Tag Archives: Association

Recent HOA News


 

By: Michael Miller | WJBF-TV
Published: September 24, 2012

The Millshaven Property Owners Association is suing Becky Rogers-Peck over the pink playhouse in her yard built for her granddaughter. The Association says the color of the playhouse violates the covenant that Rogers-Peck signed. She has until October 5th to respond.

And, of course, this is not the first time a local homeowners association (HOA) has made national headlines. Last summer the Knob Hill subdivision in Evans battled with the group Homes for Our Troops over their plans to build a house for a paralyzed Iraq war veteran. The home ended up being built in Appling.

Also last year, in Richmond County, the Summerville Neighborhood Association lost its fight to keep Woodlawn United Methodist Church from opening a day care. Opponents said it was a business operating in a residential district. That case made it all the way to court which sided with the day care. All of which has some asking… are homeowners associations a good thing… or a bad thing?

It’s a question homebuyers need to ask themselves before they start hunting for a house. Should you live in a covenant community or not? A covenant neighborhood may be good for some, but for others, it may place too many restrictions on what you can and can’t do to your home.

As Jimmy J. Jennings walks his dogs through his neighborhood, he says he doesn’t have much to gripe about.

“One of the requirements was that we wanted to live in a neighborhood with covenants because we’ve always believe that covenants keep the value of your property up,” he says.

Jennings has lived in his home in the Springlakes subdivision for 25 years. Springlakes has a homeowners association which has several covenant restrictions.

Jennings says, “and when you drive through the neighborhood, I mean, one of the first things you see is how clean the streets are, the lawns, the driveways. And I think that’s a big plus for potential buyers that want to come in here.”

When a homeowner purchases a house in a covenant community, they have to abide by those rules and guidelines, if they don’t, they could be taken to court by the homeowner’s association. Jennings says some of his covenants include restrictions on tree-cutting, fence installation, and even where you can store a boat.

“The boat cannot be parked in a position on your lot that, as the covenants will say, is generally visible from the street,” he says.

Less than 2 miles away from Jennings, Lee Bailey lives in a neighborhood without covenants — and he gets to keep his boat right in his front yard. He says he use to live in a neighborhood that had a homeowner’s association.

“It has its good things and its bad things. What I don’t like about it is the nosiness,” Bailey says.

Bailey says although he doesn’t like the policing of the covenants, he does understand why they are in place.

“When you have a house that is this value, you don’t want it brought down by the neighbor who has his junkyard in, ya know, it will bring it down,” he says.

Jimmy J. Jennings says that sometimes homeowners associations can request that a homeowner must pay for the court costs of both parties. Which means, it could cost you a lot of money to fight a covenant restriction.

 

Association Boards, Things You Should Have Learned From the News


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Here are examples of a few lessons that should have been learned by reading the newspapers:

  • There is no substitute for good financial management and a solid reserve program.

The combination of foreclosures, budget deficits, embezzlement and the inability to continue with the maintenance was felt in Community Associations across the country. Those Associations which had to cut corners, or assessments, are often found in deeper problems, and in some extreme cases, in the street. This is the time to be smart.

  • Disasters happen – do not bet the HOA that you will be spared.

The last two years have seen not only a financial disaster hit the U.S., but also a string of natural disasters that have severely affected a large number of Homeowner and Condominium Associations. Many did not have flood insurance, or increased deductible or lower limits of their insurance coverage. Many canceled special policies that covered hurricane, earthquake, wind or other things that they hoped would miss them. Too often, it was the wrong bet. As a result, some organizations simply disappeared, owners forced to leave, the units condemned, without any hope of recovery. Some had to sell the buildings damaged at a great loss and move on. Others had to live for months outside the homes in hotels with only some or none of the costs covered, while the Board has wrestled with insurance companies, contractors and the courts. Insurance is one of the most important things that boards have to deal with.  Do not bet on the future of the Association, Mother nature may try to ignore you.

