How HOAs Can Enforce CC&Rs

Can a homeowner sue the association board to follow the covenants, conditions, and restrictions?

A concerned owner or board member should send a formal demand letter to the board requesting that specific action be taken to enforce the CC&Rs.

For board members, proposing a motion at a board meeting to enforce bylaws is a good option even if it may be voted down.  Many states recognize liability protections for board members who voted against improper actions. Moreover, a formal communication or motion also may prompt the board to request a legal opinion.  Obtaining a legal opinion from the association’s attorney also protects board members from personal liability when they rely on the advice of an expert under the business judgment rule.

While enforcing the CC&Rs is important, the association’s attorney may indicate that there is a legal justification for not doing so in certain circumstances. By way of example, potential fair housing violations, violations of state law, the failure to properly enact the CC&Rs, or potential equitable defenses may all be reasons not to enforce them.

If all else fails, litigation is an option. However, litigation should be approached cautiously as it may be expensive and have unintended consequences.  When an owner sues the association, it may increase assessments, increase insurance costs, impact mortgage lending, or prevent an association from obtaining a community association loan.  Owners must carefully evaluate whether the owner or the association will be permitted to recover attorney’s fees if they are the prevailing party in litigation.  Accordingly, these are all important considerations in determining whether to file a direct action against the association to order enforcement of the CC&Rs. 

In some cases, an owner may have a private cause of action for breach of covenant against another owner.  Filing a lawsuit may be more efficient and avoid some of the above-described consequences. In other cases, an individual owner may file a derivative action on behalf of the association.  In most states, this derivative action may be filed after an owner demands that the majority of the board act and they refuse to do so.

Fundamentally, community associations are democratic institutions. Ultimately, boards that refuse to enforce the CC&Rs will be subject to a recall vote or may not be reelected at the next election. Accordingly, the political solution is often more cost effective and efficient than pursuing litigation.