Understanding Homeowner Rights: Suing an HOA for Rule Violations

Homeowners can sue mismanaged HOAs.

A homeowners association, for HOA for short, is a business created to manage and regulate a subdivision or planned unit development. Sometimes, however, the homeowners may need to regulate the HOA, instead of vice versa. Homeowners who belong to an HOA generally have the legal standing to bring a lawsuit against the HOA away to compel compliance with CC&Rs and rules and regulations of the HOA.

Breach of Contract

Covenants, conditions and restrictions, called CC&Rs for short, are a collection of rules and regulations that govern the HOA and the planned unit development. CC&Rs create a contract between the HOA and all of the homeowners within the development. When either a homeowner or the HOA fails to comply with the CC&Rs or other rules and regulations of the HOA, this constitutes a breach of contract that opens the door for a potential lawsuit against the breaching party.

HOA Membership

In addition to having the right to sue for breach of contract, a homeowner may also have the right to bring a lawsuit against the HOA in the homeowner's capacity as a member of the HOA business entity. An HOA is a type a business entity formed under state law, sometimes a for-profit corporation, but most often a nonprofit corporation. As a corporation, the HOA must follow the rules and bylaws of the corporation. If the HOA does not follow its own corporate rules, a homeowner, as a member of the corporation, has the right to bring a lawsuit to compel compliance with the HOA governing documents.

Remedies

A homeowner filing a lawsuit against the HOA may have the option of a few remedies, including contract damages, an injunction or some other type of judicial order. If the homeowner has been personally damaged by the HOA's failure to comply with the rules and regulations, the homeowner may be able to recover damages from the HOA. For example, if the HOAs failure to honor the CC&Rs has diminished the value of the homeowner's property, the homeowner may be able to recover damages to compensate for that loss. More likely, however, is that the homeowner will obtain an order compelling the HOA to begin complying with the CC&Rs and any other rules and regulations that govern the HOA.

No Personal Liability

Most documents that create and govern homeowners associations limit any potential liability on behalf of the individuals who manage and direct the HOA. This means that any remedy a homeowner has against the HOA is a remedy against the business entity, not against the individuals who actually run the HOA. A homeowner cannot, for example, personally sue a member of the HOA board. This means a homeowner cannot make a personal vendetta out of a lawsuit against the HOA or a managing member of the HOA.