Basic Principles of Consumer Protection


Sample Model Statute


David A. Kahne

Law Office of David A. Kahne

David A. Kahne

Law Office of David A. Kahne

Houston, Texas

(713) 652-3966

[email protected]


To the memory of Geneva Kirk Brooks and those who stood with her, and to all other homeowners who seek the truth and fight for their rights, I dedicate this proposal.


This proposal would not have been possible without support from Andy Kochera of AARP, and many homeowners, advocates, friends, and family, some of whom must remain anonymous. In particular, I want to thank the following people who both have spent many years to help homeowners, and whose persistently wise advice has shaped this proposal that I hope will benefit others: Beanie, Bob, Tom & Chris Adolph (creators of, Frank Askin, Margaret Bar-Akiva, Shu Bartholomew, Jan Bergemann, Rob Edwards, David Furlow, Pat Haruff, David McDougald, Wendy Laubach, Evan McKenzie, Elizabeth McMahon, Marjorie Murray, Scott Newar, Arlene Nichols, Greg Nodler, Fred Pilot, John Rao, Marian Rosen, Mika Sadai, Monica Sadler, Trevor Sheehy, Barry Silver, George Staropoli, Hal Taylor & Robin Willis.


Common-interest communities play a valuable role in modern America, and generally operate

amicably to the mutual benefit of residents. Homeowner associations in a single-family development, for instance, are often able to provide a number of amenities (such as parks, pools, and club houses) that would be difficult to procure from many cash-strapped local governments.


In addition, by setting architectural standards and maintenance requirements, they may help reassure residents that their investment in the community is well protected. Associations also frequently provide an opportunity for neighbors to meet and socialize as a consequence of regularly scheduled meetings, thus helping foster a sense of community. Some homeowner associations, particularly in gated communities, take responsibility for maintaining private streets, removing snow, and even collecting garbage. Local governments frequently welcome the relief from those burdens. Because associations often promote neighborhood infrastructure and social opportunities, they can be viewed as important players in promoting livable communities for people of all ages. [1] It is noteworthy that 46 percent of owners in single-family homeowner associations are over the age of 50, as are 56 percent of owners in condominium/coop communities (based on AARP Public Policy Institute analysis of the HUD/Census Bureau American Housing Survey).


The purpose of this publication is to outline a key set of ten principles (articulated as a “bill of rights”) that states can follow when developing laws and regulatory procedures for common interest communities. Additionally, associations themselves can use these principles when developing or modifying their own governing documents. Thus, although this publication also contains a sample “model statute” to serve as an example for single-family homeowner associations, the issues addressed are applicable to all forms of common-interest communities. To develop these principles, the AARP Public Policy Institute contracted with David A. Kahne, an experienced attorney who has represented homeowners in a variety of cases, and who has also actively promoted homeowner rights in the Texas state legislature.


The guiding philosophy behind this publication is to promote healthy interaction between residents and their associations by avoiding conflict where possible and resolving it equitably when it occurs. Fair and balanced procedures for information sharing, governance, and dispute resolution make for better communities.


Andrew Kochera

AARP Public Policy Institute


Rapid Growth of Homeowner Associations


Increasing Concern for Denial of Homeowner Rights


Excessive Litigation

Expensive Litigation

Additional Issues Addressed Faced by Some Homeowners

Recent Scholarship and Legislation to Protect Homeowners

Legal Framework for the Homeowner Bill of Rights and Model Statutes





Section 100: Application and Definition

Section 101: The Right to Security against Foreclosure

Section 102: The Right to Resolve Disputes without Litigation

Section 103: The Right to Fairness in Litigation

Section 104: The Right to Be Told of All Rules and Charges

Section 105: The Right to Stability in Rules and Charges

Section 106: The Right to Individual Autonomy

Section 107: The Right to Oversight of Associations and Directors

Section 108: The Right to Vote and Run for Office

Section 109: The Right to Reasonable Associations and Directors

Section 110: The Right to an Ombudsperson for Homeowners

Americans grant broad protection for homeowner rights. As recognized by the United States Supreme Court, “special respect for individual liberty in the home has long been part of our culture and our law.” [2] From roots in our federal Constitution and in every state’s constitution, protections branch out in statutes and court decisions to ensure fairness when any agency regulates homeowners.