  • Find a way to deal with “going green“, without confusion, expense and visibility.

In nature (and often the CC & R), Associations,  are resistant to change. But this is not going away, and the Association is almost always going to come through to look bad when they resist any change. Clothes lines, solar panels, false grass, landscaping and other items are only the beginning. Start with an owners vote on how they feel about various issues and real information (not just rumors) about how they will help and what are the options. It can be a single owner that poses a problem, but you can expect many more to follow.

  • Flags cause problems – no flags allowed at all causes even more problems.

If you allow the U.S. flag to fly on holidays with a bracket attached to the unit / home, you can almost count on someone  pushing to do more. They want to fly the flag every day, on a pole 20 feet in front of your unit / home, or a service flag for the Navy or Marine, or the stars in the windows to show a family in danger, or flag college game day, etc, etc, etc. Someone will always push the envelope. Again, just survey the residents and see what is the general consensus, which the majority will support. This is not only an individual problem, the Board must decide and then publish.

  • If you’re not active on the internet, it is very likely you will be found “on” the internet.

The number of sites created by the owner of the individual to attack or publish less than favorable information about your Association has grown exponentially. You can get on the Internet for almost no cost and see what is published can  stay forever. Transparency of operations and multiple methods of communication must be a primary consideration of the board. Do not keep putting it off. Get connected now.

  • State legislatures will cost the HOA more money unless the owners SHOW UP.

Since there is very little actual data about Associations and owners available, state legislators often act due to the squeakiest wheel, usually one or two owners who have beaten their heads with the Board. Who is really to blame rarely counts.  It is what you can give a legislator in particular. The positive exposure usually results in bills that will cost money from the owners. Boards should be aware of how legislation will impact the potential of the Association and all owners and find a way to voice their position.

Riverside Property Management, Inc. is a leading provider of financial reporting, maintenance and governance, legal collection procedures and management consulting services for Homeowners Associations and Conominiums in the Atlanta Metro area..

Our clients include homeowners associations and developers of multi-family, owner-occupied housing throughout the Atlanta Metro area.

Our team includes certified Professional Community Managers (PCAM), Licensed Real Eastate Agents (RES) and a Board Certified Collection Attorney (ESQ), licensed in Georgia, who all specialize in maintaining property condition, collection of  assessments and enforcement of existing Covenants.  Individual consultations, management reviews and educational workshops for association boards, to help improve their community governance skills.

We also provide critical budget and financial planning tools that include reserve studies and budget projections for maintenance and repair costs of community owned assets.

Detailed reserve studies and maintenance plans prepared in conjunction with our consulting architect are one of the most valuable management tools available for any association. If you are interested in long range financial planning and supervised maintenance of community assets, our services will be of benefit to your association.

Developers will find our company invaluable when planning a new construction or conversion project. Reserve studies, maintenance plans and operating budgets required for all newly formed associations are available from our company.

For more information about Riverside Property Management and the services we offer please take the time to browse our website and feel free to call our offices to speak with a licensed representative of our company.

(678) 866-1436
info@riversidepropertymgt.com

High Performing Board Practices


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The public debate on boards often focuses on catastrophic failure. In many cases, the boards actually meet the standards and follow the right policies, but were not committed enough and left to ask the right questions.

Exceptional boards center around four key concepts or practices:

Strategy
This includes being mission-driven, using strategic thinking, and maintaining of sustainable resources.

Responsibility
This includes having  compliance with integrity, being results-oriented, and promoting a spirit of transparency.

Building relationships
This includes developing a constructive partnership between the home owners and the board, ensuring revitalization, and implementing intentional board practices such as thinking about the board’s size, structure, and meetings.
Dynamic
This includes fostering a culture of openness to ensure that all voices are heard, respective practice when making decisions, and demonstrating continuous learning through guidance, education beyond the boardroom and self-evaluation of the board as a whole and the members of the Board.

The true essence of an exceptional board is in the way members of the board and homeowners are interrelated to create something much richer and more powerful than anyone can create one.

