The last pillar in our foundation is Justice. There’s several words that might evoke something similar, but this is actually part of the issue with HOA statutes and governing documents – sometimes finding the right word to describe what we really want or mean is harder than it looks.
We could, for instance, use the word fairness or reasonableness as words describing our aspirations. But, as an example of how tricky this gets, Housing and Urban Development’s (HUD’s) definition of “reasonable” for the purposes of assessing accommodations under the Fair Housing Act is actually “feasible” or “practical”. Not what maybe even a majority may think, if it were something to be voted upon by homeowners.
So, the heart of the matter is that there’s gotta be a better way to handle and resolve disputes – of any kind – within the experience of an HOA homeowner or Board Member. Sometimes, the issue is enforcement of a rule, and the dispute is over what the words in the governing documents really mean, or intend to mean. We’ve experienced this recently, as some homeowners have become focused on whether or not Sprinter Vans are or are not RVs, or should be regulated by POHOA.
The absence of the word “van” in the CCR lead one attorney to reason that these types of vehicles were not covered, even if they could technically be used to go camping with. But, our most recent general counsel, at the urging of a CAM who forgot the issue was resolved by the prior attorney, deemed that prior interpretation to be “wrong” – particularly when he thought it was my own personal interpretation, and no one had told him that we had actually already paid for that legal advice.
This example is one of many that has arisen at POHOA in the past several years, where vague language within our governing documents has led to disputes between homeowners and the Board – including the infamous case involving the shades of gray in roof shingles, when the guidelines clearly state “or similar”. That Board nearly forced $20,000 of out-of-pocket expense on homeowners who genuinely felt they were following the rules.
So, what do I mean by Justice then?
So, using that last example, the problem was that upon attempting to enforce the rule, the Board stumbled for nearly 2 months – and put the homeowners in a purgatory that resulted in actual health effects for one of those homeowners. When they hired attorneys to break the ice, they were treated as the aggressors, and within the Board, certain members claimed that due to them hiring an attorney, they had lost their right to a hearing – their fate would be decided in a closed-door meeting without their ability to speak for themselves.
When I raised the point at the 3rd of 3 meetings that they were unrepresented, one of the Board members waved a letter from their attorney in the air and declared that they WERE represented – by this piece of paper. I was floored, but kept my astonishment at this injustice to myself. In the end, by a narrow 3-2 vote, we did not, in fact, force them to replace their roof or pay any fines – the botching of our dispute resolution process in so many ways was essentially a mistrial. We had utterly failed at our volunteer roles in administering . . . justice.
Part of the reason for this is a lack of defined processes combined with poorly written rules and guidelines. While I tried during my tenure to raise the issue to the level of the HOA general counsel, two of the Board Officers saw fit to cut off access to the attorney – and the attorney went along with it. Even though the attorney has a duty to educate the entire board, he not only went along with it, but when I contacted him directly as a board member, he gave me his hourly rate.
At the Colorado State Legislature, over 10 years have been spent trying to figure out how to deliver an affordable dispute resolution (ADR) process to homeowners who are regularly denied a fair and impartial process, a hearing, an appeal, or any semblance of a process that considers the actual merits of a dispute. Because matters are often unresolved directly, the only alternative, particularly if the Board is the subject of a complaint involving non-compliance, is to litigate. And, that often leads to retaliation against the homeowner or board member who is actually doing their duty in this process, as designed by CCIOA. They are considered the enemy and/or aggressor, and in some cases, experience retaliation that leads to physical harm or severe emotional or financial distress. This includes abuse of the fining and foreclosure process – and some have even lost their homes.
In order for there to be actual Justice within HOAs, there are several elements that need to be put in place in a comprehensive and coordinated manner:
- A Homeowner’s Bill of Rights
- Due Process for Complaints, including protections for anonymity
- Decoupling Fines from Foreclosure
- A Fine Schedule that is proportional to the infraction
- Required Mediation of Disputes
- An Appeals Process for Board Decisions back to the Owners
- An Anti-Retaliation Policy
- Agreement to settle most disputes in Small Claims Court (which already has Jurisdiction in Colorado)
- An internal ADR process that is obligatory to the Board
While some of these topics may be dismissed out of hand by some who have “experience” in HOA management or prior Board experience, these are not ideas that I can claim authorship – they are from over 2 years of research and networking with activists and legislators in Colorado, who are now networking with similar groups in other states. And, in some cases, these reflect statutory conditions or rights already in place in other states. They may be opposed by organizations like CAI, but they are ideas that have been successful elsewhere.
