It is essential to comprehend the various federal laws governing HOAs. These laws aim to regulate homeowners associations in some issues of governance and restrictions. By familiarizing themselves with these laws, board members can protect their HOA from potential liability.
What is the Impact of Federal Laws on HOAs?
Federal laws have a significant impact on homeowners associations because they override all HOA governing documents. Even if a community’s CC&Rs, bylaws, or rules say otherwise, the HOA must follow federal law.
How do federal laws impact HOA rules? Several federal laws offer anti-discrimination protections, disability accommodations, and military protections. If an HOA enacts or enforces a rule that contradicts a federal law, that rule becomes void.
What are the Federal Laws That Regulate HOAs?
Homeowners associations function similarly to nonprofit corporations. In many states, they are even required to register in this manner with the Secretary of State. Like other corporations, HOAs must comply with specific federal laws that govern their operations. Knowing these laws helps protect the community and board members from legal issues.
Here are the HOA federal laws worth noting.
Fair Housing Act
One of the most important federal laws on HOAs is the Fair Housing Act. The Fair Housing Act (FHA) bans housing discrimination based on race, color, sex, religion, national origin, disability, and familial status. This means homeowners associations can’t block someone from buying, renting, or using property due to their membership in one of these protected groups.
A common violation involves restricting families with children. Some HOAs try to stop them from renting homes or limit kids from using specific amenities. Although age is not directly listed in the FHA, courts often treat age-based rules, especially those affecting children, as unlawful under the Act.
To stay compliant, associations should avoid rules that mention age. For instance, pool rules can be based on height but not age. Boards should also check that screening procedures or community rules do not unfairly affect any protected group.
Additionally, HOAs must allow reasonable accommodations and modifications for people with disabilities. This can include adjusting rules or making common areas more accessible. For example, if pets are not allowed, the HOA must still permit service or emotional support animals when needed.
Americans With Disabilities Act
The Americans With Disabilities Act of 1990 (ADA) bans discrimination against people with disabilities. It mainly applies to public spaces and facilities, which can impact homeowners associations that have common areas accessible to the public. The ADA does not cover areas that are only available to members and their guests.
In HOA communities, public accommodations include any space that the association allows the general public to use. This can include areas rented out or used by groups like schools or churches. If the HOA sells public passes to access amenities, those areas are also considered public accommodations and must comply with the ADA.
Freedom to Display the American Flag Act
Another notable federal law on HOAs is the Freedom to Display the American Flag Act of 2005. This applies explicitly to homeowners associations. It bars these communities from creating or enforcing rules or agreements that prohibit residents from flying the U.S. Flag on their property.
While associations can’t ban flag displays, they can set reasonable rules about when, where, and how the flag is shown. The law does not protect displays that go against the U.S. Flag Code, so HOAs may restrict flags that homeowners fly disrespectfully or offensively.
The Servicemembers Relief Act
The Servicemembers Civil Relief Act (SCRA) offers protection, both financial and legal, to members of the United States Army, Navy, Air Force, Marine Corps, and Coast Guard from foreclosures and debt collection. It also applies to homeowners associations.
As one of the federal laws affecting HOA communities, the SCRA covers the following:
- Active duty service members
- Reservists called to active duty
- National Guard members mobilized for over 30 days
- Commissioned officers in the Public Health Service or NOAA on active duty
Over-the-Air Reception Devices Rule
When it comes to federal laws on HOAs, it’s important not to forget the OTARD Rule. The Over-the-Air Reception Devices Rule (OTARD) stops homeowners associations from enforcing rules that interfere with the installation, maintenance, or use of certain antennas and reception devices.
The rule protects the following:
- Satellite dishes one meter or less in diameter (or any size in Alaska) for direct broadcast
- Antennas used for receiving television signals
- Devices that receive fixed wireless or broadband internet signals
- Antennas one meter or less that send or receive video programming through multipoint distribution services
Fixed wireless protections don’t cover antennas for FM radio, AM radio, CB radio, HAM radio, or Digital Audio Radio Service (DARS), among others. Additionally, OTARD only applies to areas where a homeowner has exclusive rights, such as their private property. Homeowners can’t place antennas in shared or common areas of the HOA.
That said, associations may still enforce reasonable rules about satellite dishes and antennas. These rules must not make installation or use more costly or difficult. For instance, the HOA can set limits on where owners can place antennas.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) sets rules for how debt collectors must operate. Debt collectors are third-party entities that regularly collect debts from consumers. Based on this definition, homeowners associations usually don’t qualify as debt collectors.
The FDCPA bans unfair, deceptive, and abusive methods of collecting debts. It also outlines specific steps debt collectors must follow during the collection process.
Even if HOAs don’t fall directly under the Act, they should still understand its provisions, especially when hiring outside collection agencies. Moreover, if an HOA uses a different name to collect payments, the law might view it as a debt collector. In addition to the federal rules, many states have their fair debt collection laws that may apply.
The United States Bankruptcy Code
The United States Bankruptcy Code stops HOAs from trying to collect debts that are part of a bankruptcy case. This includes actions such as filing lawsuits or placing liens. Collections can only continue once the court removes the “automatic stay” or the case is no longer active.
If an HOA tries to collect during the automatic stay, the bankruptcy court may issue penalties. These can include returning funds or removing a lien on the property.
Sometimes, homeowners receive a “discharge” from the bankruptcy court. This means they are no longer legally responsible for certain debts, including unpaid dues listed in the bankruptcy.
It is worth noting that only debts included in the case are eligible for discharge. It does not cover any new fees that come after the filing. Furthermore, liens tied to those debts may remain, and the HOA can act on them once the court lifts the stay.
Getting Help
Many communities struggle to understand the federal laws governing HOAs. Considering their importance, board members will often hire an attorney or an HOA management company to help interpret the law.
National Realty Partners is a leading provider of HOA management services in Virginia. We help communities thrive. Call us today at 703-435-3800 or request a proposal online to get started!
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