When thinking about each other’s participation differently in the meeting, you want to make sure you understand why. It is not just because of better conversations; it is because they have better information and ask better questions which lead to more robust discussions, more authentic debates, and better decision making.

By strengthening our Boards, we will have stronger organizations, and in time much stronger communities. HOA Board leadership is critical to serving the public good and the impact of our State and Country.

CAUGHT IN THE ACT: ENFORCING PROTECTIVE COVENANTS WHILE THE VIOLATION OCCURS


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One of the greatest challenges for a community association board of directors is enforcing the community’s protective covenants.  Protective covenants are a wonderful tool for communities that wish to maintain an established quality and character.  To help maintain this quality and character, an association’s declaration of protective covenants typically contains a provision requiring property owners to seek and obtain approval from the association’s board of directors or architectural control committee before making any exterior changes to the property. In the event that a property owner makes exterior changes to the property without first seeking and obtaining approval, the protective covenants usually include a number of enforcement tools such as fining, self help and the right to seek a court injunction.
Unfortunately, at some point most associations are faced with a situation where fining and/or self-help just can’t do the trick because the violation is still in progress when discovered.   For example, imagine coming home from a long and draining business trip. The only thing on your mind is getting home and relaxing on the front porch and enjoying the familiar sights of your community.   As you pull in your driveway you almost collide with the light post when you notice the largest, most horrific structure you have ever seen in your life.  As you get out of the car you realize that this monstrosity is a partially-constructed, three-car sheet metal garage located at the edge of the property line and directly facing your porch. You soon learn that the owner failed to submit a property modification request and did not obtain approval before beginning the construction of this garage.   You immediately call the president of the board who assures you that a violation letter will be sent demanding that these owners immediately cease and desist all construction and informing them of the violation and imposing a $25 per day fine –of course, the owners will, per the declaration, have 10 days to appeal before the fine actually becomes effective.
Clearly fines and letters will not be not sufficient in this case.  This type of violation must be stopped immediately, before the owner completes the construction.  When the board discovers such a violation “in the act” and wants the violation stopped immediately, it is not only advisable but often legally necessary for the association to immediately file a lawsuit seek a temporary Court order requiring the construction to cease. Failure to act immediately to address the violation may give rise to the equitable defense known as Laches.
“Laches” occurs when the association is aware of a violation but “unreasonably” delays bringing suit to address the violation which results in some sort of prejudice to the violating owner.  In the hypothetical above, if the association merely sent the letter, allowed the unauthorized construction to be completed, and only then brought suit to have the garage removed the Association could very well be found to have committed laches.    The Owner would most likely argue that the association’s failure to act prior to the completion of the garage resulted in prejudice in that he continued to expend large amounts of resources after the association learned of the violation.  Further, the owners would argue that the cost of removing the garage has also increased significantly from the point when the association discovered the violation.   As a result, a Georgia court could very well rule against the association and deny its request to have the garage removed.  Under the doctrine of laches, the Court can allow the garage to stay even if it finds that the construction was clearly performed in violation of the protective covenants.
The doctrine of laches is considered an “equitable doctrine” because it is based upon the principle of fairness as opposed to a strict application of the rules of law. In our hypothetical, the law is clear that construction without prior board approval is a violation of the covenants.  However, the principals of equity demand that, where there is a significant expenditure of funds and/or improvement of realty, the association must act swiftly to enforce its rights. When the Association fails to act swiftly, the “good faith” violator can be said to have justifiably relied upon the association’s inaction.   In such a case, the Court will likely agree with the violator who argues that the association’s failure to act resulted in the violating owners continued expenditure of significant funds and effort to complete the construction of the structure. The Court will likely agree with the violator who argues that the improvements are not easily undone and that the Association, having had knowledge of the violation prior to the completion of the construction, failed to act and effectively approved the construction.  Further, the court will likely agree that the violator’s reliance upon the association’s inaction was justifiable. In short the principals of equity intervene and will prevent an association from purposely waiting until a violator has completed the work before enforcing its rights under the Declaration, thereby inflicting the greatest amount of cost and consequence on the violator.