However, current laws do not

adequately address many of the needs of the large and increasing number of homeowners regulated by associations in common interest communities. The nature of such communities requires residents to give up some of their autonomy, becoming regulated by an elected association board of directors.


Many residents who live in common interest communities are satisfied with the trade-off between personal autonomy and the benefits of living in such a community. However, problems can arise for a variety of reasons, including misunderstandings of rights and responsibilities or inequitable implementation of policies or penalties by an association board.

A “common-interest community”--sometimes called a common-interest development (CID) or planned unit development (PUD)--often is established by a developer to administer land or a building that is owned “in common,” and also can be created to  provide services or to enforce architectural rules or other regulations (with or without owning common property). Common interest communities range from single-building condominiums and cooperatives to multi-use developments, including single family homes, apartments, retail sites, and sometimes commercial or industrial property. The principles of this report are deliberately broad to apply to a variety of residential settings, while the model statute is an example of how to apply those principles to the case of single-family subdivisions.


From a consumer protection standpoint, the core issues revolve around the fact that the governing documents of an association are generally non-negotiable, were originally drafted by the developer’s attorney, and can be lengthy (sometimes hundreds of pages) and frequently incomprehensible to a nonprofessional. In some geographic areas, purchasers (at least of new homes) may find it difficult to find a neighborhood that does not have an association.[3] Consequently, it is fair to consider whether many owners can be meaningfully said to have understood and consented to the terms of the association’s governing documents, or to have had realistic alternatives to living in a common interest development.


When conflicts do occur, residents have few practical options. This is because associations have the power to make rules (like a legislature), enforce rules (like an executive), and resolve disputes over rules (like a judge)--all through a board of volunteer directors, who may vary substantially in their knowledge, experience, and sometimes intent. In the absence of a separation of powers, homeowners lack vital checks and balances.

[2]  City of Ladue v. Gilleo, 512 U.S. 43, 58 (1994). 

[3]  A reporter recently concluded, “In fast-growing parts of the country, especially in the South and West, essentially all new development involves private community associations.” R. Nelson, “Home Is Where the Rules Are,” Washington Post (12/18/05) at B-2.

Often there is no impartial forum for an aggrieved homeowner other than a courtroom. Few jurisdictions have an effective alternative dispute resolution (ADR) system covering associations in common-interest communities, and few states have meaningful administrative oversight of these associations. Yet many owners cannot afford legal representation. Further, much of the existing law in this field was established by attorneys of developers and property managers, whose own perspective may differ from that of individual homeowners. Most existing laws predate awareness of the need, and of ways, to protect homeowner rights.


The bill of rights proposed in this paper distills crucial principles needed to balance the interests of an association and individual residents, and to foster equitable procedures in case of a dispute.


The principles articulated in the bill of rights apply generally, to single-family

subdivisions as well as to condominiums and cooperatives. [4] To illustrate how to make the bill of rights effective, a sample model statute (here, in the context of single-family subdivisions) is included.

An “association”--sometimes called a homeowner association (HOA), property owners association (POA), or community association--is the organization created to manage the affairs of the common interest community. A board of directors or trustees runs the association, often hiring a management company for day-to-day operations.


Typically, a developer retains control in the early stages of the community, and as the community is built out the association’s members -- commonly homeowners, sometimes other property owners -- elect the board.


Associations usually charge their members annual “assessments,” mandatory dues to pay for maintenance of common property, services, and administration. Some also can charge “special assessments,” such as to repair common property (e.g., condominium roofs) or other capital projects. Well-run associations prepare budgets and maintain reserves to fulfill their charters.


