You are a Homeowner in an HOA (Homeowner’s Association).
You open the mail and see a violation letter from your Property Manager. Your driveway is in disrepair and requires repair or replacement within the next 60 days, or you will be subject to fines.
You think about work, family, kids, and life, and wonder when or where you will find the time to get estimates for the driveway? Isn’t this why you have a Property Manager? Why do you have to get bids?
Your spouse lost their job, and you are barely hanging on by a thread. Where will you get the money for the repairs?
Can you just ignore the letter and your HOA? Can they make you do the repairs, or take you to collections for failure to maintain????
Can I just sell my home and ignore the Community Association and their rules???
Let’s take a step back.
What is a Violation Letter?
A Violation letter is a warning, or a notice, that you, as a Homeowner, did something that is not in compliance with the Governing Documents or Rules and Regulations of the Community Association. In the above example, the infraction is, failure to maintain your home and property (failing driveway).
This letter is a notice and a warning that a fine may occur. This is an opportunity for you, as a Homeowner, to have a discussion with the Property Manager before you receive additional violations and/or fines.
Who is Responsible for Soliciting Bids for Repairs Sited in a Violation Letter?
This is a tricky question, and the answer lies within your Governing Documents. Typically, the Declaration of the Association, or the CC&R’s, will tell you what components are owned/maintained by the Association (Common Element), and what components are owned/maintained by the Homeowner. On occasion, an item may be a Limited Common Element – which confuses everyone!
Common Element: This is an area that is “owned” by the Association or is at least the responsibility of the Association to maintain, repair, and replace. Association fees or maintenance fees collected from the Homeowners pay for Common Element maintenance, repair, and replacements.
Limited Common Element: This is an area that is owned by the Homeowner, making the Homeowner responsible for the cost of maintenance, repairs, and replacement. The Homeowner may be responsible for performing maintenance (such as sweeping or cleaning the driveway), but the Association is responsible for managing any repairs or replacement. Here’s the catch: Even though the Association may solicit bids, create a bid analysis, hire the contractor, and pay the contractor …. The Association will bill the Homeowner for the cost associated. Why? The Homeowner is responsible for the cost for the maintenance, repair, and replacement, even if the Association manages the project.
As Homeowners do pay for the cost of the maintenance, repair, and replacement of the Limited Common Element, separate and in addition to their Association or Maintenance fees, sometimes a Board of Directors will permit the Homeowner to manage the project start to finish, after submitting an Architectural Change Request. This is an individual decision up to each Community’s Board of Directors to decide.
Sometimes, the Board of Directors may ELECT to budget for maintenance, repairs, and replacement to Limited Common Elements, and pay for it from the Association fees or levy a special assessment for the project. This practice could be considered common when the Limited Common Element is high to reach (Balconies and Windows on a high rise), and the Association is able to secure a better price by performing the work in bulk. However, it does not stop a Board of Directors from discontinuing this election to pay for the maintenance, repair, and replacement of the Limited Common Elements. The cost associated is still the responsibility of the Homeowner, as it is still their property.
Homeowner Owned: If the element is owned by the Homeowner, the Homeowner is responsible for the maintenance, repair, and replacement. However, before making any exterior changes (even if an improvement is being made after a Violation Letter is received), be sure to submit an Architectural Change Request for review to the Property Manager. The last thing you want to do, is attempt to comply with a Violation, and then utilize incorrect specifications.
If the driveway is a Common Element or a Limited Common Element, push back on your Property Manager, as they should be managing the bid process. If the driveway is owned by the Homeowner, then the Homeowner is responsible for managing his or her home. Community Association Managers only manage the Common Elements and Limited Common Elements, not your individual home.
I Cannot Afford the Repair Right Now.
Responding to the Violation Letter is important. If you are not able to afford repairs right now, this is a great opportunity to have a discussion with your Property Manager. The following options may be presented by your Property Manager (or you could suggest these resolutions to your Property Manager):
1. Perform a Re-Inspection. Is it really “that bad”, or is your Property Manager being a little too picky? Ask your Property Manager to meet you onsite to review the issues at hand. Perhaps a Board or Committee member could join them, in determining if this is a valid violation that needs to be addressed right now. Can it wait 3-6 months? Or even until next year? If the Property Manager doesn’t agree with you, ask for a hearing with the Alternative Dispute Resolution (ADR) Committee, or the Board of Directors.
