How Delaware HOA Laws Create Complications for Residents and the Justice System

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  • Despite efforts to resolve disputes in communities of common interest, these disputes still burden the justice system.
  • Lawyers recognize that dealing with this body of law is complicated and also costly for people who want to pursue legal action.
  • These challenges are even more evident in places like Sussex County, where booming development and HOA requirements are driving more lawsuits over issues within communities.

If you live in a community that requires dues like a homeowners association, Delaware laws make it difficult to fight any litigation, from an arbitrary fine to a ban on community amenities.

Whether they rent or own, residents of these common interest communities are subject, whether they know it or not, to the preferences, actions or anger of the group of people who run them – with little recourse to oppose the decisions made by the people who control these communities. communities. This is because it is difficult even for landlords or tenants to know who to complain to if something goes wrong and the high cost of taking a case to court if necessary.

Communities of common interest—of which there are 2,000 to 3,000 in Delaware—include homeowners associations (HOAs), condominium or cooperative boards, and maintenance companies. Civic associations are not considered communities of common interest because they cannot impose the collection of fees.

Required by Delaware code: Communities of Common Interest, or CICs, are contracts created by real estate developers to fix the restrictions or conditions of living in a community. This constitutive document authorizes the collection of mandatory and enforceable annual fees for the maintenance of the common areas. In turn, the developer gives this contract to a group of people within the community to administer and enforce it.

Incorporated or not: CICs legally own the common areas of a development, such as parks, roads, community amenities, and stormwater management systems. The group of people who control the CIC have the power to levy fines and impose penalties for non-compliance with the regulations.

The law is clear: The governance of these shared amenities must be documented in bylaws and registered with the respective county recorder’s office. Too often, however, CICs are not run according to their bylaws or apply the bylaws unfairly – if they have any bylaws at all.

This information is from the Office of the Ombudsperson for the Common Interest Community’s 2019-2020 Annual Report, the latest report available. The CIC Ombudsman position, within the Fraud and Consumer Protection Division of the Department of Justice, was created to educate interested parties about the rights and requirements under the Delaware Code for Communities of Common Interest, provide guidance for law enforcement, and provide avenues for dispute resolution outside of the system judicial.

Disputes involving these communities of common interest burden the courts anyway. With the easy possibility of escaping liability, it seems the only recourse for aggrieved landlords and tenants is to sue, live with the decision, or move out.

Read the Ombudsman’s 2019-2020 report here.

HOA prohibits family from using pool

The Gould family of New Castle County were left bewildered after receiving a notice this summer from the Stonebridge Townhomes Owners Association, an HOA, stating that the whole family was prohibited from using the community pool.

In early July, Matthew Gould went swimming in their community pool at Stonebridge Townhomes. After his swim, Matthew said he was approached by the lifeguard who asked him to provide him with his pool pass. Matthew said he showed the lifeguard the pool pass, but it led to an argument and the police were called in to mediate.

No charges were filed, but the family later received a notice from the HOA, addressed to their landlord, advising that “pool (sic) privileges have been revoked” for the remainder of the pool season. 2022.

The Stonebridge Townhomes Owners Association handbook, which documents the community’s bylaws, states that hearings must be scheduled within 10 days of receiving a written request for a hearing.

No further communication came directly from the HOA even after the Goulds requested a hearing regarding the decision.

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“They didn’t respond to me and never responded to me,” Shamiya Gould said, Matthew Gould’s wife. “They just said my family and I weren’t allowed in the pool.”

No response was received from the Stonebridge Townhomes HOA board when asked to comment on this story.

Restrictive Covenant Deeds, HOA and DUCOIA

A negligent response from an HOA is typical, according to the ombudsman’s report and Kent County Attorney Dean A. Campbell.

“This [family’s story] is something I hear about daily or weekly,” said Campbell, who has practiced HOA law for 25 years.

In an attempt to govern disputes that may arise from communities of common interest, the state has created the Delaware Uniform Common Interest Ownership Act or DUCOIA. Its provisions are meant to guide developers and people living in these communities on how to live in peace, but Campbell said “it’s a very long… confusing set of laws”, which he says has put years to many lawyers to understand what the law says and does.

The law is based on the common law for deed covenants, Campbell said, noting “there is really no regulation or oversight as to what goes into those rules.”

In the past, the restrictions found in these deed covenants could be for something insignificant, like prohibiting someone from shaking a dust cloth out the window. In some cases, they excluded people of a certain race, ethnicity or religious affiliation. State lawmakers created DUCOIA in hopes of providing a roadmap for civility in old communities with old restrictions and new communities with different perspectives. In any case, many people are unaware of this law and even ignore it when they are.

If discrimination against a person with protected class status is suspected, a complaint may be filed with the Delaware Division of Human Relations. Alternatively, a landlord or tenant may file a complaint with the CIC Ombudsmanbut this office does not have the power of execution of a court.

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HOAs are protected by corporate law and associated fees

If an owner feels they are being harmed by their shared community of interest, Campbell said there are few options available if the board does not follow valid bylaws. A landlord or tenant can file a complaint with the ombudsman, but that office reports a large backlog of complaints awaiting processing.

Even then, many disputes can only be resolved by the Court of Chancery.

The New Castle County Courthouse, which houses one of the halls of the Delaware Chancery.

“Probably the most expensive court in Delaware to litigate,” Campbell said, “[and] an incredibly full file.”

And, as esteemed as Chancery Court is, Campbell said that when it comes to matters involving Delaware’s Uniform Common Interest Property Law, there isn’t much legal precedent for interpreting the various sections of the law.

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With a growing number of residential developments in Sussex County, the power of HOAs hangs over everyone who moves into one. This is because Sussex County requires developers to form a homeowners association for their development.

Campbell attributes many of his HOA cases to properties in Sussex County. From his perspective, as more and more subdivisions were created, more and more HOA disputes followed, he said. Many of his clients approach him feeling intimidated by their HOA, Campbell said.

Most HOAs are also corporations and are subject to corporate law. When Campbell sues a corporate HOA in Chancery Court, he said he sues them using corporate law tactics, claiming the directors of the HOA harmed the company through their actions.

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Campbell said “HOAs all have the same authority but not the same oversight” as charter towns and cities.

Since homeowners associations, condominium or co-op boards, and maintenance companies legally own their community’s infrastructure, they set the rules for how the property is used and who has access to it.

“They’re using that leverage and they have every right to do that,” Campbell said. “The problem is how they do it.”

If someone acting on behalf of a legal charter city makes a mistake, it is subject to the Freedom of Information Act and the Department of Justice could step in to correct it or even bring an action on behalf of the injured party. HOAs and other forms of CICs are largely immune to these actions.

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“Until the Legislative Assembly steps in, there’s really nothing to stop [them]”Campbell said.

Sussex County HOAs, Campbell said, have become keenly aware of the law’s shortcomings and are not intimidated by the threat of a lawsuit.

“They’re confident that most homeowners won’t have $10,000 or $20,000 to throw at lawyers to sue the use of a swimming pool,” he said.

As for the Goulds, the couple said that due to the way they were treated by this particular lifeguard and the HOA’s response, they felt unwanted and too uncomfortable to live at Stonebridge Townhomes. They have since left the community.

Still embarrassed by the actions of the Stonebridge Townhomes HOA, Shamiya Gould added that she is still considering taking legal action.

Read the full report:

Contact journalist Anitra Johnson atajohnson@delawareonline.com or 302-379-5786 with tips and story ideas. Follow her on Facebook.

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