Following each section of the model statute is a discussion of the rationale and method of incorporating the principles.


This discussion cites cases to illustrate the underlying issues, and also references existing statutes.


These principles are not the only important elements of consumer protection, nor is the sample model statute the only way to achieve consumer protection. State legislatures can use the model language as a recommendation, but individual associations also may find the principles and subsequent discussion useful as they review their own governing documents. Such a review can be very valuable for association boards that wish to streamline and improve their own procedures while also finding ways to minimize unnecessary legal costs from disputes. The model statute can also prove to be a valuable refresher for other residents regarding their rights and responsibilities. However, state legislatures play a unique role in guaranteeing basic rights for their homeowner constituents.


This is because legislatures can clearly articulate a standard set of resident rights and responsibilities across communities.

[4]  Implementation of the principles should reflect differences in physical circumstances. For example, in condominiums and cooperatives the shared walls and physical plant, coupled with much larger annual assessments, may suggest different limits on homeowner rights, see Restatement (3rd) of Property, Chapter 6 on Common-Interest Communities at 144 (2000), as well as different protections, e.g., Cal. Civ. Code 1361.5 (protection against lockouts). See also infra n.39 (discussing the Restatement).

Rapid Growth of Homeowner Associations


Professor Evan McKenzie has traced the history of homeowner associations and the rise of what

he calls “residential private government,” emerging from English common law. In this country,

homeowner associations initially were created on a case-by-case basis for unusual circumstances, such as Gramercy Park (in New York, 1831) and Louisburg Square (in Boston, 1844). [5] Today, associations operate under broadly applicable state laws that set the framework for single-family subdivisions and townhouses, condominiums, cooperatives, and the larger scale multiuse developments, some of which cannot be distinguished from towns or cities.

Under such statutes, associations have two critical attributes: homeowners must join, and legally

binding deed restrictions empower associations to regulate homeowners’ use of their property.

Associations typically require assessments (akin to taxation), set design and use restrictions for

property (similar to, but often broader than, typical zoning rules), regulate voting for the board,

and on issues of community concern, impose punishments (e.g., utility cutoffs or fines), and

obtain power to foreclose on homesteads.

Estimates of how many households reside in a common-interest community vary. The Community Associations Institute (CAI) estimates that, in 2005, 22 million homes were in community associations, up from 700,000 in 1970. [6] AARP’s Public Policy Institute analyzed th 2003 American Housing Survey and found that about 11 million homeowners were required to pay fees to some type of association, compared with about 5 million in 1985 [7] While the two estimates differ, it is nonetheless clear that a very large and increasing number of households live in a common-interest community.


One of the fastest growing segments is the homeowner association in a single-family subdivision. In analyzing earlier American Housing Surveys, AARP’s Public Policy Institute estimates that over the past two decades construction of single-family homes in common-interest communities has exceeded construction of condominiums and cooperatives. Consequently, if one assumes the conservative figure of 11 million households in a common interest development,

[5] E. McKenzie, Privatopia: Homeowner Associations and the Rise of Residential Private Government at 9 & 33 (Yale Univ. Press 1994).

[6] See, last visited 11/7/05. See also Committee for a Better Twin Rivers v. Twin Rivers Homeowners Ass’n, 383 N.J.Super. 22, 890 A.2d 947, 955 (App. Div.), certif. granted 2006 (as of 1999, some 42 million Americans lived in associations), citing C.Treece, COMMUNITY ASSOCIATIONS FACTBOOK 6 (Frank H. Spink ed. 1999).

