Homeowners associations (HOAs) and management companies are designed to maintain neighborhoods and communities in a fair and transparent manner. That’s our main focus here at Paladin Property Management, but we’d be lying if we didn’t also say that in some cases, there are entities who can abuse their power. We’ve all heard horror stories, frustration, anger, and even legal action that’s come about from homeowners in these situations. One of the main reasons we started this company was to help put an end to this. In this post, we’re exploring a few of the common ways in which HOAs and management companies could abuse their power and some possible solutions for addressing the issues.
Abuses of Power by HOAs and Management Companies
One common way in which HOAs and management companies can abuse their power is by failing to act in the best interests of the community. This can manifest in many different ways, such as using funds inappropriately, ignoring homeowner complaints, or pursuing policies that benefit the management company or board members at the expense of the community. A common red flag that this could be happening is if there is a lack of transparency and accountability. These HOAs and management companies make important decisions without adequate input from homeowners or without providing clear justifications for their actions.
Solutions for Addressing Abuses of Power
To address these issues, homeowners may need to take proactive steps to hold their HOA or management company accountable. The first step is to educate themselves on their rights and obligations under their HOA’s governing documents. This will enable them to understand the rules and regulations that govern their community and the authority of the HOA and management company.
Here are a few other things you can start doing right away:
- Become more involved in the decision-making process
One approach is to become more involved in the decision-making process, attending meetings and requesting access to relevant documents and financial records. By doing so, homeowners can better understand the actions of the HOA or management company and advocate for policies that are in the best interests of the community.
- Demand greater transparency and accountability
Another approach is to work with other homeowners to demand greater transparency and accountability from the HOA or management company. Unit owners have the right to transparency from the association and should be able to access a wide range of association records. By getting more involved, homeowners can bring about change and hold their HOA and management company accountable for their actions. A well-informed and engaged community can help to ensure that the HOA and management company act in the best interest of the community as a whole, rather than abusing their power for their own benefit.
- Consider changing the HOA or management company
Finally, if the situation does not improve, homeowners may need to consider changing their HOA or management company altogether. Assuming that the current board or management is failing to be inclusive and act in the best interest of the entire association, and ownership is unable to bring about desired change through more traditional means, there are provisions for unit owners to band together and call a special unit owner meeting to vote out the current board by giving everyone in the association 14 days notice of the meeting. At that special unit owners meeting (so long as proper notice has been given), based on a simple majority, unit owners present can vote out the current board, vote in a new board, and subsequently, look for new management if applicable.
This process requires some organization and some legal nuance but is very doable for associations in desperate situations. We are willing to consult with and assist unit owners and walk them through this process to ensure their success.
Homeowners Associations (HOAs) and Management Companies are supposed to act as stewards of a community, ensuring that its residents enjoy a pleasant and peaceful living environment. However, the abuse of power by some HOAs and management companies is a serious problem across the United States and this can be a significant problem for homeowners. However, by remaining vigilant and taking proactive steps to hold these entities accountable, homeowners can help ensure that their communities are well-governed, transparent, and fair.