…but they are not all-powerful. Nor should they be, democratic principles notwithstanding. Congress, our highest elected body, cannot pass any law it pleases; it is restricted by the Constitution. HOA Boards, though elected by homeowners in the community, have restrictions of their own.
HOA Boards (and the management companies they usually hire) are well known for enforcing subdivision restrictions on everything from landscaping to the color houses may be painted. Some subdivisions push uniformity to an extreme.
Sometimes, Boards might also vote in new restrictions. And if those are challenged, not every restriction will meet muster, something the Florida Bar Journal recently expanded upon. The courts have applied the test for new restrictions’ legality in various ways, leaving the topic a tricky patch of legal waters to navigate. To put a complicated matter simply, a new restriction must be reasonable in light of the general scheme of development that had been controlling the subdivision. Determining the scheme of development and deciding what is reasonable can be among the most vexing questions HOA Boards will find themselves confronted with.
Since the real estate bubble burst, legal matters facing HOA Boards have tended to cluster around liens, foreclosures, and how to deal with abandoned properties. But there is more to representing an HOA Board. The Board has some quasi-corporate rules it must comply with, and which have gone all but forgotten by some. And as this post and the Bar Journal’s recent exposé reveal, as Boards go back to running their subdivisions more proactively, their actions will further benefit from expanded legal advice ahead of taking some of the more activist decisions facing them.