[7] The American Housing Survey, conducted by the Census Bureau, included a question on whether homeowners were required to pay a condominium, cooperative, homeowner association, or mobile home fee. Based on this question, AARP estimated there were 11 million households paying such fees in 2003. If, in addition, any owner of a multifamily unit or single-family attached dwelling (e.g., townhouse or duplex) is assumed to be a member of some form of common-interest community (regardless of whether the respondent pays a mandatory fee), AARP’s estimate rises to 15 million in 2003. In both cases, however, the survey design will miss homes in which the unit is vacant or an absentee owner rents to another household. See (public use microdata).

single-family homes governed by a homeowner association would now account for the majority (58 percent) of those units. [8]


Increasing Concern for Denial of Homeowner Rights

Recent examples across the nation, described below, illustrate what many homeowner advocates perceive as the prelude to even greater conflict, absent legislative reform. Some of these cases have reached the national press, including television reports on 20/20 ABC News, [9] and articles in the New York Times, [10] Christian Science Monitor, [11] and People Magazine.[12] Many more cases can be found on Internet sites where homeowner advocates collect reports. [13] A radio show, [14] blogs, [15] newsletters, [16] and homeowner discussion groups [17] elaborate many homeowner frustrations. [18] Although details of the disputes between homeowners and their associations may vary, they frequently have a profound impact on homeowners.



The most visible controversies arise when associations foreclose against homeowners, often for

disputes that start over small sums. For example:


In California, retirees Anita and Thomas Radcliff lost their home in 2003 after missing a payment of $120. Done by non-judicial foreclosure, no judge heard the dispute before the home sold for $70,000, one-quarter of its appraised value. [19]

[8] Id. CAI likewise estimates that “[h]omeowners associations and other planned communities account for 55-60% of the [22 million], condominiums for 35-40% and cooperatives for 5-7%.”, last visited 1/24/06. Supra n.7. A California study found more than 40 percent of single-family homes sold in the 1990s were in planned developments. Gordon, Planned Developments in California: Private Communities and Public Life 3 (Cal. Pub. Policy Inst., 2004); see also Committee for a Better Twin Rivers, supra n.7, 890 A.2d at 955 (in NJ, “40% of private residences and over 1,000,000 people governed by homeowners’ associations”).

[9]  E.g., “Members of Homeowners Association Angrily Protest Rules” (April 19, 2002),, last visited 12/28/05.

[10]  E.g., M. Rich, “Homeowner Boards Blur Lines of Just Who Rules the Roost,” New York Times (7/27/03), at 1.

[11] E.g., M. Sappenfield, “The Backlash Against Homeowners’ Groups,” Christian Science Monitor (10/14/04) at 1; see also T. Vanderpool, “But isn’t this my yard? Revolt against neighborhood rules,” Christian Science Monitor (8/19/99) at 2.

[12]  E.g., R. Jerome, O. Jones, L. Stambler, S. Kapos, S. Morrissey, M. Nelson, and C. O’Connor, “Loathe Thy Neighbor, ” PEOPLE MAGAZINE (10/4/04) at 123.

[13] E.g.,, last visited 9/9/05 (collecting news articles from across the country). See also, e.g.,, last visited 9/9/05 (from 1985 to 2001, more than 1,000 lawsuits each year sought foreclosure filed in just one Texas county, discussed below).

[14]  See, last visited 9/9/05.

[15]  E.g., (Prof. McKenzie), last visited 11/6/05.

[16] E.g.,, last visited 9/9/05.

[17]  E.g.,, last visited 9/9/05.

[18]  See also, e.g., (collecting links to other informational sites and to state-based homeowner advocacy groups), last visited 9/9/05.

[19]  J. Wasserman, “California on verge of critical change in homeowner association laws,”, San Diego Union-Tribune (8/8/04),, last visited 1/2/06. M. Kolber, “Couple’s Plight Raises Questions,” Sacramento Bee at A3 (4/18/04); C. Durso, “The War on Foreclosure,” COMMON GROUND at 16 (July-Aug. 2004, CAI pub.).

After filing suit, the Radcliffs reportedly settled to buy back their house for $82,000., last

visited 1/25/06.

