Knowledge = Power. Unity Increases Power

The key to your success in a dispute with the board, assuming you are in the right, and assuming they are abusing their power, is your perspective and your strategy. Your perspective has to include the fact that you’re in an unfair process. They have an attorney and at this point, you do not. So your perspective includes reality, but not doomsday.

Your strategy will be to trumpet the right rule to the board and to your fellow members. When you address the board, you keep bringing up the right rule and the fact that you didn’t make it up, it’s the law according to the state. They may try to transfer the argument to a parallel issue. But you keep coming back to what the rule says, and you observe the board members because there’s probably going to be one or more that can be persuaded to your point of view. They just need a little courage and some part of the right rule to justify their decision in your favor.

During all this process, you want to make sure that you have not overlooked a mediation process available in your governing documents. Some bylaws allow for third-party mediation, others allow for a volunteer group of members to mediate or help mediate a dispute between an owner and the board. The board may have the power according to the bylaws and they may have the services of an attorney, and that puts you at a disadvantage. But you can overcome that disadvantage by staying on message (the right rule) and drumming up support for your cause. When your dispute comes before the board you want fellow members there to show support, and to speak in your behalf. The more support you can get to show up with you before board, the more you even the playing field. It takes hard work, and puts a lot of us out of our comfort zone.

Make sure you understand section 209.5 of CCIOA which says that regardless of your HOA’s declaration, bylaws etc., “the association may not fine any unit owner for an alleged violation unless: ….” You cannot be fined unless there is a written policy governing the imposition of fines, and that policy includes a fair and impartial fact-finding process. When you look in the statute, go to section 209.5 (2), and arm yourself with that information. Make notes on it or print out and take it with you, just make sure you understand your rights according to the law.

As I wrote in a previous post, this is not a last-minute strategy. If you’re in the last minute of a dispute, and stand to suffer loss, then perhaps you should hire an attorney. On the other hand, this strategy will serve you well, and may even bring about some change on your board of directors, as they are instructed and reminded that their conduct is governed by Colorado law.

The “Right” Rule

5/20/2012

One of the most challenging aspects of the HOA governance model is the fact that there’s more than one source that describes the validity of a rule or regulation, but only one source that determines whether it’s valid or not. In Colorado, HOAs are under the rules and regulations of the Colorado Common Interest Ownership Act (CCIOA), the Colorado Non Profit Corporation Act, the HOA’s own Articles of Incorporation, Declarations, Bylaws, Rules, Regulations, and Policies. State law often allows what’s stated in the Declarations to prevail (be the final source of determination on a subject), and other times the final determination may be found in the bylaws or the Non Profit Corporation Act, or CCIOA itself. The point is that just because authority is given in your bylaws or declarations to owners or board, that fact alone doesn’t make it legal. An HOA’s bylaws often have provisions that are in conflict with state laws or regulations, and even in conflict within their own governing documents.

This fact is especially important in owner/board disputes, because knowing the final and prevailing rule, and its source, can put all arguments to rest that are based on an invalid clause in one or more of the governing documents. A little later on, I’ll tell you about a very simple and user-friendly app that enables you to quickly find that final source of authority in CCIOA.