“Help! What can our HOA do to make this homeowner STOP?! We have a homeowner that is verbally abusive, the name-calling is offensive and vulgar – we feel harassed!”

You often hear us say, serving on your association’s board is a thankless job – and, many of you know this first hand!

Many thanks to Mulcahy Law Firm.

“Harassment” Defined—Black’s Law Dictionary defines harassment as “words, gestures or actions which tend to annoy, alarm or abuse another person.” To annoy, Black’s suggests, is “to disturb, irritate” or “cause discomfort”, while abuse consists of “insulting, hurtful or offensive wrongs or acts.” Whether the incidents are isolated or repetitive, the bottom line will always be whether the targeted individual felt intimidated or threatened, not whether the angry individual intended his/her actions as abusive or intimidating. In Arizona, A.R.S. Section 12- 1809 – “harassment” means a series of acts over any period of time that is directed at a specific person and that would cause a reasonable person to be seriously alarmed, annoyed or harassed and the conduct in fact seriously alarms, annoys or harasses the person and serves no legitimate purpose.

STEPS FOR GETTING THE OWNER TO STOP THE ABUSE

First Step– 1) Tell the individual verbally to stop; 2) keep a journal entry of the date, time and verbiage of calls or encounters; 3) note your verbal or written response; 4) keep all harassing emails.

Second Step– If the harassment does not stop. Have the board or management company write the offending individual a non-threatening letter, or have the association’s attorney write a letter describing the behavior, and stating that the individual will be subject to legal action if the behavior does not stop. (i.e. cease & desist letter from our firm) 

Third Step– When a letter is not enough, the next step is to seek an injunction against the harassment (pursuant to A.R.S. Section 12- 1809). A board member who is on the receiving end of endless, abusive telephone calls or who is regularly assaulted verbally in public by an angry owner may seek an order prohibiting the “bully” from sending him e-mails and/or ordering him to remain a specified distance away.

Courts do not issue injunctions lightly. In most cases, the harassing actions must be part of a pattern rather than isolated incidents and the targeted individual(s) must feel threatened by the actions. If you are dealing with actual physical threats – if an owner raises a fist, pulls a gun or threatens bodily harm, call the police immediately. Even if you do not think the threats are real, having the police respond is a reasonable precaution and having a police report on file will also strengthen your case if you eventually seek an injunction against this individual.

If the Board were interested in pursuing an Injunction Against Harassment, each Board member would need to petition for one on their own against the Owner – the court would not issue “blanket” protection to all Board members. 

RECEIVERSHIP: WHAT HAPPENS WHEN AN ASSOCIATION FAILS?

When HOAs are really struggling, members will occasionally look for an outside party to take over and correct the problem. A “receiver” is that third party. Here are 6 things you need to know about receivership.

What happens when an association breaks down? When associations cease to function properly, everything stops: bills go unpaid, directors resign, and critical maintenance is ignored. In this situation, the remaining board members might look to a court-appointed receiver as a way out. Or they may all resign. But should they?

6 Things to Know About HOAs & Receivership

The appointment of a receiver is a drastic remedy.

Receivership is expensive, time-consuming and someone outside the association makes all the decisions that the Board and/or members would make.

Sometimes receivership is the only remedy…

An association seeking the appointment of a receiver must have a compelling reason that would satisfy the judge that there is an immediate threat of injury, damage or destruction to property and to property values of the residences within the community association. This can happen when there is a deadlock on the board that prevents decisions about critical health and safety repairs.

…after all other efforts have failed.

An association may be required to show to the court different degrees of evidence depending on the reason for its dysfunction. In most cases, the association must show that efforts to resolve the matter were not successful: e.g. ADR failed or was refused, and there is correspondence showing multiple, but unsuccessful attempts to obtain voluntary compliance.

Different events can trigger a motion to appoint a receiver.

Some reasons include member apathy or fear of personal liability (no one will step forward to serve on the board), failure of board to meet its fiduciary duty (failure to undertake reasonable investigations, due diligence or to impose essential emergency assessment), or in a small complex with an even number of units, a tie-vote precludes the passage of a special assessment to fund critical health & safety repairs to structures.

Receivership is not a panacea.

It is expensive, the association loses control, and the court directs the receiver to perform all necessary work. The court may impose assessments, and the law requires a receiver to make monthly reports and to file documents with the court. Both requirements add to the cost of the receiver (usually an attorney), who already charges by the hour to do the work that a volunteer board did before the receiver was appointed.

There is no time limit.

The receiver will stay in place until the problem(s) is solved to the satisfaction of the court.

Avoid Receivership

Receivership is like aggressive cancer treatment: the treatment can be deadly, but it’s the option when all other treatments have failed. Receivership is usually expensive and divisive, and can leave HOA owners powerless. Whether you are a homeowner or board member, you should work aggressively to inform your neighbors about the consequences of receivership and, if possible, avoid it altogether.