Covenant enforcement is paramount to smooth association living. But, many HOA boards fall between the cracks when it comes to implementing rules and punishing violators. Thankfully, it doesn’t have to be that way.
In this article:
- Getting a Handle on Proper Covenant Enforcement
- What Are HOA Covenants?
- The Basics of Homeowners Association Covenant Enforcement
- The Pitfalls of Improper or Lack of Enforcement
- The Case for Covenants Enforcement
Getting a Handle on Proper Covenant Enforcement
Enforcing covenants might seem like a tall order, particularly if you’ve never done it before. But, with the right tools and knowledge, ensuring covenants compliance can be a relatively simple process. Here, we break down what actions an association can take against violators of covenants, as well as what possible consequences it can face due to improper or a lack of enforcement.
What Are HOA Covenants?
A lot of people confuse “covenants” in the community with the term “covenant community.” However, the covenant community definition is vastly different from what covenants actually are. Covenant communities are religious groups, whereas a covenant within a residential community is a rule that homeowners must follow.
A homeowners association (HOA) is a private organization that oversees and manages a community within a planned development. These associations are typically governed by a group of people, the HOA board of directors, and documents detailing what the HOA can and can’t do.
One of these governing documents is called the Declaration of Covenants, Conditions, & Restrictions, otherwise known as the CC&Rs. So, when a homeowner or HOA manager refers to a covenant, they’re talking about one of the provisions laid out within this document. Covenants are legally binding and enforceable, provided they’re properly recorded. Other terms used are subdivision covenants and neighborhood covenants.
The Basics of Homeowners Association Covenant Enforcement
People break the rules — whether by chance or intentionally. That’s just the reality. But, as with most rules, breaking them must come with penalties. Whether you’re a member of the HOA board or an HOA manager yourself, you must know how to enforce covenants the right way. So, what can you do when a homeowner violates one of the covenants outlined in the CC&Rs?
1. Send a Notice of Warning
Most first-time covenant violators can get off easy with just a warning. After all, it’s their first offense. They might not have known that they were even breaking a covenant in the first place. For these offenders, it’s a good idea to start with a simple notice of warning.
Make sure to include the details of their offense, such as the date and location, and any evidence if you have it. Let the homeowner know that the board has taken their actions into account and warn them against future violations. It’s also a good idea to inform them of what the possible penalties are should they break the rules again.
2. Impose Fines
Financial punishment is almost always a good deterrent against covenant violations. More often than not, homeowners are swayed enough to avoid violations by the sheer embarrassment that comes with getting called out. But, if that doesn’t work, then the HOA board can levy fines against the offender. This is perhaps the most obvious and common penalty for violating a covenant.
Before imposing a fine, though, it’s important to send the homeowner a notice of their violation with complete details. Allow the homeowner in question to explain their half of the situation.
When you ultimately decide to fine the person, make sure the amount is reasonable. Don’t charge them $100 for something as small as forgetting to take down their Christmas lights on time. On the other hand, an amount too small might not discourage them from committing the offense again. When it comes to fines, you must strike the right balance. You can increase the fines by marginal amounts every time they commit the same offense again.
3. Revoke Rights and Privileges
In some cases, the HOA board can take away the rights and privileges of homeowners who violate a covenant. For instance, the board can revoke the homeowner’s right to vote in the next board elections. Alternatively, they can suspend the offender’s access to certain amenities (like the pool or fitness center) until they settle their violation. This does not include basic necessities, though. So, if a resident breaks a rule, the board has no right to shut off their water or electricity.
The benefit of this form of covenant enforcement is that it won’t cost the association anything. The HOA board doesn’t need to shell out any money by simply cutting off the offender’s privileges. On the other end of the spectrum, this type of punishment is only effective if the resident frequently uses the community amenities in the first place. Someone who never visits the pool or clubhouse won’t be swayed by such a penalty.
4. Go to Small Claims Court
If the situation permits, the association can take the offender to a small claims court. In such a scenario, the HOA represents itself without the presence of an attorney. The court can then judge the outcome of the case, whether that means issuing an injunction or a money judgment.
This type of covenant enforcement is relatively inexpensive, though it does require some effort on the association’s part. Additionally, such a punishment can remedy the underlying violation.
If you can’t take the offender to a small claims court, arbitration can also help. In fact, some associations’ governing documents require arbitration or mediation in place of lawsuits. Arbitrations need an unbiased third-party to act as a mediator between the association and the offender. This type of covenant enforcement is great, too, because it can be very effective without being confrontational.
5. File a Lien
Depending on the governing documents and state laws, some associations can place a lien on an offender’s property. While the lien itself doesn’t do anything at first, the homeowner will have a hard time selling the property or having it refinanced. The lien acts as a notice of sorts that lets potential buyers and mortgage providers know of the violation.
6. Self Help
If the declaration allows, the HOA board (on behalf of the association) can enter an offender’s property and remedy the violation themselves. Any expenditures can be charged to the owner. If you choose to take this route, make sure to document everything. Take before and after pictures or videos, being careful not to damage anything else in the process.
Of course, this option comes with its own risks. While such an action can remedy the violation quickly, it also opens up the association to possible liability. The owner can claim personal injury, damage to the property, or, at the very least, trespassing. If your association does consider this option, make sure to consult with your attorney beforehand.
The Pitfalls of Improper or Lack of Enforcement
Homeowners must face the consequences of their actions. Otherwise, the rules would be ineffective. Therefore, you must have a standard procedure in place. However, if the association poorly executes covenant enforcement or disregards it completely, it can encounter adverse effects and even liability. As a board member or HOA manager, you must keep the following pitfalls, legal or otherwise, in mind:
- Laches. This simply means that, on account of the passage of time, the rights of the association have become unenforceable. In other words, laches is “sitting on one’s rights.”
- Selective enforcement. The board must enforce covenants in a uniform manner. Be wary of bias and favoritism. Make sure to enforce all covenants among all homeowners at all times.
- Estoppel. If the association gave an owner permission to do something that conflicts with a covenant, then it can’t pursue any action against the supposed offender.
- Reduced property values. Should an association fail to enforce architectural and maintenance covenants, this can lead to a decline in curb appeal and property values.
It’s hard to stay away from these pitfalls, especially if you have a young association with inexperienced board members. A good way to ensure proper enforcement of homeowner association covenants is to hire an HOA management company. With plenty of experience and resources, an HOA management company can routinely conduct a covenants compliance inspection and ensure uniform enforcement always.
The Case for Covenants Enforcement
Covenants enforcement not only keeps a community in order, but it also helps protect property values in the process. Failure to carry out these covenants can result in consequences. As such, the board must know what actions it can take against offenders, though it must always stay cautious about possible legal liability. If nothing else, the HOA board has a legal responsibility to enforce covenants within a community, so it must make sure to fulfill this duty.
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