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States stepping in to help resolve HOA conflicts

Ombudsman work to educate owners on rules and laws

By Jenni Bergal, Stateline.org
Published: October 25, 2015, 6:02am

Has your homeowner association fined you for painting your house purple? Have you ignored requests to pay annual maintenance fees for your condo’s clubhouse and swimming pool? Has your association refused to let you see its financial documents?

These are the types of conflicts that frequently erupt between residents and homeowner or condo associations. Some can get quite heated — or downright nasty.

A small, but growing number of states are trying to tackle the problem by creating ombudsman or homeowner information offices to handle the deluge of complaints that often land at state and local agencies.

The goal is to educate residents and association board members about their rights and responsibilities under the law and help settle disputes before they wind up in court.

“You’re dealing with people and personalities and homes and emotions,” said Heather Morton, a legislative analyst for the National Conference of State Legislatures. “Having an ombudsman is a way to have somebody a little more neutral offer help and information to the homeowners and the board, and possibly mediate and bring the parties together so they can reach an amicable solution.”

Last year, Delaware and Illinois passed laws creating ombudsman offices.

Four other states — Colorado, Florida, Nevada and Virginia — already have an ombudsman or a homeowner information center.

Ombudsman bills were introduced this year in six states — Connecticut, Hawaii, Massachusetts, Minnesota, New Hampshire and New York — but none passed, according to the Community Associations Institute, or CAI, a trade group for homeowner and condo associations and their managers.

Association growth

More than 66 million Americans live in planned communities of single-family homes, or in condominiums or co-ops, according to CAI. The residents automatically become members of an association when they move in and must comply with the association’s covenants and bylaws.

Elected volunteer board members usually are responsible for association finances and enforcing the rules. The boards require dues to operate and maintain common areas, such as clubhouses and sidewalks and, in some places, services such as snow removal and garbage pickup. They can levy fines and place liens on properties when homeowners haven’t paid their fees. And they can regulate the exterior appearance of a home, and enforce rules that affect parking and pets.

Over the decades, the number of associations in the U.S. has exploded, climbing from 10,000 in 1970 to 333,600 in 2014, according to CAI. Florida, California, Texas and Illinois have the largest number of associations.

Ombudsmen say they’re making a difference by preventing conflicts from escalating into legal battles. But CAI questions whether ombudsman offices are necessary.

Dawn Bauman, a senior vice president at CAI, said ombudsman programs often don’t provide relief for homeowners. She said many complaints are dismissed or resolved in the association’s favor because residents don’t understand the rules and responsibilities of living in a community association.

“It takes resources and time and money to fund a program like this, which could be unnecessary, if there was simple education in place,” Bauman said.

Mediating disputes

Most ombudsman offices are funded by homeowner association fees; a few are supported by taxpayers.

That’s the case in Delaware, where the ombudsman is paid for out of the attorney general’s budget.

Delaware legislators created the office because they were seeing more homeowner complaints and the courts were becoming clogged with them, said Rep. Melanie George Smith, who sponsored the measure.

In one bitter, decadelong legal battle, a Delaware judge ruled that the president of a homeowner association had deliberately refused to accept a couple’s annual assessment check year after year, maligning them and calling them “deadbeats” in letters to other residents.

Smith, a lawyer, said she used to grow frustrated when constituents would call her office and she would have to tell them that their only recourse was the legal system.

“They don’t have the time and money,” she said. “There had to be someone who could pick up the phone and talk to them, who could also mediate disputes between board members and homeowners.”

That’s exactly what Deputy Attorney General Christopher Curtin, the state’s ombudsman, said he does.

In Delaware, homeowners with a complaint must first go through an internal dispute resolution process within their association. If they’re not satisfied with the result, they can file a complaint with Curtin’s office.

Curtin says he gets calls or emails daily, and that homeowners often don’t comprehend the rules or why they’re required to pay an annual assessment. Some object to how a board spends their money or say it failed to follow the bylaws, such as having a quorum for annual meetings.

Occasionally, it’s the board who complains to Curtin, such as when a homeowner has a disabled car parked on the street or is illegally operating a business without a permit.

Sometimes it’s not that simple.

This summer, for example, a homeowner association in Sussex County threatened a resident with a lien because his grass hadn’t been cut, although he had owned the property for only a week and hadn’t moved in, Curtin said. The same board had issued fines and pre-lien notices to residents for not properly covering their garbage cans, even though board members were also violating those rules. Curtin said it was a pattern of misinterpretation and misapplication of the bylaws. Several members ended up resigning.

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