HOAs provide residents with a community and a sense of belonging, in part because all residents agree to a common set of rules. These rules are codified in the HOA’s governing documents as covenants, conditions, and restrictions, also known as “CC&Rs.” Planned communities, developments, condominium complexes, and industrial parks that agree to a set of CC&Rs are bound by the guidelines therein. If a resident breaks a rule or other covenant, the HOA has the authority to impose fines or other penalties.
Still, HOAs are not omnipotent; they must abide by local, state, and federal laws. The Fourteenth Amendment to the Constitution of the United States governs one of the most basic legal principles in due process. Due process is a broad term that generally requires the state must to operate under the law and provide fair procedures when making decisions. It provides the basis for courts and other governing bodies' (like HOA boards) general requirement to be fair in their decision-making.
A Disappearing Playground?
In an HOA in Phoenix, Arizona, a neighborhood was upset about a recently removed playground after it felt the removal decision was unfair. Local news covered the community’s response. In a statement, one resident said, “We didn't have an opportunity to voice our opinion. When you move into an HOA community, that is what you are expecting, community.” The management company indicated that the playground was removed because it was nearing its life expectancy and upgrades would be too costly.
In response to this uproar, the HOA released a statement, that said in part:
“The Board held open meetings for the Owners of Tatum Manor Tatum Heights to attend. Discussions centered around the safety issues with structure and how best to address the aging, hazardous components of structure. . . . After much deliberation, the decision was based on the overall cost needed to bring the structure into compliance, the ongoing maintenance, the risks and liability to the Association and its Homeowners as well as the guidance received from industry experts.”
The HOA argued that because the board held open meetings, the process was indeed fair. Who is right?
Why Is Due Process Important?
While the Fourteenth Amendment doesn’t directly govern HOA boards, many states have implemented laws based on its interpretation by the courts. In Pennsylvania, for example, the Pennsylvania Uniform Condominium Act demands that associations may levy fines for violations of CC&Rs only “after notice and an opportunity to be heard.” 68 PA.C.S.A. Section 3302(a)(11). To know the specific state and local rules that govern your HOA, contact your legal professional for further information.
While each state has its own laws that govern due process, the United States Supreme Court has made several foundational holdings. In Matthews v. Eldridge, the Court found that due process was "flexible" and called for "such procedural protections as the particular situation demands." 424 US 319 (1976). This means that while due process is required for decisions made by governing bodies like HOAs, there is no one requirement that ensures due process. Instead, the governing bodies are required to provide enough procedures so that the process is fundamentally fair.
In general, governing bodies are bound to fair procedures when citing residents for CC&R violations and resolving conflicts between the board and residents. There is no specific set of due process rules, but a common guideline that governing bodies follow is from a well-known law review article written by Judge Henry Friendly of the Second Circuit. The list includes:
• An unbiased decision-maker
• Notice of action is proposed and the reasons for it
• An opportunity to present opposition positions
• A right to present evidence and witnesses
• A right to know the opposing evidence
• A right to cross-examine opposing witnesses
• A decision based only on the evidence presented
• The opportunity to be represented by an attorney
• A requirement of a record of the evidence presented
• A written finding of fact and the reasons used by the decision-maker
What Does Due Process Mean for My HOA?
As a part of HOA leadership, the processes in which the board makes decisions, particularly about rule violations and enforcement, need to be fundamentally fair. The basic requirements include a written notice and an opportunity for a hearing. A resident has the basic right to object to the accusation and present contrary evidence supporting their position. Generally, HOA boards are well served to include these fair procedures in their governing documents and make these known during any conflict with a resident.
Consistency is also important in HOA processes. HOAs can avoid disputes by fairly and efficiently enforcing the rules and restrictions agreed to by all members of the community; and when conflicts can’t be avoided, a consistent implementation of the rules gives the governing body more credibility.
The requirement of fair process should not be seen as a burden. Creating a respectful environment also creates a trustworthy exchange between opposition parties. Following the general principles of due process is not only a good legal decision but a good business decision as well.
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