The principles of equity abhors inaction by the party that seeks to enforce its rights. To avoid this scenario, upon discovery of such a violation, the association must act quickly and immediately seek judicial relief. Over the years the Courts have gone back and forth on what types of violations and how much delay can give rise to a laches defense.
The landmark legal opinion which dictates the application of the doctrine of laches to community association cases is set forth by the Georgia Superior Court in Bacon v. Edwards, 234 Ga 100, 214 S.E.2d 539. In Bacon, the Georgia Supreme Court held that “[a] mere objection or protest, or a mere threat to take legal proceedings is not sufficient to exclude the consequences of laches or acquiescence.” However, the Bacon court identified specific factors that are to be considered by Georgia courts when applying the doctrine of laches to community association cases. Specifically, the Bacon court held that, “[i]n determining whether there has been laches, there are many factors to be considered, including the sufficiency of the excuse offered in extenuation of the delay in bringing suit.”
Additionally, factors that Georgia courts consider when applying the doctrine of laches include the amount of time it took for the violating construction to be completed, when the association became aware of the violation, the actions taken by the association once it learned of the violation, the cost incurred by the owner for said construction, the cost the owner will incur to remove the construction, the level of difficulty associated with the removal of the construction, the potential damage which could be caused by the removal of the construction, the violating owner’s knowledge of the covenants and the violating owner’s knowledge that the association objects to and seeks to prevent  the construction.
The doctrine of laches is not an absolute defense for owners who begin construction without first obtaining board approval. Georgia courts have and will require violating owners remove unauthorized construction in certain circumstances.
For example, in Hech v. Summit Oaks Owners Ass’n, Inc. 275 Ga.App. 265, 620 S.E.2d 490 (2005), the property owners erected an above ground pool in violation of the community protective covenants without first seeking and obtaining board approval.  In Hech, the owners constructed the unapproved pool in about one week.  Approximately two weeks after the construction of the pool was completed, the association contacted the owners and advised them that the pool violated the community’s protective covenants. The association repeatedly sent written notice of the violation to the owners and demanded the pool be removed. After the owners continued to ignore the association’s demands, the association filed against the owners. The lawsuit was ultimately filed approximately 13 months after the construction of the pool was completed.
The trial court agreed with the association and ordered the removal of the pool. The owners appealed the trial court’s decision and the Georgia Court of Appeals affirmed the trial court’s ruling that the owners violated the Declaration, that the doctrine of laches did not apply and that the owner must remove the unauthorized pool. Specifically, the Georgia Court of Appeals held that:
To suggest that the [Hechs] acquired equitable rights in their violations merely because they managed to build the [pool] before [the association] realized that they intended to [do so], or because [the association] tried to avoid litigation by settling the dispute within the neighborhood, is to say that any restrictive covenant can be successfully violated, even in the face of complaints, merely by expending a large sum of money to erect a structure before the complaining party can figure out what is happening or can get to the courthouse to file a lawsuit. This would stand the law of restrictive covenants on its head.
The Hech case describes a situation where the Court will require the removal of a structure even when the Association has waited until after completion of construction to file suit. However, this should be considered the exception and not the rule.  In Hech, the court operated under the assumption that the association did not have knowledge of the construction of the pool until after construction was substantially complete.
Therefore, when a significant violation is unfolding before your eyes, the best practice is to dispense with formalities and immediately notify the owner in writing of the violation and demand the owner immediately cease and desist the unauthorized construction. If the owner does not immediately cease and desist construction, the Association must immediately file a lawsuit and seek a temporary restraining order (“TRO”) from the Court.
