Homeowner Associations are everywhere, and they are growing in number. Many buyers, knowingly or unknowingly, may come face to face with these entities when they are seeking to buy a house. These associations are predominantly in the suburbs and other planned communities, but they can be everywhere. Illinois is one of the top states when it comes to the number of associations present within those states. This article will focus only on homeowners associations, and we will cover similar rights under the condo association at a later time. This article will discuss the following:
- Can I review the paperwork concerning homeowner association bylaws, Declaration of Conditions, Covenants, Easements, and Restrictions (CCERs), and any other homeowner association document prior to buying the house?
- What are the rights, duties, and responsibilities of the Board of the Homeowners Association?
- Can the Homeowners Association fine me for something in the community instruments?
- Can the Homeowners Association restrict what goes on inside my house?
- I did not choose to have a homeowners association. What happens if I do not pay my assessment or if I do not comply with the community's interests?
- What are the powers of the Board when it comes to recalcitrant homeowners?
- What are my rights against the Board?
- How can the association members know whether the Board is doing their job?
It is important to know this information prior to making a decision on purchasing a home bound to a homeowner’s association. If you do not want to have any restrictions on the enjoyment of your house, the recommendation would be to avoid living in communities that feature a homeowner’s association. However, they can be pretty valuable to maintain the charms and value of planned communities and suburbs. The association documents run with the land, and, unless there is a movement to undo the association, it will remain bound to that property until the association dissolves. It is important to know what you are walking into to avoid future hassles, headaches and fights with your neighbors.
Can I review the paperwork concerning homeowner association bylaws?
If you are considering purchasing a home that is bound to a homeowner’s association, the purchaser absolutely has the right to inspect the community documents. If you do not request these documents, they do not have to be provided to you. They are available upon request to the Board of the Association. Once a request is made, this information should be provided within 30 days.
A purchaser has the right to inspect: A copy of the declarations, bylaws, and other community instruments; a statement of any liens and other amounts due and owing for the property that they wish to purchase, a copy of any capital expenditures that the Board has had in the past 2 fiscal years, a statement of the status of projects and funding for these projects, any judgments pending against the association, and statement concerning insurance coverage for the common properties.
What are the rights, duties, and responsibilities of the Board of the Homeowners Association?
The Association iself is responsible for overseeing and taking care of all common property or areas. The common area is all the area inside of the community that is not part of each individual lot or unit. The following is a list of all the association obligations and duties as afforded by statute.
- The Board must meet at least 4 times per year;
- Limit entering into contracts with current board members or their businesses unless there is a vote to allow for this;
- Take care of all common areas as provided by the community documents;
- Engage the services and supervise of a management company;
- Power to fine unit owners for not complying with the community documents after notice and an opportunity to be heard;
- Collect the appropriate fees to pay for all common expenses;
- Keep records of all Board meetings, decisions, and transactions;
- Manage elections for the Board and manage elections in the event of a vacancy; and
- Fiduciary duties to the members: duty of care, duty of loyalty, duty of good faith.
The Board could have more obligations and duties if the community instruments establish them. It is very important to do a close reading of the community documents to ensure that the Board is properly following its own guidelines. If a rule no longer serves a community, the Board should try to amend the community interests to amend that rule.
Can the Homeowners Association fine me for something in the community instruments?
As long as the property owner is provided the information of the fine in writing (or in any way that the bylaws or other documents state that notice should be given), an opportunity is afforded to the owner to be heard, and whatever the Association is fining the owner is found or located within any foundational document of the association (CCER’s, bylaws, rules and regulations, etc.), then it may be proper for the association to fine a unit owner.
Please note, that each fine is generally a distinct infraction for which notice should be given and the process should be restarted, unless the community documents state otherwise.
Can the Homeowners Association restrict what goes on inside my house?
Generally, no, unless it is regulated in the community documents, or it belongs to a kind of “limited common element.” Limited common elements are a subset of the common elements; they are those portions of the common elements, including patios and decks, that are reserved for the exclusive use of the unit owner whose property adjoins such elements. In effect, every limited common element is an encroachment on the common elements because it is reserved for the exclusive use of an individual. If it is part of the property that can be seen from the street, it could very well be a limited common element. Examples of these elements are: sidings, windows, frontage of houses, garages, planters, etc. In a perfect world, this limited common area should be part of your community documents. If it does not form part of the documents, the Board may find themselves stuck between a rock and a hard place since they may not be able to enforce fines without amending the community documents.
I did not choose to have a homeowners association. What happens if I do not pay my assessment or if I do not comply with the community interests?
The CCER’s will run with the land. It does not matter that you did not choose to be a part of the association. Since the CCER’s run with the land, your property is encumbered with these restrictions. If you do not pay your assessments or comply with your responsibilities under the community documents, you may be fined. If this continues, the Association does have the power to evict recalcitrant homeowners to rent out the property to pay off any remaining balance.
What are the powers of the Board when it comes to recalcitrant homeowners?
As explained above, the Board could fine the owners in accordance with the community documents. The Board could also seek to evict the homeowners for past-due assessments and/or fines.
What are my rights against the Board?
The Board owes all unit members fiduciary duties. These duties include the duty of care, the duty of loyalty, and the duty to act in good faith. The duty of good faith involves the absence of malice when seeking compliance with the community interests and an absence of intent to defraud. The duty of loyalty means that the board must act without personal economic conflict. Meanwhile, the duty of care is the duty to act without recklessness and to try to avoid losing common property.
Besides these fiduciary duties, the Board needs to act in compliance with all restrictions found in the community instruments.
How can the association members know whether the Board is doing their job?
Members have the right to request Board records and documents. This request needs to be made in writing and to the Board directly. If the community documents establish a proper way to go around making this request, the property owner needs to follow the community documents. The documents that can be requested are all recorded documents that affect the association, detailed accounting records of receipts and other expenditures, the minutes of all meetings within the last 7 years, copies of previous ballots for any election held in the previous year, and any proxy voting information for member properties. This information could then be used to determine whether the board members are following through with their obligations or if they need to be held accountable for wasting common property.
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