Guidelines and Advice for HOA Management & Board Members

AssociationHelpNow Staff Writer from Issue #1 2013


How to run a hearing is an important part of HOA management. There are many aspects that need to be considered in order for a hearing to proceed flawlessly and to assure that associations have acted in a lawful manner. In order to properly conduct a hearing, HOA management must understand due process of the law. According to Stefan Richter, attorney at Clemons, Richter & Reiss, P.C. of Doylestown, PA, “In its purest sense, ‘due process of law’ requires 1) notice, and 2) opportunity to defend.” Amanda Krenson, attorney at Eads Murray & Pugh P.C. of Indianapolis, IN adds, “Due process has a legal meaning, that of a constitutionally guaranteed set for legal proceedings that will be carried out according principles of fairness, ensuring the parties have notice and an opportunity to be heard.”


Prior notice, as mentioned in Richter’s definition of due process, is a responsibility of associations. Richter explains, “Homeowners must comply with the terms of the Declaration, the Bylaws, and any Rules and Regulations. Although the Declaration and Bylaws are not routinely amended, Rules and Regulations are. It is therefore important to publish such Rules and Regulations whenever changes are made. In context of a violation, ‘notice’ refers to a notice of violation, i.e. a letter advising that certain conduct is in violation of the Declaration, Bylaws, or Rules and Regulations.” Richter adds, “Delivery of notice is generally by first class mail to the address on record with the association. The Bylaws may also address how notice is given.”


According to Krenson, “whether or not residents must make the initial request for a hearing in writing depends on the procedures put in place within the governing documents of each community and any applicable statutes.” Richter expands, “Absent such provisions, the notice of violation must state how the Unit Owner can defend or request a hearing. Although no one single method is required, the process must be clear and reasonable. In most cases, the Unit Owner must make a written request. Judges do not, however, favor formality when it is clear a Unit Owner expressed his or her intent to request a hearing.”


Prior to a hearing, there must be a documented prior notice complaint against the resident. Krenson clarifies, “It should give sufficient notice of what is the purpose of the meeting.” “The notice of violation should specify the provision of the Declaration, Bylaws or Rules and Regulations that applies, and sufficient detail concerning the conduct that is deemed to constitute the violation. To some extent, this will depend on the violation. For example, times and dates are more important to noise violations than to the installation of an unapproved gazebo,” Richter adds.


It is important for HOA’s and management companies to understand what type of documentation is required of them by the resident who has been cited in a complaint.  Richter explains, whether or not the resident is entitled to names and contact information of any witnesses, copies of statements and other reports related to the dispute “depends on the circumstances. If the violation can be verified independently (like the unapproved gazebo), the identity of the initial complainant is less important. However, for noise similar violations, the person complaining cannot be kept confidential. Not only will the Unit Owner be denied the opportunity to confront his or her accuser, the association will proceed on a violation by hearsay. This will not hold up in Court.” Furthermore, “Depending on the provisions of the Declaration and Bylaws, hearings are either before the board or a grievance committee. These matters are generally not open to the public.”


A decision on the matter is made by either the board or a grievance committee. When a grievance committee is required by association bylaws, Richter explains,  “Committees are generally appointed by the Board, unless stated otherwise in the Declaration or Bylaws.” All members of the grievance committee can be board members. There are some, however, who are excluded from being a part of the grievance committee. Richter defines inappropriate grievance committee candidates as “Anyone who could be a witness to the violation, is the victim of the violation, or is otherwise involved.” Krenson adds, “Any director who may be considered an interested party with a conflict of interest should not be part of the appeal process. The whole idea of ‘conflict of interest’ is not only a matter of ethical rules, but also of public perception. Certainly, it would be in the association’s best interest to ensure that there is confidence in the process by lessening any public perception of conflicts of interest between owner-board member.”


When standing before the board or a grievance committee, associations and residents may wonder whether or not legal counseling or presence is required or beneficial. Richter comments, “I have never prevented an attorney from attending a violation hearing. However, this means that the association will likewise have counsel present.”


During the hearing, Krenson explains, “It’s important for the secretary to take notes and ensure that decisions are made within a Board meeting and that the vote is recorded in the minutes.” In some cases, Richter explains, third-party dispute resolution programs or mediation programs may be put into use, “Sometimes, the objective view of third party is necessary to get two sides to come together. Unit Owners and Boards often become entrenched in their view and lose sight of what could potentially be common ground (no pun intended).” Once a decision has been made on the matter, Richter relays, “Decisions are generally made in writing. Detail will depend on the nature of the violation and the fine or remedy.” Krenson adds, “At minimum, a notice of the decision should be sent to the owner.”


If associations wish to avoid the formalities of a hearing, an informal discussion can be conducted with the resident in question prior to the hearing. Richter explains, “This is probably the most important aspect of violation hearings for community associations. The purpose of violation procedures is not the issuance of fines or the doling out of punishment. My view is as follows: While formal violation hearings satisfy due process requirements, they also provide the opportunity for dialogue, and ultimately – resolution.” Krenson cautions, however, “The important thing to avoid is the appearance that any formal decisions can be made at an informal meeting.”


In closing, Richter offers his advice, “The board must enforce all covenants, restrictions, rules and regulation consistently and fairly. Particularly for rules, the rule itself, and its application must be reasonable. Boards must also recognize that ‘automatic fines’ just don’t exist, and that due process is always required. And while violation hearings are procedurally required, they should not be viewed as a nuisance. The hearing should also be used as an opportunity to resolve the violation.”

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