A TRO is a judicial device which allows for an immediate hearing, sometime as quickly as the same day the lawsuit is filed.  At the hearing, the court will hear evidence from both the association and the owner in order to determine whether to enter an order requiring the owner to cease construction. The order will not address the merits of the underlying violation, but rather will address solely the issue of immediate construction.  If the court finds some evidence of fact that the construction may be a violation of the Declaration, the court will order the owner to cease construction for a maximum of 30 days.  Then, in order for the restraining order to be extended for the duration of the lawsuit, the Court must hold a full evidentiary hearing, which is basically a mini trial.  If the Court decides to extend the order requiring construction to cease it will issue what is called an Interlocutory Injunction.   If granted, an Interlocutory Injunction will remain in effect until the lawsuit is completed.
One of the advantages of the TRO is that it may be granted ex parte.  An ex parte order is one granted upon application by the association without the violator having an opportunity to present his position.  When seeking a TRO, an association is required to present evidence which establishes that the association has taken diligent effort to notify the owner that it is seeking a TRO and has taken diligent effort to provide the owner with information relative to the hearing date.   Regardless of whether the violator contests the association’s request for a TRO, a TRO is such an extraordinary remedy that it is only valid for a maximum of thirty days. This thirty day cessation of construction, however, is usually sufficient to get the owner’s attention and to resolve the violation.
In Georgia, to have a TRO expanded into an interlocutory injunction, the association must pass a three-part test established by Georgia Courts.
First, the Association must demonstrate that there is a substantial likelihood that it will win the underlying lawsuit.  Second, the Association must demonstrate to the court that a greater harm will occur to the association if the covenants are not enforced than to the violator if the injunction is granted. Third, the association must demonstrate to the court that it will suffer irreparable harm if the injunction is not granted.  While these three elements are required to obtain an Interlocutory Injunction after a full hearing with witnesses, Courts often apply the same or similar criteria when evaluation an request for a TRO.  The main difference being that the hearing for a TRO often does not have actual witness testimony and the Court generally relies on the contentions of the respective attorneys for the parties.
The first two elements required for an Interlocutory Injunction usually do not pose much difficulty to the Association seeking an Interlocutory Injunction. The third element, however, historically has been more difficult for associations to demonstrate. The demonstration to the court that the association will suffer “irreparable harm” if the injunction is not granted is sometimes a difficult burden for the association to meet.  In some situations, it is not difficult to show irreparable harm.  For example, a water leak causing continuing damage to other units in a condominium clearly meets this burden because the continued water exposure could result in unknown and substantial damage.  The immediate urgency of this type of problem helps establish irreparable harm.  However, it has often been difficult to convince a judge that a violation of a restrictive covenant in a non-emergency situation would result in irreparable harm to an association if a preliminary injunction is not granted.
Fortunately, the third requirement of proving irreparable harm to the association is no longer required.  The Georgia Court of Appeals ruled in the case Focus Entertainment International, Inc. v. Partridge Greene, Inc., that irreparable harm automatically occurs as a matter of law when a restrictive covenant is violated. With this decision, the Georgia Court of Appeals greatly simplified the process for community associations to obtain court protection to immediately stop architectural and other violations from continuing.
The point we have tried to make in this article is that an association must act swiftly when confronted with construction violations that are still in progress when discovered.  Whether the association must file a lawsuit and seek a TRO in order to avoid laches will depend on the cost and scope of construction and the cost and difficulty of removing it at a later date.  However, a good rule of thumb to is to consider that a court is likely to find laches to exist when delay in addressing a violation involves significant monetary investment and construction by the violating owner and significant cost and difficulty of removing the construction once complete.  On the other hand, a court is much less likely to find laches to exist when the modification is minor, less costly and is quickly installed and/or removed.  Regardless, once unauthorized construction is discovered a cease and desist letter should be immediately sent, them the association can evaluate whether or not the violation is of such a kind as to require a lawsuit and a TRO.  Each case is different, but all require the Association act and act swiftly.

Source:  http://www.wncwlaw.com/news/whitepapers/details.cfm?id=60