How board can handle ‘inherited’ problems

newsQ:   The developer of our community has turned over control of our homeowners association (HOA) to the homeowners, and we have now elected our first board of directors.

We are fielding lots of complaints of CCR (covenants, conditions, and restrictions) violations with sheds, fences, etc. that are violations of our CCRs but were ignored by the developer. Some may have even been explicitly approved by the developer and there was no functioning architectural committee. There was no enforcement and many homeowners didn’t even bother submitting applications for fences, sheds, and other changes.

What is the best approach to try to win back the reins on compliance by all owners? This new board recognizes our duty to uphold the rules, but if we start issuing citation after citation, it could create a hostile attitude in the community.

A: What you have described is not an uncommon problem, especially for communities started during the recent recession, which saw developers walking away from partially finished communities or being foreclosed on by their lenders. With no one minding the store, it was open season for homeowners to build and change whatever they wanted.

Widespread CCR violations that have been allowed to go unaddressed are a vexing problem for an incoming HOA board, and there is no easy answer.

I will start by reminding you that the board has a fiduciary duty to all of the members of the HOA to enforce the covenants. You should start by doing a drive-through of the community and creating a list of all of the known violations. Once you know what you are dealing with, you may find that some violations are so widespread, and their nature so innocuous, that it may be best to amend your CCRs to allow these conditions (examples: basketball goals in driveways, mailboxes that aren’t uniform). Amendments to CCRs typically require the approval of at least two-thirds of the homeowners.

Send notices to the owners with violations and invite them to a board meeting to discuss the matter. Ask them to bring any documentation showing that they applied for and received approval for the condition or structure.

If an owner can produce written approval from the developer or a prior board, the HOA would be legally bound by that, in my opinion. If an owner cannot produce proof of developer or board approval, I think you have a duty to request that the violation be rectified, but you should allow a reasonable time for the owner to comply.

If you find it necessary to take legal action against owners who refuse to address their violations, keep in mind that the statute of limitations for bringing an action for breach of a restrictive covenant is six years. There is no time limit, however, on asking a homeowner to voluntarily bring his property into compliance.

Whatever courses of action you take, be uniform and consistent in how you apply and enforce the rules, and don’t let personalities or emotions affect your decisions. In particularly contentious cases, you might want to consider voluntary HOA mediation under the legislation passed by the North Carolina legislature earlier this year.

Charlotte attorney Michael Hunter represents community and condominium associations for the firm of Horack Talley.

“Ask The Experts” Articles have been Reprinted with permission from the Charlotte Observer

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