding I place my garbage can and recyclables can in that spot, and the mail carrier demanding that I not interfere with his ability to deliver the mail. It even got to the point where the mail carrier stated that he worked for the federal government and I had to comply immediately. I simply responded that, given the choice, I would rather fight the federal government than my HOA because I would probably have a better chance of winning.
When your neighbor wants to do something to his house that is outside the confines of the CCR’s, the HOA is an effective ally in saving the neighborhood from urban plight. When you want to do something to your house that is outside the confines of the CCR’s, the HOA is a Nazi regime trying to destroy the rights of individual property owners. It’s all a matter of perspective. Add rental properties into the mix, and the level of contention greatly increases.
When a homeowner wants to convert the property to a rental, how far can the HOA reach to protect the neighborhood? Should the HOA be able to dictate who can rent property in the community? Can the HOA require the homeowner/landlord to give the HOA detailed information on any prospective tenant such as the lease agreement, criminal history, and credit report? When can an HOA fine a homeowner/landlord for the actions or inactions of the tenant?
Recently, the Arizona legislature explored many of these issues regarding the powers and responsibilities of HOA’s and homeowner/landlords. SB 1454 was a hotly contested bill that significantly impacted the HOA’s ability to govern rental property issues.
Many homeowner/landlords use property management companies to manage the rental property on their behalf. With the passing of SB 1454, a property management company can now deal directly with the HOA for issues regarding the rental property. Prior to this legislation, only the homeowner could address HOA issues.
The bill also set limits on tenant information an owner is required to disclose to the HOA, and prohibits the HOA from seeking private, confidential information, such as social security numbers. In addition, an HOA cannot assess a fine or fee on rental property that is different than a fine or fee that would be charged to an owner-occupied unit. Prior to this legislation, an HOA was able to prevent a homeowner/landlord from sitting on the HOA board for the simple reason that they do not occupy the unit. That is no longer the case. Such a scenario is now prohibited.
These are a few highlights of the recent changes in the law regarding HOA’s. Any homeowner/landlord or property management company would be well served in exploring these issues more deeply. If you are interested in delving further into the state of the law governing HOA’s, the Arizona School of Real Estate & Business is presenting a seminar on this topic on September 27, 2013 from 9:00 am – 1:00 pm. The seminar will feature a panel of attorneys and property management professionals discussing these issues and many other aspects of this important area of law that impacts such a wide cross-section of our society. Understanding the laws governing HOA’s can relieve some of the tension between the HOA, the individual homeowners, the property management company and the tenant and allow the members of the community and the HOA to coexist and even prosper.
Denise Holliday is an attorney with Hull, Holliday & Holliday PLC and can be reached at 602-230-0088.
Join Denise Holliday and some of Arizona’s prominent HOA attorneys & property managers who will discuss HOAs and how best to avoid some of those nightmare stories of home ownership within an HOA.
NW Valley Seminar: HOAs- The Good, The Bad and The… Friday, July 24, 9:00am to 12:30pm.. Tuition: $40. Credit: 3 hours Disclosure.