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Suburban Dissent

When it’s you vs. your HOA

You may own your home, but your homeowners’ association (HOA) owns your whole neighborhood. Homeowners’ associations are ruled by a vote of the majority and aim to keep the peace in the neighborhood, but what happens when you disagree with the rules? Lenard Rioth, with Anderson, Dude & Lebel, says that, when disputes arise, “homeowners’ associations have certain rights and abilities under their governing documents to resolve disputes internally before appealing to a higher court.” 

HOAs are created through the process of writing the declaration of covenants, conditions, and restrictions (CC&Rs), which are the governing documents written, in most cases, by the original developer of the neighborhood. For all intents and purposes, the purchase of a home that belongs to a homeowners’ association is a binding contract between the homeowner and the HOA. This contract indicates that the homeowner agrees to abide by the HOA’s CC&Rs.

HOAs are ruled by a group of board members who are elected annually by a vote of the majority. All dues-paying members of the HOA are eligible to vote, and the Colorado Common Interest Ownership Act (CCIOA), which is the state statute that applies directly to HOAs, defines the majority as at least 67% of voters in agreement. In some sense, the homeowner is at the mercy of the HOA and its CC&Rs; however, HOAs are subject to state statutes (such as the CCIOA), federal laws, and local laws that keep HOAs from creating and enforcing unreasonable rules. Even though there are laws preventing the enactment of unreasonable rules within HOAs, disputes between homeowners and HOAs are far from uncommon. Each HOA’s CC&Rs have their own defined procedures for when a homeowner violates or disagrees with a rule. The most common course of action when a dispute arises is either mediation/arbitration or an informal hearing in front of the elected board of the HOA. Rulings on this level are determined by a fair and impartial judge within the HOA. Typically, HOAs are able to settle their disputes internally. The ruling of the HOA is not necessarily the final say on the matter, however. As Rioth says, “The ruling of a lower court can always be appealed to a higher court.” 

If the dispute is not settled to the homeowner’s satisfaction at the informal hearing or if the homeowner believes that the HOA is in violation of federal, state, and/or local laws regulating HOAs, then the homeowner has the right to a formal court hearing. Because of the exorbitant cost of court proceedings and the nonprofit nature of HOAs, internal conflict resolution is preferred by HOAs, and there are established alternative dispute resolution procedures included in the CC&Rs to keep disputes from progressing to formal courts. Generally, throughout the process of mediation and the informal hearing, homeowners and HOAs will agree to stipulations by which they will compromise as long as certain agreed-upon conditions are met moving forward.

Although homeowners’ associations can infringe on your personal freedom by dictating the way your lawn should be kept and where you can park, HOAs also protect the interests of the whole and facilitate peaceful coexistence with your neighbors. HOAs can be a homeowner’s best friend or worst nightmare. The most important thing to do when considering buying a home that is governed by a homeowners’ association is to carefully read and reread the HOA’s CC&Rs to determine whether the community you would be joining is a good fit for your lifestyle to avoid disputes altogether. Should you find yourself in dispute with your HOA, it never hurts to consult a lawyer as you go into conflict-resolution proceedings.