You live in a homeowners association (“HOA”) or a condominium (“condo”) and you want to build a shed or put up Halloween decorations outside your unit. So, you build that shed or you put up orange lights and a pumpkin on your balcony. The next thing you know, the HOA or condo board has sent you a notice of violation to immediately remove that shed or the decorations. You decide not to heed the notice or you forget about it. Then you get a notice of hearing or a letter threatening a lawsuit. Now you are concerned about the possibility of being fined or even having to pay the other side’s legal fees. Not only that, but you are upset that your neighbors, who are on the board, are the ones threatening you. What are your rights? This article gives a few tips.
Read the Governing Documents
When you buy a home in an HOA or condo, the seller must give you a set of the community’s “governing documents.” These often include: 1. A copy of the declaration (other than the plats); 2. The bylaws; and, 3. The rules or regulations. After you get these documents, you have a certain amount of time to cancel the sales contract without a penalty. However, once the sale is closed, you can no longer choose to cancel the contract. The governing documents are usually recorded in the county land records or HOA depository where the home is located.
You must review your governing documents as soon as you get them from the seller. This is very important, but many people don’t do it. This will inform you of things like use restrictions, assessments, voting rights, board powers, etc. The rules in the declaration are called “covenants.” The declaration and bylaws are binding contracts that may personally require you to comply with these rules. (For example, you may find out by reading the documents that the HOA prohibits above-ground pools, and you planned to install an above-ground pool once you moved in. In that case, you may want to cancel the contract of sale.) As you buy a new home, set aside the time to read the documents. It can save you a great deal of time, money, and headache.
The Maryland Homeowners Association Act and the Maryland Condominium Act
The Maryland Homeowners Association Act (“HOA Act”) and the Maryland Condominium Act (“Condo Act”) are sets of laws that apply to homeowners associations and condominiums in Maryland. They can be found in the Real Property Article of the Maryland Code. If your set of governing documents are silent about a legal topic or are outmoded, then these laws help fill in the gaps. There are also laws that will trump the rules in your governing documents for subjects like family day care homes, no-impact home-based businesses, political signs, and distribution of written materials, etc.
Reading your governing documents as well as the laws in the HOA Act or the Condo Act can help answer your questions.
Typically, the first thing you will get in any covenant enforcement will be a letter. This may be called a “notice of violation,” an “initial demand,” an “initial violation notice,” a “cease and desist notice,” or it may just be a friendly reminder. The title of the letter may vary, but it will likely point out the violation, tell you what you need to do to fix it, and how long you have to fix it in order to avoid a penalty. The time limit may vary depending on the type of violation, the governing documents, and law.
Section 11-113 of the Condo Act lays out a process for condos to follow to settle disputes when there is a covenant violation. By law, in a condo, the owner must be given at least ten (10) days to remove a violation. Governing documents for condos often refer to Section 11-113 of the Condo Act when enforcing covenants.
The HOA Act does not include a similar 10-day rule. Most governing documents for HOAs do not have a set of procedures for enforcing covenants unless created by rule or regulation.
If you have been cited by the HOA or condo for a violation, read your governing documents again to find out which covenant they say you have violated. Violations of other HOA or condo rules or regulations are also violations, which the HOA or condo can enforce. (However, some HOAs only have the authority to govern violations in common areas and not the lots, so find out what powers your HOA has to enforce its covenants and where). It is most important to confirm that there is an actual basis (a written requirement) for the notice of violation, and to make sure that the board has the power to enforce such a rule.
If so, then look up any written procedures that are in place, for enforcing the covenants in your community. Make sure that your HOA or condo is following them.
Read the Law: MD Code, Real Property, Section 11-113
Hearing and Fining
If the problem has not been fixed within the time requested by your HOA or condo, then you may receive a notice of hearing.
In a condo, this notice will:
- tell you the nature of the violation,
- tell you the time and place of the hearing, (this may not be less than ten (10) days after they give the notice),
- invite you to attend the hearing and bring any statement, evidence, or witness on your behalf, and
- tell you of the proposed penalty.
An HOA may or may not have a written procedure for holding hearings. However, in order for the HOA to fine you, there must be an express covenant giving the HOA the authority to fine members for violations.
Hearings occur in executive sessions with the HOA or condo board. There may also be other people present, including the community’s management agent and attorney. If you believe that you are not in violation of the governing documents, then the hearing is your chance to dispute the violation. However, the board gets to decide whether or not a violation exists, and if it decides there is a violation, and that the violation has continued even though you got a notice to fix it, the board may fine you. The board usually gets to decide the amount of the fine. Fines usually get collected in the same way as assessments. It may be possible for the HOA or condo to sue you for unpaid fines and to place a lien against your property for unpaid fines.
By law, hearings held within a condo may be appealed to in court.
An HOA or condo can also ask the circuit court in your county to order you to stop a violation or fix a violation. They do not have to go through the full hearing process first, but to take you to court, they must act before the legal time limit (called the “statute of limitations”) expires.
The court may order you not to violate the governing documents or may order you to take some action, like removing an unapproved structure or alteration from the exterior of your home.
Usually the court will not award money damages for a covenant violation since the HOA is usually not financially harmed. But if the HOA or condo states that your actions cost them money, it is possible that you would be ordered to pay.
Read the Law: MD Code, Real Property, Section 11-113
Attorneys’ Fees and Costs
Condos: If you are sued by your condo and a court rules against you, the court may order you to pay the attorneys’ fees and costs for the other party, the condo. The condo must prove to the court that the attorneys’ fees and costs they are asking for are reasonable. The court will decide what fees and costs are reasonable, based on a list of factors.
HOAs: An HOA may also be able to ask the court to make you pay their attorneys’ fees and costs if they win. Again, the fees and costs must be reasonable, and the court decides what is reasonable. However, not all HOA governing documents allow the HOA to make you pay their court costs and attorneys’ fees, even if you lose in court.
And the compensation sometimes works both ways. If the rules say that the “prevailing party” is entitled to be compensated by the other party, and you win, then you are entitled to ask for those expenses.
Some HOAs and condos even have governing documents that permit the community to assess the violating owner the attorneys’ fees and costs incurred by it to enforce a covenant even if a suit is not filed. This right depends on the language of the governing documents.