In the world of homeowners associations (HOAs), rules can be complex and complicated. Depending on the HOA, rules can be strict, and sometimes, there are complications regarding local laws. It poses a question of whether local law supersedes HOA rules. After all, what happens when an HOA rule violates the local law? These complications can make it challenging to be on the board of directors, as tough calls sometimes must be made. For this reason, having directors and officers insurance is critical to ensuring HOA directors and officers protect themselves in the event of litigation.
Overview of Local Laws and HOA Rules
HOAs can encompass a wide range of rules and regulations. These can include but are not limited to:
- Zoning ordinances: These rules dictate how one can use property based on how the area is zoned.
- Environmental regulations: Many HOAs will determine what is and is not acceptable regarding landscaping, gardens, and wildlife preservation.
- Noise ordinances: These regulations address the acceptable noise level in an area and the hours during which these noises are allowed.
- Property maintenance codes: These regulations require properties to be kept in good condition, maintaining the neighborhood’s visual aesthetic.
These are just a few categories in which an HOA may have regulations. However, the HOA must comply with local laws, and the law will supersede the HOA’s rules. For this reason, HOAs should check that their regulations do not conflict with local, state, or federal laws.
Legal Foundations for HOAs
Generally, a builder or developer starts an HOA when planning the subdivision. After determining the HOA’s rules, the builder or developer files the proper documents with the county, making them legally binding and establishing HOA legal rights.
As the neighborhood develops, the responsibility for the HOA moves to the homeowners. While HOAs legally require homeowners to abide by their rules, they cannot interfere with the laws of the city, state, or country.
Common Areas of Conflict
Potential conflicts can occur between the HOA and the law. Disputes may arise over property maintenance requirements and aesthetic standards, noise and nuisance regulations, zoning and land use restrictions, rental agreements, and pet and animal regulations.
The local law supersedes the rules and regulations of the HOA, meaning that HOAs must ensure they are operating under the law.
D&O Insurance Implications
Because conflict between an HOA and local law can arise, having directors and officers insurance is essential for HOA directors and officers. This insurance will protect HOA directors if a problem arises and someone takes legal action against them.
Before the need for insurance arises, educating HOA directors to stay informed on local laws can help prevent problems. Communicating with an HOA director about their directors and officers insurance needs can help ensure the insurance plan provides what they need. In addition, mitigating risk by complying with the law can help prevent litigation.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.