This page and the document below, provide a very brief summary of what a Homeowner's Association (HOA) is and how it is designed to function.

 

Here are a few statements outlining an HOA.

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1 )  HOA's are created to protect the lot-owner (resident stakeholder) within a planned community.

 

2 )  HOA's are governed by federal laws and the laws of the state where the HOA is located.

 

3 )  HOA's are instruments that dictate to the lot-owner (resident stakeholder), and also protect the lot-owner from very specific types of harm.

 

4 )  HOA's are subject to federal laws and the laws created by the legislative body of the state in which the HOA is conducting business.

 

5 )  Under North Carolina law, all HOA's are required to operate as nonprofit businesses. 

 

6 )  Assuming there is cause, resident stakeholders, and others with standing, can sue an HOA.

 

7 )  HOA's are not rogue entities. It is possible and sometimes necessary to seek legal remedy against an HOA. It is important to know the governing laws of your state regarding Planned Communities because without this knowledge a homeowner can not know if their HOA is operating within the boundries of the law.

 

8 )  Everyone living in a planned community should take the time necessary to review the state laws that govern their HOA. And also study the laws that govern their private HOA. If there is a descrepency between the state HOA law and the private HOA law, the state law is the standard, and in such a case the private HOA law would have no power to execute. Any private HOA law that stands in opposition to its state law would be rendered invalid if challenged in the legal arena. I have seen instances where a law in a private HOA was exactly opposite to a states law governing that states Planned Communities. In such a case, the state law would win if a homeowner brought the issue to court.

 

9 )  Every HOA is different, in that they are all run and managed by people. The one thing that all HOA's have in common is that the board of directors duty is to implement the rules of the HOA. Many HOA's operate as a legislative unit rather than a comittee of individuals voted in to uphold the laws of their HOA, laws/rules that were established prior to 'some HOA board' gaining control. By that I mean, many HOA's will create there own laws rather than adhere to the laws already established in the documents outlining the (already agreed upon) laws of their private HOA.

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10 ) Be familiar with the state laws that govern your neighborhoods HOA, and be familiar with the laws established governing your private neighborhood's HOA, because in many instances, if you know your legal rights in this area, you just may be the only one who does. My personal experience regarding HOA's... it is likely to be the blind leading the blind, whether your HOA has hired a professional management team to assist them or not.