Legal Ruling Leads to HOA Scramble
A recent court battle that ended up costing a
homeowners association nearly $100,000 has HOAs all across Virginia
scrambling to ensure their rules won’t cost them down the road.
The case in question started when Sam and Maria Farran, who lived in the Olde Belhave Towne Owners Association, posted an Obama for President sign in their front lawn. The sign was too large, according to the Association’s rules, and the Farrans were asked to take it down. After refusing to remove the sign, the HOA passed new rules allowing the association to levy fines to enforce restrictions. The Farrans sued the association and were eventually awarded nearly $100,000 in legal fees.
The dust is just now beginning to settle in the
case, but not before more than $400,000 was spent in legal fees. Most
importantly, a Judge ruled that an HOA may impose fines, but only if its
originating documents expressly allow it to levy fines, or eventually
adopt rules and regulations which impose fines.
Lawyers are advising HOAs to take a conservative approach and to amend any documents or bylaws that might be in violation of the ruling. This can be extremely hard work, because many HOAs require two-thirds or even 75 percent of homeowners to agree to ratify changes to certain documents. However, the alternative is to allow potentially illegal rules to stay on the books, opening the HOA’s up to future legal action by unhappy members.