Why is the Small Claims Court HOA Solution NOT a Good Solution for the Homeowner?

The Small Claims Court Solution:

· Requires an HOA to take HOA Members to small claims court before fining the homeowner.

· Gives the small claims court authority in HOA cases to award injunctive relief.

· There would still be a maximum dollar amount that small claims cases would be allowed to handle. In most states it is currently between $5000 to $15000.

What is the problem we are trying to solve?

· There is no government agency that enforces the State HOA Laws or the Governing Documents on the Board Members or Property Managers of HOAs and there are no penalties in the law for Board Members or Property Managers that violate the laws.

· Corrupt Board Members of an HOA can:

     o Use the collective funds of the HOA and the Insurance of the HOA to pay for their attorney fees.

     o They are at no risk when they file a case against a homeowner or the homeowner files a case against the Board.

· Yet the homeowner has to risk their own money, their life savings, and possibly lose their home to pay for their attorney fees.

· As there is no enforcement of the laws, the HOA Board members effectively become virtual dictators and often can’t be voted out because they control all aspects of the elections and have control of the HOA attorney and the Property Managers.

· If the HOA loses the case the HOA members as a whole pay the judgement and the attorney fees. This only penalizes the other innocent victims of the Board, and causes a rift between the individual homeowner and the rest of the community.

· Even something as little as a FALSE accusation that a homeowner has left their garbage pail out too long, can go on for years in court and run into hundreds of thousands of dollars and possibly end in foreclosure.

· The goal is to find a solution that creates a fair balance of power and minimizes financial damage for all the HOA members.

What are the problems with the Small Claims Court solution?

· Forcing EVERY Governing Document violation into small claims court would DRAMATICALLY increase the load on small claims courts by thousands of cases a year, and requiring more judge and clerks and more court space. This plan would be VERY EXPENSIVE

· Small Claims judges rarely know the HOA laws and would have no reason to know the individual governing documents for every HOA.

· Thus the "trials" will be much less efficient, much more time consuming, less fair, much more likely to be appealed, and overall much more expensive for the courts.  This is a GIANT "fiscal note" which is unlikely to be passed into law.

· And this only cover the cases under the small claims minimums, all the other cases still have to go through higher courts and still have all the problems discussed above.

· Other than allowing injunctive relief, the Small Claims Solution had been available to the homeowner for years. It doesn’t solve the problem.

· If the homeowner wins in small claims court, the HOA can still appeal the case, all the way to the Supreme Court, putting the homeowner under great stress for years of their life and hundreds of thousands in attorney fees.

· Even if the homeowner wins, the court does not enforce the decision so the homeowner still has to collect the funds on their own.

· In many states HOA Attorneys are allowed to present in Small Claims Court, again putting the homeowner into the same situation.

Why is the State HOA Office the Better and really the ONLY real solution?

· The HOA Office is a self funding solution. No money from the Budget, no money from the taxpayers. The program is funded by the HOAs paying $3 per YEAR per MEMBER.

· The plan would likely save the State significant funds because it would pull almost all the HOA cases out of the courts.

· The State HOA Office as described by HRLNG would be a regulatory agency with investigative and enforcement power like OSHA or EPA but on a state level.

· As they would exclusively work on HOA cases, they would be very familiar with the State HOA Laws and also quickly get to know the governing documents of the most troublesome HOAs.

· Their process would be quick and efficient and their decisions would likely be more fair and consistent.

· No attorneys would be allowed by either party unless they choose to appeal the decision of the State HOA Office.

· See the HRLNG #2 Proposed Legislation, at https://www.hoareformleaders.com/ Scroll down to the list, click on #2 and the site will auto scroll down the page to the details.