Beware unchecked HOA powers

In a recent letter to The Nugget (June 18, 2014), I warned Tollgate residents that a proposed amendment to the community's CC&Rs would, if approved, broadly erode members' property rights by ceding them to the neighborhood's board of directors.

Whether you live in Tollgate, Crossroads, Black Butte Ranch or any other subdivision administered by a homeowners' association, the potential for a governing body to amass disproportionate power and wrest fundamental rights from its members always exists. The gateway to such abuse is often seemingly innocuous language appended to the community's CC&Rs - language that nevertheless can have broad and severe legal consequences.

Consider this column a wake-up call and case study of what can happen in your community.

In Tollgate's case, the Trojan horse is Article 7.14, a clause in the "Attorney Recommended Changes" to the CC&Rs that was ostensibly written to enforce reasonable maintenance of lots by their owners.

A good idea, except the article's language is much too broad and invites abuse of authority.

Taken literally, it empowers the community's board of directors or an architectural review committee (ARC) to arbitrarily and autocratically declare any item on a resident's property - such as a garden feature, patio furniture or air conditioner - is unsightly and must be removed.

If the property owner refuses to give up the item, the homeowners' association could sue them or trespass their property to remove it.

Property owners need to beware that, as in the Tollgate case, a dangerous clause such as this may be included in a larger package of worthier amendments for expediency's sake - or in the hope it will go unnoticed in the mix. In such cases, a power-hungry board may be hoping discerning voters will hold their noses and vote "Yes," so the deserving bits will pass.

When debate erupts over a proposed amendment's possible repercussions, it's also important to remember that the wording of the legal document is all that matters.

Case in point: To secure passage of Article 7.14, the Tollgate board recruited attorney Max Merrill last week to write a letter to all residents in an attempt to assuage fears the homeowners' association was over-reaching.

In his letter, Mr. Merrill stated that none of the frivolous enforcement actions I warned could be prosecuted against property owners pursuant to Article 7.14 "are matters which are of concern to the ARC or the Board." But because Article 7.14 lacks legally binding guidelines and restraints that specifically forbid such actions, no determination of the merit of specific enforcements need be made and the board would have no legal bounds to its newfound authority.

The fact remains that Mr. Merrill's verbal reassurances would not supersede a legally binding document in a court of law, and in a dispute a judge would surely hew to the legal interpretation of the CC&Rs' text. The takeaway is that, in deciding whether to vote for an amendment, you should always rely on how the article reads, not how someone purports it will or will not be implemented and enforced. Soothing talk to the contrary does not change the authority of a legal document.

It's also important to realize that any changes to CC&Rs will live on long after the current board members that fostered them have retired from service. You may implicitly trust the people who currently govern your community. Keep in mind that although the incumbent board may be people of good will and sound reason, the next board may not. You owe it to yourself to think about how any proposed changes to your community's CC&Rs may be interpreted and enforced well into the future.

In its current form, Article 7.14 makes every single Tollgate resident vulnerable to the capricious abuse of unchecked power held by a small group of people. Your community is next. Read and evaluate proposed amendments to CC&Rs thoroughly. Vote carefully. Your property rights are at stake.

Sisters resident Michael Cooper has written several hundred articles for national magazines and is currently a contributing editor for Mix.