The overall concept is to take the stereotypical tension out of HOAs, which in many cases is more detrimental to home values than any architectural element ever could be. If an HOA is run by a ruthless authoritarian Board, it can literally drive some people crazy and others from the homes that they love. And, it leads to a hostile environment that can escalate into real trouble – and examples abound throughout Colorado and other states that have not yet implemented some of these measures.
The key to beginning our transition into a better HOA is to eliminate subjectivity to the greatest extent possible. VF Law’s review of our documents matches this assessment – and perhaps should be our priority. Where there is vagueness, confusion, or silence in our documents, disputes arise over things that seem simple at first glance – like whether or not Sprinter Vans can be parked in driveways. Or whether chickens are barred, or whether it’s just a simple variance we should now consider. Or whether fences really need to be limited to 5 feet tall in all cases. Or how many board members this HOA will have.
None of these issues should boil over into disputes that disrupt meetings, or make people feel uncomfortable in their own homes, backyards, or walking down the street to the mailbox.
When there is Justice, enforcement of rules is for the purpose of getting compliance – and fines should be way down the line in that leverage, not the first thing to emphasize in a notice. If someone doesn’t think the rule is interpreted correctly, we shouldn’t just give them thousands in fines, sic the attorney on them (and pile on his/her fees), and then try to escalate to foreclosure. The HOA has powers that most are not aware – including to take away someone’s home through foreclosure. And, even if a homeowner were to stop the process, they may be bankrupted trying – so they lose either way.
This isn’t fair, reasonable, or just. And, we cannot rely upon people being “reasonable”, particularly in a nation that is more divided than ever, and bias combined with such powers could be abused without recourse. If you don’t believe me, ask an attorney who represents homeowners. Or Rep. Titone. This is a disturbing pattern, and if we can’t use self-control to disarm ourselves from these unnecessary powers over minor infractions, the legislature is considering following the path of the State of Washington which disarmed HOAs by statute. You can’t escalate a fine into foreclosure there any longer.
Those powers should be limited to one purpose: collecting assessments. HOAs should not use fines to shore up their budgets, nor should they use the threat of assigning legal expenses to collect outrageous fines that are made up often out of thin air. A schedule of fines makes sure everyone knows the consequences of non-compliance in advance – a right, in the eyes of many who have studied the issue.
We have recently received from VF Law recommendations to use document revision to give the Board new powers and authorities via “superliens”. Without digression, this is the H-Bomb of nuclear powers held by HOAs. It’s foreclosure on steriods. And, easier to abuse than the existing powers. We have no need to create new powers such as these, and, again, the legislature is considering barring HOAs from putting them into governing documents.
We also must reject the notion that in order to have Justice, we need to increase our legal budget by 7-8x and overhaul our documents. VF Law’s review said we have documents that are useable. Most of the work is in filling in the blanks and eliminating subjectivity. What they didn’t recommend was an ADR process to avoid litigation – and we need to consider whether we aren’t getting that advice because of a profit motive by the attorney. They don’t make money in dispute resolution, and would prefer getting involved in basic rules enforcement, as well as preludes to litigation, not to mention litigation. Mr. Bielli, in my first conversation with him in September said that the only people who win in the current system are attorneys – and I agree 100%.
There is no justice when it is nothing more than a game of financial chicken over legal resources. Merits are never reached, and without that type of resolution, we cannot human beings to just forgive and forget. It’s not reasonable by any definition of the word. And, it certainly isn’t justice or described as such.
We need to change our course to seek a foundation for a future that gets us off the high wire, and back with our feet on the ground. This is yet another reason I believe this point of view needs representation on our Board of Directors.