Many communities have established homeowners’ associations (HOA) that set out specific rules and regulations that all residents must follow. The regulations may specify the color you may paint your home, how long the grass may be, and how many cars may be parked in the driveway and/or street at any time. Residents of that community who violate the rules and regulations will be asked to comply and may subsequently be fined. HOAs detail these rules and regulations in their Declaration of Covenants, Conditions, and Restrictions (CC&Rs). The CC&Rs and other governing documents will also include what role the HOA plays in the community and for what the HOA is responsible.
HOAs are almost always responsible for maintaining the common areas of the community. Common areas may include the community park, clubhouse, tennis court, fitness room, pool, ponds, sidewalks, parking garage, elevators, and security gates. To maintain the community, the HOA collects dues from each of its residents either monthly or annually. A resident’s failure to pay dues as required may result in monetary penalties and HOAs might be entitled to place a lien on the resident’s home.
Just as residents must follow the rules and regulations set forth by the HOA, the HOA must adhere to their own rules and follow through with their responsibilities. If HOAs fail to maintain, repair, or replace common areas as required by the CC&Rs or other governing documents, residents are entitled to take action against the HOA. It is recommended that residents meet with the HOA first to resolve issues and if a meeting does not initiate action by the HOA to remedy the issue, residents may take legal action. Common claims against homeowners’ associations are breach of fiduciary duty, breach of covenants, and negligence.
Breach of Fiduciary Duty
Under the Texas Uniform Condominium Act, a breach of fiduciary duty claim may arise against the HOA. The Texas Property Code provides that “each officer or member of the board is liable as a fiduciary of the unit owners for the officer’s or member’s acts or omissions. Tex. Prop. Code § 82.103 (West 2017). To prove a breach of fiduciary duty, a homeowner must prove three elements; (1) a fiduciary relationship existed between plaintiff and defendant; (2) a breach by the defendant of his fiduciary duty to the plaintiff; and (3) an injury to the plaintiff or benefit to the defendant as a result of the defendant’s breach. Yeske v. Piazza Del Arte, Inc., 513 S.W.3d 652, 661 (Tex. App.—Houston [14th Dist.] 2016), no pet. Unless modified by the bylaws, CC&Rs or other governing documents, a homeowners’ association owes a fiduciary duty to all community residents and may be subject to fiduciary liability.
Breach of Covenants
To pursue a claim of breach of covenants against a homeowners’ association, it is important to review the CC&Rs and any other governing documents to assure a covenant has been breached by the HOA. These governing documents serve as contracts between the HOA and the homeowners of the community. If the HOA breaches a rule or regulation of the governing documents, homeowners may have grounds for a lawsuit and whether a contract has been breached is a question of law for the court.
Where the HOA has contractually undertaken a duty to maintain and control the common areas and has failed to do so, a homeowner may pursue a claim of negligence. The elements of negligence are “the existence of a legal duty, breach of that duty, and damages proximately caused by the breach.” Gharda USA, Inc. v. Control Solutions, Inc. 464 S.W.3d 338, 352 (Tex. 2015).
Many HOAs are contractually obligated to maintain the common areas of the community. If the HOA has failed to do so, breach of fiduciary duty, breach of covenants, and negligence may be appropriate legal actions, among others. Contact a competent attorney to assist with exploring your options to remedy issues with homeowners’ associations or initiating any claims against HOAs.
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