2024 Legislative Updates for Community Associations
Homeowners’ associations (HOAs) are a big focus in our country’s federal government and state capitols. What happens in these legislatures can dramatically impact community associations nationwide. As the housing market shifts and the social climate changes, more and more legislative proposals are affecting how HOAs operate and are governed.
To be a champion for your community, it pays to keep a pulse on what’s happening. Read on to learn some of the notable legal decisions made last year that may impact your community, and watch a recent webinar that covers House Bill 542, the Corporate Transparency Act, and the Belmont v. Farwig case.
Why are HOAs a Focus in Government?
Today, there’s a quick expansion of HOAs around the United States. In fact, 30% of the American population belongs to an HOA. That figure is rising every single day—and the government is taking note. An HOA is a nonprofit organization that’s set up to help run, manage, and maintain a neighborhood, building, or another collective of homes. For an HOA to exist, it must file Articles of Incorporation with its designated secretary of state. This not only defines its basic purpose, but also makes it a legal entity. Therefore, it’s subject to state laws and regulations governing its operations, such as governance, property rights, finances, and more.
Those who live in an HOA must adhere to the governing documents. These documents define the authority of the association and detail what board members and residents can and cannot do. In the hierarchy of governing documents, laws and statutes passed by federal or state authorities are most important and above any HOA’s documents.
What happens in the broader legal landscape of the nation—cases, laws, statutes, and regulations—can affect how your association operates and the rules that everyone in the community must follow.
Notable Legal Decisions
Recent legal decisions from cases across the United States may be worth taking note of. Influencing the control of common areas, board member requirements, short-term rentals, and more, these decisions might affect the communities you live in or manage.
· Dec. 2022. In McCoy v. Johnson, the Arizona Court of Appeals ruled that association board members are limited-purpose public figures who must show that association members maliciously published false statements related to their positions to pursue defamation claims.
· Dec. 2022. In Tenczar v. Indian Pond Country Club, Inc., the Massachusetts Supreme Court overturned a large damage award and order barring golf balls from going onto a lot next to a golf course. The court reversed the verdict of the original trial because the association’s declaration reserved an easement over the lot for reasonable golf course operation.
· Jan. 2023. In Aldrich v. Sugar Springs POA, Inc., the Michigan Court of Appeals ruled that short-term rentals were prohibited on lots restricted to only residential use.
· Jan. 2023. In Davis v. Verandah at Lake Grady HOA, Inc., the Florida Court of Appeals held that association covenants applied to a subdivision lot even though the covenants were recorded by the developer after the lot was conveyed because the buyer acknowledged and accepted the covenants at the time of purchase.
· Jan. 2023. In Ladera Ranch Maintenance Copr. v. Tinsley, the California Court of Appeals ruled that attorney’s fees to which an association is entitled must still be reasonable relative to the claims and complexity of the violation.
· Jan. 2023. In U.S. v. The Dorcester Owners’ Association, the U.S. District Court for the Eastern District of Pennsylvania ruled an association discriminated against disabled residents in violation of the Fair Housing Act by unreasonably delaying requests for assistance animals and imposing conditions in the assistance animals’ use of the common area.
HOA Industry Legal Year in Review
IPM Association Services, An Associa® Company, recently hosted a webinar reviewing the 2023 legal year for HOAs. There were a record number of attendees for the presentation, which covered a variety of topics, including:
Harmony Taylor, partner with Law Firm Carolinas, discussed important updates on existing laws and recently passed legislation, trends, and what’s yet to come in 2024. Watch the webinar now!
How the Government Impacts Community Associations
Legislative proposals should be top of mind for board members. Read our ebook, “How Government Impacts Associations,” to learn about the different types of proposals being filed, debated, and sometimes passed by legislators across the country. We also cover who these proposals affect and why you should be concerned and engaged in the legislative process.