2. Ask for an Extension. You may need time to solicit bids, perform an analysis, see the costs associated with the repair…all while managing your home, work, and family. You may need more time then permitted in the initial violation letter. Ask your Property Manager for a 60 or 90-day extension.
3. Ask for Time to Make Payments. Depending on the length and width of the driveway, or the problems that may be associated with it, it could cost a few hundred to a few thousand dollars. You could ask your Property Manager for a one-year extension with a promise to have it completed – giving you not only the time to solicit bids, but also to save for the project completion. Just be careful, the price of material can fluctuate making a bid today not valid a year from now. Some contractors are barely able to hold their price for 30 days. So, if an extension is granted, be sure to increase the cost of the estimate by at least 10% to give yourself some wiggle room.
4. Suggest a Bulk Project in the Community. Sometimes a Community Association will hire a vendor to perform work on behalf of the Homeowners. Vendors will provide a better cost per Homeowner if there is more work onsite that can be grouped together at one time. This works well for driveway repairs, snow removal, power washing, and painting. This bulk project can be handled two ways:
a. The Homeowner Pays the Contractor Directly. The Homeowner can issue payment to the office of the contractor, arrange to pay onsite, etc.
b. The Association can Pay the Contractor, and then Bill Each Homeowner. While this activity is not typically a part of the day-to-day management contract, and may cost the Association an administrative fee, it is often worth it. The Board would achieve a maintenance goal for the community, while making it easy for the Homeowners to comply. It’s a win-win situation for all parties.
5. Ask for a Payment Plan. If the Association is providing initial payment to the vendor, the Association will bill your account for the amount due. It’s possible they are able to set up an interest free payment plan where you can pay the cost of the repairs over time. Be realistic with your request though – try to have payment made within 6-12 months at a maximum. You do not want your home’s maintenance expense to become a burden on the Association (which is actually a burden to all of your neighbors). Think about it: Do you want your neighbors to support the maintenance to your property? If the situation was reversed, I am sure you wouldn’t want to support your neighbor’s home maintenance, in addition to your own.
6. Borrow the Money Needed to Make Repairs. While it may not appear to be the best solution, if the market is hopping, it may be possible for you to take out a home equity loan or another type of loan to pay for the project. It may also give you additional funds to make further repairs (or other financial needs) and enable you to pay overtime for the project.
Can I Just Ignore the Violation Letter and the HOA?
You can….but more problems occur from ignoring it, then addressing it. Let’s review:
1. Have any Questions? Communication from Management and/or the Board is always a chance to have a discussion. An open dialogue is much better than no response. You can request a reinspection, extension, payment plan options, etc. But you can’t have this discussion if you do not contact the Property Manager/Association. Silence on the end of the Property Manager/Association makes them assume you are continuing to violate the Rules and Regulations and encourages them to take further actions (fines, etc.).
2. Notice. The violation letter is letting you know that you are violating the Governing Documents or a Rule and Regulation of the Association. Although Homeowners are provided a copy of the Governing Documents and Rules and Regulations at the time of purchase, very few have the chance to really read and understand them. Some Homeowners may not know that they are violating a rule, until they receive this notice. The violation letter is a WARNING and not a fine.
3. It’s not an attack. A violation letter is a standard form letter. It has to state certain phrases in order to comply with due process. It may appear to be an unfriendly notification, but it is not intended to be. A violation letter states the facts: What is wrong, how long you have to fix the situation, what will occur if you don’t fix it, and a chance to disagree with the letter.
4. Time to Cure. The violation letter should state how long of a period you have in order to correct the problem before a reinspection occurs. This will tell you exactly how long you have before a fine or other actions may take place.
