HOA abuses of power
HOAs exercise potentially tyrannical governmental power, but with none of the limitations, such as due process and equal protection. HOAs get away with abuse of power for three reasons, all of which can be changed by amending CCIOA. First, the decision-makers, typically board members, are protected from their misdeeds by exculpatory provisions that require proof of willful and wanton misconduct. All such provisions should be prohibited. The HOA industry will say, "Then no one will serve on a board." If someone will only serve if they are effectively immune, then they should not serve. Would you want to be operated on by a physician who agreed to do so only if he was exculpated from the consequences of his negligence? Second, a homeowner can succeed only by showing that the HOA acted arbitrarily and capriciously, which is almost impossible to prove. The test should be objective reasonableness. Third, a successful HOA recovers attorney fees, a risk few homeowners can bear. A successful HOA should recover its fees only when suing to collect dues and assessments. After all, most other disputes involves aesthetic debates and rule violations that do not implicate homeowners' safety. Local officials who enforce safety codes cannot recover fees.
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Thank you for visiting the community engagement tool for the HOA Homeowners’ Rights Task Force.
Pursuant to HB23-1105, this project has now concluded. On behalf of the Department of Regulatory Agencies and the Division of Real Estate, thank you for your interest and participation.