January 2012 – Some owners just aren’t suited for HOA living, and they make their own lives and the lives of their neighbors miserable. Are there things you can do to encourage those owners to sell and move elsewhere? Or would any such efforts be out of line? Here we provide answers.
Let’s Face It; This Isn’t for You
Raise your hand if any of your current owners should never have bought in a community association. They’re the people who bristle at every one of your rules and complain about nearly everything you do.
“It’s perfectly true that there are a number of people—and I’ve seen this time and again—who just should not live in a condo, HOA, or co–op because they’re just not psychologically prepared to share their housing decisions,” says Robert Galvin, a partner at Davis, Malm & D’Agostine PC in Boston who specializes in representing condos and co–ops. “That doesn’t make them bad people. Those people should simply own a detached single–family home.”
If you’ve been tempted to tell owners they should just pack up and move to a place where there are no rules; you’re not alone. “I think we’ve all thought that at one point or another,” says Duane McPherson, Addison, Texas–based western region division president at RealManage, an association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas. “When people buy into an HOA, the governing documents are there for them to review, and it shouldn’t ever be a surprise that you have to comply with the rules. But in all the years I’ve been doing this, which is way too many, I’ve never said that to anyone.”
McPherson has gotten the point across more politely. “HOAs are restrictive by their very nature to keep property values in place,” he says. “There are people who don’t want to live by those restrictions and certainly should think of moving to another place. There have been times I’ve said that to people. For those who don’t want to live by HOA rules, you can tell them in a nice way that maybe they should consider living in a place that doesn’t have these types of rules.”
The Risk of Speaking the Truth
Getting much more forceful could be dangerous. “As association attorneys, we’ve never done that, and I don’t recommend board members acting in their official capacity doing that, either,” says Ben Solomon, an attorney and founder of the Association Law Group in Miami Beach, Fla., who advises more than 500 associations and also represents developers through his second law firm, Solomon & Furshman LLP. “I don’t think that using your apparent authority as an elected official to push someone out is within the scope of what a board should do. But on a personal note, board members should feel free to say whatever is on their mind. So someone could say, ‘Listen, I’m not speaking as a board member but on my own behalf…’ That may be OK.”
Why are our experts so concerned? You have to be very careful because property rights are entrenched in the United States. “When you’re talking about housing, you’re dealing with a fundamental right and areas of the U.S. Constitution in which you have to tread gingerly,” says Nathaniel Abbate Jr., a partner at Makower Abbate & Associates PLLC in Farmington Hills, Mich., who represents associations. “The obvious concern is that if you do anything on an official basis, like saying, ‘We want you out of here,’ you’re probably opening your HOA to all sorts of liability exposure. That owner might be a member of protected class and say that the comment was a pretext for discrimination.”
Galvin agrees your words could open the HOA to liability. “You can’t pressure someone by saying, ‘Look, you don’t get along with us’ or ‘You really aren’t suitable for condo living.’ I think that’s too much because of the issue of property rights.”
That said, Abbate has raised the issue with clients who are homeowners. “When owners in an HOA our firm doesn’t represent come to us with a concern,” he says. “We’ll look at the situation and might say, ‘You’ve got a bunch of bozos running the place, and this might be one of those cases where you can’t fight city hall. The best thing might be to try to get out.”
Abbate has also seen the issue gently raised during efforts to settle litigation between owners and an association. “Also, in the context of litigation between an HOA we represent and an owner, we might suggest informally that maybe this isn’t the place for the owner,” adds Abbate. “Or the HOA will have a lawsuit against owners who are borderline violent toward the board or vendors. We’ll file suit to compel them to comply with the bylaws, and in the context of settlement negotiations, we’ll say, ‘We don’t think you understand community association living; you might be better off in unregulated land, and you might want to consider moving.'”
Abbate has also had an owner offer to leave voluntarily. “We had an owner who couldn’t comply with all the aesthetic restrictions in his HOA,” he explains. “He said, ‘If you don’t hold me responsible for attorneys’ fees in this litigation, I’ll put my property up for sale in the next six months.’ That’s very rare. But the person followed through in that instance. As a condition of settlement, we agreed that within 30 days of signing the settlement agreement, he’d list his unit for sale with a competent broker, keep the listing active so we could monitor it, and wouldn’t refuse bona fide offers. That might be something to discuss in closed–door negotiations.”
Matt Humphrey is president of the Alameda, California-based HOAleader.com, from which this article was adapted.