Key Takeaways

- HOA board members must follow the governing documents and California laws, including the Davis-Stirling Common Interest Development Act, to reduce the risk of disputes and potential liability.

- Board misconduct allegations often involve financial management issues, abuse of authority, and noncompliance with open meeting and records requirements.

- Homeowners may have options to raise concerns and seek accountability through internal dispute resolution, alternative dispute resolution, and (in some circumstances) court proceedings.

- Depending on the facts and the claims involved, California law may allow homeowners to seek court orders (including injunctions) and, where legally available, monetary remedies.

- LS Carlson Law represents clients in HOA-related disputes, including matters involving alleged board misconduct, under California law.

When homeowners associations (HOAs) are not managed properly, residents may find themselves in frustrating, even hostile, situations. In California, HOA board members are entrusted with making decisions in the best interest of the community. However, this authority can be abused, leading to what’s known as HOA board misconduct. Understanding what constitutes misconduct and how to address it is crucial for homeowners facing such challenges.

At LS Carlson Law, we help clients navigate legal disputes involving alleged HOA misconduct and questions about rights and remedies under California law. This article is for general educational information only and is not legal advice.

Understanding HOA Board Misconduct: What’s at Stake?

An HOA board's role is to manage the community in accordance with the governing documents, California law, and the best interests of the homeowners. When a board member or board majority oversteps these boundaries, their actions may be alleged to constitute misconduct. Here are several key areas where disputes commonly arise:

1. Violation of Governing Documents

HOA board members are generally expected to follow the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), Bylaws, and other governing documents. These documents are legally enforceable and set the rules for how the association is operated. Actions taken by the board that are inconsistent with the governing documents—such as adopting or enforcing policies without following required procedures—may provide a basis for a legal claim, depending on the circumstances.

2. Failure to Comply with the Davis-Stirling Act

The Davis-Stirling Act governs many aspects of HOA operations in California, including meeting practices, certain voting procedures, and member access to association records. If the board fails to follow applicable provisions—such as providing required notice for meetings, complying with open meeting rules, or responding appropriately to records requests—members may raise concerns about compliance and transparency.

3. Improper Use of Funds

HOA boards are responsible for managing association funds and making financial decisions consistent with their duties and the association’s governing documents. Allegations of mismanagement or misuse of funds—such as expenditures that do not appear to serve a legitimate association purpose or failures to follow required financial procedures—can lead to disputes and, in some cases, legal action.

4. Board Members Acting Beyond Their Authority

When board members take actions outside the scope of their authority, such as entering into certain contracts or making significant decisions without following required approvals or procedures, those actions may be challenged. Boards generally must operate within the framework outlined in the governing documents and applicable law.

5. Failure to Provide Equal Treatment

HOAs are generally expected to apply and enforce rules in a fair, consistent, and nondiscriminatory manner. Selective enforcement or preferential treatment can create legal risk and may be challenged by affected homeowners. Conduct that violates state or federal anti-discrimination laws may also expose the association to potential liability.

6. Improper Use of Executive Sessions

HOA boards may hold executive sessions for certain topics permitted by law, such as matters involving litigation, member discipline, personnel issues, or contract negotiations. However, using executive session to avoid required transparency, or to address matters that should be handled in an open meeting, can lead to allegations of noncompliance. California’s open meeting requirements also include rules about notice, member rights, and reporting certain executive session actions.

7. Harassment or Retaliation

Disputes can escalate when homeowners believe they are being targeted for raising concerns, requesting records, participating in elections, or exercising other rights. Alleged retaliation may include increased enforcement activity, fines, or restrictions that appear inconsistent with governing documents or law. Depending on the facts, these situations can involve multiple legal issues, including statutory rights and, in some circumstances, court remedies.

What Constitutes HOA Board Misconduct Under California Law?

Under California law, allegations of HOA board misconduct may involve actions that breach governing documents, violate statutory requirements, or otherwise exceed the board’s authority or duties. Depending on the facts, such conduct can lead to civil claims, and in limited circumstances, certain conduct could implicate criminal laws.

Misconduct might involve:

- Breach of fiduciary duty

- Abuse of power or authority

- Violations of the Davis-Stirling Act

- Failure to properly disclose or produce information when required

- Engaging in fraudulent or discriminatory practices

How Can Homeowners Address HOA Board Misconduct?

If you believe that your HOA board is engaging in misconduct, there may be several avenues to consider in California, depending on the issue. Homeowners often start by using the association’s internal processes (such as internal dispute resolution), requesting association records where permitted, participating in meetings and elections, and using alternative dispute resolution (such as mediation) when required or appropriate. In some situations, a homeowner may pursue claims in court, subject to applicable procedural requirements and any pre-litigation ADR obligations.

A potential remedy in some cases is seeking a court injunction to stop alleged ongoing violations. Depending on the claims and proof, monetary remedies may also be available under certain statutes or legal theories.

Legal Protections for Homeowners in California

California law provides various protections and procedures that may apply in HOA disputes. For example:

- D&O insurance may provide coverage for board members in some situations, subject to policy terms, exclusions, and applicable law.

- Homeowners may be able to bring derivative actions in some circumstances to address alleged breaches of duty, subject to procedural requirements.

- For certain HOA-related claims, the Davis-Stirling Act requires alternative dispute resolution (ADR) to be attempted before filing a lawsuit, with some exceptions.

How LS Carlson Law Can Help

LS Carlson Law represents clients in HOA-related disputes and litigation, including matters involving alleged board misconduct and compliance with governing documents and the Davis-Stirling Act. The appropriate next steps in any matter depend on the specific facts, the governing documents, and the applicable law.

Protect Your Rights Against HOA Misconduct

HOA board misconduct issues can be fact-specific and may involve overlapping statutory requirements, governing documents, and procedural rules. Homeowners may benefit from learning about their association’s documents, the Davis-Stirling Act, and the dispute-resolution processes that may apply before litigation.