HOAleader.com - Tip of the Week - March 16, 2018
Published: Fri, 03/16/18
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HOA Boards Can Upend their Predecessors’ Decisions. Usually. And It Might Not Be Smart
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We’re answering another reader’s question in this week’s tip. Here’s the short version: An HOAleader.com reader asks if a board can undo permission that was granted to him by a prior board.
The most important thing to remember here is that new boards can change whatever an old board did—except when owners have acted in reliance on those prior decisions.
Here’s the general rule: “Any board can undo a prior board’s action as long as it’s a decision or action that’s permissible under their bylaws or declaration,” reports Brad van Rooyen, a partner at Home Encounter, a Tampa, Fla., company that manages community associations.
“If a board puts in a certain collection policy, and a year from now another board comes in, the new board has every right—as long as it’s a decision they can legally make—to undo that action. But it’s not always wise to do that because it causes confusion.”
Fair enough. Then here’s what we mean about reliance: “This is an interesting question,” says Alex Noland, CCAL, founder of Noland Law in San Francisco, which represents about 100 community associations throughout California. “If you have a majority of the quorum of the board making a decision, it’s a decision of the board. And a new board can come in and change a rule or policy or amend the governing documents.
“But if a board has given an owner a right to make an architectural change or create an easement, I really question whether a new board can come in and change what was previously approved with regard to a specific owner or home,” adds Noland.
“It’s one thing if you have extra parking spaces, and the board does month-to-month license agreements with people to rent them out,” explains Noland. “Then a new board says the association needs those spaces back. That’s different from, ‘Bob and Suzy, you can paint your home pink,’ and then when they’ve already relied on that permission and spent the money to paint their home, the new board insists Bob and Suzy change the color. An architectural or design modification is way different than pool hours.”
Christopher J. Shields, a partner at Pavese Law Firm in Ft. Myers, Fla., who's represented associations for decades, runs through basically the same analysis. “It would matter whether owners have relied on the board’s prior decision,” he says. “Boards have the right or authority to adopt or amend rules and regulations. The board makes rules until the board changes those rules.
“But any time the board basically adopts a policy or makes a decision and a person relies on that to their own detriment by installing the improvement they sought or something of that nature, I believe a future board would be estopped from changing its mind,” contends Shields. “That’s because the person changed their behavior and relied on that board’s position.”
Another issue raised by our reader is who can grant permission for changes to properties. Find out more about that, along with the issue of whether a board member can also serve on a committee, in our new article: https://www.hoaleader.com/members/3694.cfm
Best regards,
Matt Humphrey
President
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