Note: This column was written by my law partner, Bill Hamel.
Q: I serve on a board of directors for a homeowners association (HOA). There is one particular owner who monopolizes board time with antics and actions that I think are way out of bounds, but the other board members tell me there is nothing that can be done about it. Is there a line that can be crossed where a board or board member can seek protection from an owner?
A: Being on an HOA board can be a thankless job. In many ways it’s not unlike those who serve in much higher forms of government. We often joke that half the constituents that elected the board will be adverse to them, and the other half expects the board to do them favors, so if the board does its job correctly, everyone ends up unsatisfied. Joking aside, we often get pleas from boards to assist them with owners who are engaging in inappropriate conduct or are just using a vastly disproportionate amount of the board’s resources.
We’ll note four types of owner behavior that can range from the benign to the extreme.
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Use-Restriction Violations: This is when an owner’s conduct violates the use restrictions of the HOA and the board can use the enforcement mechanisms, such as by issuing fines, suspending common area or amenity privileges or seeking court orders enjoining an owner’s conduct.
Criminal Activity: This is when an owner’s conduct is in violation of federal, state, or local criminal laws or ordinances, and the owner’s conduct can be reported to the proper authorities for enforcement. In such a case, the board may have no enforcement power other than to report the crime. After reporting the crime, a board member may be a witness for the enforcing authority.
Negligent or intentional damage: This arises when an owner, through willful or negligent conduct, has caused damage or injury to a board member, a board member’s property, or the HOA’s property. In this event, the injured party has a private claim for damages against the responsible owner and, if the conduct and injury continue, the injured party could also seek a court order enjoining the owner’s conduct.
Difficult Personality: This exists when an owner and a board or board member simply don’t get along or don’t communicate in a productive manner. While this might be unpleasant and difficult to endure, so long as the owner’s conduct does not rise to a level of a specific use-restriction violation, criminal activity, or negligent/intentional conduct, the situation qualifies as an indignity of our human experience and is simply a part of existing in an organized society.
We often advise clients that it’s not against the law to be a jerk, and the duties owed by HOAs to owners are no different regardless of whether the owner is a saint or a jerk.
Last year, North Carolina appellate courts ruled on two HOA cases where an owner’s conduct went beyond being a difficult personality. In each case, the conduct of the problematic owner as reported was extreme and included actions such as defacing community property with urine and feces, hurling profanity and making offensive gestures toward members of the community, threatening members of the board with physical injury and death, interfering with management of the property.
In each case the conduct caused injury to the board, a board member or the HOA. The HOAs in each case obtained court orders enjoining the owners from engaging in the harmful behavior. One of the court orders included provisions prohibiting the owner from contacting the board, the property managers or any vendors of the HOA.
One unwise owner who continued to act in violation of a court order was held in contempt of court and incarcerated. In each of these cases the North Carolina Court of Appeals upheld the court orders in favor of the HOAs.
While these decisions may be comforting to boards, it should be noted that each of these cases reported extreme and outrageous conduct by the owners that was historic, repetitive, and continued unchecked despite numerous requests to cease and desist.
The two cases mentioned above are Elizabeth Townes Homeowners Association, Inc. v. Jordan, 752 S.E.2d 256 (N.C. App. 2013), and Federal Point Yacht Club Association, Inc. v. Moore, No.COA13-681 (N.C. App. 2013).