Legal Question in Real Estate Law in Maryland
Home Owner Association Fees vs. HOA Performance Quality
We are homeowners in a townhouse community which began as a rental property. The ratio of homeowners to current renters while the selling process continues is nearly 50/50. The company with ownership of all unsold townhouses maintains control of the Home Owners Association until 76 percent of the property is sold. That company is/has been absentee out-of-state.
This selling process has been underway for over two years. Since then we have been homeowners and have paid an appreciable amount of money each month as HOA dues. However, there is NO enforcement of the HOA Covenants as written and agreed to by all homeowners prior to purchase. The landscaping is neglected; the swimming pool is not being opened as stated; there is no response to written grievances about common areas or homeowner violations of HOA Rules and Covenants. What is our recourse? We have suffered two years of neglect, mismanagement and a lack of communication with the ''HOA President'' as it stands. Can we escrow our monthly dues until we have a level of performance by the HOA which meets our expectations as outlined in the HOA covenants?
3 Answers from Attorneys
Re: Home Owner Association Fees vs. HOA Performance Quality
You may have a number of options/or remedies. The key to success for you is to act as a legal collective, rather than as individuals. Any one of you who refuses to pay HOA fees will be subject to judgment plus cost and fees etc. However, if you all, as a collective litigate and invoke the equity powers of the court against the HOA "board" you have a better chance of prevailing. Please feel free to contact me by telephone if you wish to speak further.
Re: Home Owner Association Fees vs. HOA Performance Quality
As members of a homeowner's association, your rights, and the obligations of the associations officers, are governed by the covenants and restrictions placed on record. Each association member has the right to bring an action against the Association if the covenants are not being properly enforced or the monies paid to the association are being misused. A review of the association covenants, articles of incorporation (if there are any) and association bylaws will be needed before an attorney can give you a more informed opinion. The documents might contain provisions which protect the officers from suit to a certain extent. Maryland law, however, also imposes certain obligations upon the association officers, especially if they are misusing the monies.
One important point - if your covenants are like most, the homeowner's association will have the right to place a lien upon the property for open, but unpaid homeowner's association fees. The fact that you are in litigation may explain, but may not be a bar to imposition of the lien. Paying the money into escrow may not be the solution you need. After all, the association can not provide the services that you need if it has no money - while it may hurt the developer, it will hurt you more in the long run. My suggestion is that should you pursue litigation, ask your attorney about requesting that the court appoint a person as a receiver to collect and manage the monies paid to the association. To do this, you will need to demonstrate that the monies are being misused (the fact that the payments are insufficient to meet the promises originally made by the developer may not be enough).
You may have a claim and should have an attorney review the matter in greater detail. Given the potential costs associated with litigation and a receiver, the more community members who band together, the more financially able you will be to see the matter through to the end.
Re: Home Owner Association Fees vs. HOA Performance Quality
Over the years, I have been involved in litigation concerning converted condominium and townhouse developments on several occasions. I frequently represent homeowners associations in litigation concerning transition from developer control to homeowner control. There are many options that you may have. However, you may place yourself at risk (for liens and substantial additional cost for atty fees and collection costs) if you simply pay money into escrow.
Instead, you should find an attorney who practices in this area of law (which is rather specialized) and have your facts reviewed along with your governing documents. Then, organize a group, mobilize and work together.
There may be options that you have not considered. There may also be options short of litigation.
I highly recommend that you contact the Maryland Homeowners Association (in Bethesda, MD). That is an activist group that stands up for the rights of individual homeowners within condo and homeowners associations. For many years, I served as legislative counsel, and/or general counsel for MHA. I have seen how their volunteers can help groups that are entering potentially contentious transition from developer to homeowner control.
Please feel free to contact me if you want info on how to find MHA or for other information.
Lawrence R. Holzman, Esquire
Joseph, Greenwald & Laake, P.A.
6404 Ivy Lane, Suite 400
Greenbelt, MD 20770
(301) 220-2200
fax (301) 220-1214
Disclaimer: Please note that the posting of this response is not intended to constitute legal advice. You should contact an attorney to obtain information applicable to your situation. This posting is not confidential or privileged and does not create an attorney/client relationship.
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