5. Right to Dispute. Every violation letter should include the right for you to disagree with the violation, and a due process. If you disagree, you should be able to meet with an Alternative Dispute Resolution (ADR) Committee, or the Board of Directors. Often, at this meeting, the decision will be final. This is another chance to appeal to the Committee and/or Board about any financial constraints you are suffering.
6. What Action will occur next. Some Associations have another warning before a fine is applied, others fine on the second letter. Regardless, next actions need to be listed in the original violation.
7. A Chance to Dispute. The violation letter provides a chance to dispute the violation. If you do not agree with the violation, you have a chance to explain why.
Can the HOA Fine Me, or Make Me Do the Repairs, if I Do Not Comply with the Violation Notice?
Short answer? Yes, and yes.
When you move into a Community Association (whether it is an HOA, Condominium, or other type of Planned Community), you are agreeing to the Declaration, Bylaws, Governing Documents, and State Laws that Govern Community Associations.
The Governing Documents of the Association:
1. Provide the responsibility for the Homeowner to maintain his or her own home.
2. Provide the Board of Directors with the ability to create Rules and Regulations, and Policies to govern the Association.
3. Outline agreed upon rules that all Homeowners agree to, at the time that they purchase their home.
4. Provide the Board of Directors with the fiduciary responsibility to ensure that they are enforcing the Rules and Regulations. This includes performing inspections, issuing violation letters, and levying fines.
5. (Often) Provide the Board of Directors the right to make repairs to a Home, if a Homeowner fails to do so (and still charge the Homeowner for the repairs).
Can the HOA Take Me to Collections for Fines Accumulating on My Account or the Cost?
Yes, they can.
Some Community Associations and Management Companies handle small collections cases in-house, and only send large amounts to a collections agency or attorney. But a “large amount” is a relative term because a Community Association may have monthly fees of $55 a month, or $2000 a month. In many cases, if your account balance becomes 2-3 times your monthly maintenance fees, then you have reached the threshold for collections for your Community Association.
Many Property Managers and Board of Directors will separate unpaid assessments from fines. But some do not and just look at the account balance.
If you are sent to a Collections Agency or Attorney, hopefully that 3rd party is recommending to the Property Manager and Board to not take legal action (file a lawsuit against you) in attempt to collect fines. However, there are times where it is the only option to get a Homeowner to comply with the Rules and Regulations.
If you are not able to amicably work out the situation with the Property Manager, ADR Committee, Board of Directors, Collections Agency or Attorney --- the Community Association has the right to sue you in court to either force you to complete the repairs and/or pay fines. If this happens, the Community Association may also try to collect court costs, collections costs, and legal fees that they have incurred in the process of trying to enforce the rule that was violated. It is much better to resolve this issue before this occurs.
Can a Violation Letter Stop me from Refinancing or Selling My Home?
Yes, it can.
While some Community Associations may not take a Homeowner to collections over fines accumulating on an account, they also know that:
1. The account balance is still accumulating and must be paid in full for a home to sell.
2. A resale certificate (3407 for a Condominium or 5407 for a Homeowner’s Association) is required in order for a Homeowner to sell their home. This resale certificate will include not only the Homeowner’s Account Balance but will also state any violations or infractions against the home. If the Violation is not cured prior to the time of sale, this Violation can prevent a sale from occurring.
3. If a Homeowner tries to refinance their mortgage, the mortgage company often asks the same questions as if the Homeowner were trying to sell. They will want to ensure that the Homeowner has a $0 account balance with the Association. Accumulating fines would appear on this account balance, making that impossible.
4. Mortgage companies who are approving a refinance may also ask if there are any violations or infractions on the account. If there is a violation, the Mortgage company may deny the application until the violation is cured.
When you move into a Community Association (HOA, Condominium, or another type of a Planned Community), you are agreeing to the Rules and Regulations of the Association. You agree to comply with following the rules, including, maintaining your home. The Association has rights that it can take if you do not comply, including fines, collections, or performing the work and billing you for it. If you receive a violation letter, do not ignore it. Open the door for a conversation. Ensure that you are being offered due process and the right to appeal. Work with your Community Association for a mutual resolution.
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