By Michael L. Hyman & Nicole R. Kurtz / Published December 2020
The GEICO Insurance TV commercial featuring an over-the-top HOA rules enforcer named Cynthia, who takes a chainsaw to a noncompliant mailbox, serves as a satirical reminder of the stereotypes of community association boards of directors. Associations have a negative image in the minds of many for perceived overreach in their enforcement measures, and this stereotype is exacerbated by occasional media reports on associations being hit with numerous complaints from owners about their alleged overly stringent enforcement and collections practices.
One such article, which appeared recently in the pages of the Star Tribune daily newspaper, focused on the disputes taking place between homeowners and their HOA’s board of directors at the Heritage Park community in north Minneapolis. The article chronicles how the association regularly sent violation letters and collected fines for what some residents saw as minor infractions, and it included an example of a homeowner who was ordered to remove parts of her garden, or the association would remove it and bill her for the costs incurred.
The article further reported that the association had filed liens and foreclosure actions during the pandemic against homeowners who failed to pay fees and other costs on time, which resulted in more than a dozen residents organizing and calling for changes.
News reports such as this perpetuate the negative perception that associations are overly strict and too rigid in their enforcement and collections efforts. The truth is that rules enforcement and collections measures are necessary actions to ensure the proper operation of associations, but they can be very challenging for associations to administer. Those that do it best have found that it takes a complete commitment to resolving disputes as reasonably and fairly as possible, with absolute uniformity and impartiality in all their deliberations and decisions.
For rules violations and disciplinary actions, associations should always turn to a set procedure to find effective, reasonable, and equitable resolutions. These protocols will typically include board and/or grievance committee hearings in which witnesses and experts from both sides discuss and answer questions regarding all the pertinent issues and facts. After all these considerations are weighed carefully by an impartial panel, its final decisions should be based on reason, and they should be aimed at finding fair resolutions that meet the community’s standards for the uniform and unbiased application and enforcement of its rules and restrictions. Any resulting fines and suspensions should always be reasonable and uniform with those for similar infractions.
Given the massive toll that the coronavirus pandemic continues to take on the livelihoods and financial wellbeing of many community association owners, boards of directors may wish to consider all their options for the collection of unpaid fees and assessments. While some associations are borrowing a page from the playbook of previous economic downturns by approving a uniform payment plan to assist owners who become delinquent, others take the position that full assessments are required to fulfill the proper operation of the association.
With the help of qualified legal counsel and financial professionals, associations should consider how they will respond to financial hardships caused by the pandemic in a manner that best suits their individual community.
As the economic and social impacts of the COVID-19 pandemic continue to unfold, community associations should seize this moment to reverse the stigma of overreach in their enforcement and collections efforts. By developing and implementing a fair and effective process for violations enforcement and dispute resolution, and also considering how they will respond to a potential collections crisis, associations can chip away at the negative stereotype behind the HOA Cynthia commercials and reinforce their positive image for safe and hassle-free living with easy access to exceptional amenities.
Michael L. Hyman, Shareholder, Siegfried Rivera
Nicole R. Kurtz, Associate, Siegfried Rivera
Michael L. Hyman is a shareholder with the South Florida law firm of Siegfried Rivera who has focused on community association law since 1970 and is board certified in condominium law by The Florida Bar. Nicole R. Kurtz is an associate with the firm who has focused on association law since 2014. They are both based at the firm’s Coral Gables office and are regular contributors to its association law blog, www.FloridaHOALawyerBlog.com. Siegfried Rivera also maintains offices in Broward and Palm Beach counties, and its attorneys focus on community association, construction, real estate, and insurance law. For more information, visit www.SiegfriedRivera.com or call (305) 442-3334.