  • In a Nevada case involving disputed fines of $700, late fees of $35, and assessments of $375, Judi Burns challenged the basis to foreclose and sell her house for $10,100, less than one-tenth of its value. She appealed, but had to move out with her family in 2004 rather than buy a $45,000 bond that would be forfeited if she lost. [20]

  • Near Houston, widow Wenonah Blevins owed $814.50 in back dues, and said she never knew she faced foreclosure until after the association had sold her $150,000 home for $5,000. CAI’s former treasurer said the association “did everything right in the foreclosure, other than realize the lady is [82] years old.” [21]

  • In Florida, 74-year-old Anne Grove suffered foreclosure, then eviction, handcuffing, jailing for five days, and apparent theft of her belongings because of a $1,200 debt to the association. Apparently she had not understood what was happening, and a law firm paid $2,400 to buy her home appraised at more than $150,000. [22]

Unfortunately, there also have been cases in which associations pursue foreclosure even after homeowners acknowledge they owe money and are in the process of trying to make catch-up payments on debts--sending checks that the associations cash.

  • In Arizona, an association sought foreclosure in 2003 while cashing checks paid by Evelyn Lyles on an initial debt of $393. While declining to comment on her particular case, the association’s lawyer stated about some homeowners who fall behind: “While they think they’re catching up on their dues, in fact they are getting further behind as the legal fees accrue.” An anonymous donor saved Ms. Lyles and her children--after news reports of her ongoing battle with breast cancer. [23]

  • In Florida, Theresa and Robert Denson’s home had about $100,000 in equity. They signed an offer to repay $200 per month on their $1,200 back dues, and submitted some checks that the association cashed. Still, the association completed foreclosure that forced the family of six from their home. [24]

[20] J. Wasserman, “California on verge of critical change in homeowner association laws,” supra n.20; D. Kulin, “Circumstances Force Woman from Her Home,” Las Vegas Sun (2/9/04).

[21]  C. Durso, “The War on Foreclosure,” COMMON GROUND, supra n.20, at 21. Mrs. Blevins also sued to recover her

house. Id.

[22]  A. Miller, “Widow, back home, takes stock of her possessions”, Oscala Star-Banner (5/6/00) & Editorial, “A sad lesson in compassion”, Oscala Star-Banner (5/7/00), reprinted in, last visited 2/16/06. She got back her house after publicity of her plight. Id.

[23]  C. Durso, “The War on Foreclosure,” COMMON GROUND, supra n.20, at 16 & 19; M. Reinhardt, “HOA Battles Dying Woman Over Fees,” Arizona East Valley Tribune (10/10/03); J. Wasserman, “California on verge of critical change in homeowner association laws,” supra n.20.

[24] S. Boyd, Report Summary,, last visited 2/17/06.

Older persons face particular risks because often they have substantial home equity, having paid off their mortgage and often having a home whose value has appreciated substantially over a lifetime. [25]


Excessive Litigation

Current laws permit some associations to use foreclosure litigation as a routine tactic, overwhelming homeowners even in cases of minor disputes. Court records from Harris County, Texas (surrounding Houston) illustrate both the extent of such litigation in one local area and the variation among associations. Focusing on communities of single-family detached homes, and counting only lawsuits seeking foreclosure, associations filed more than fifteen thousand cases from 1985 to 2001, about one thousand cases per year. [26]


The Harris County study may understate the problem, because the frequency of such lawsuits increased dramatically after 1988 and continued to increase after 1995. [27] Further, associations also often sue without expressly seeking foreclosure. Notably, this study did not count nonjudicial foreclosures that many associations obtain. [28]


In addition, a recent study of five Northern California counties (Alameda, Contra Costa, San Mateo, Santa Clara, and Sacramento) found that associations filed about one of every eight foreclosures. [29]  The California study noted that in “the lending industry foreclosure is generally the least preferred method of collections by most lenders who are not ‘predatory”; thus, for foreclosures not filed by associations, the “median amount owed is $190,000.” [30]  In sharp contrast, “the median amount owed in homeowner association foreclosures was $2,557,”

including costs of collection such as attorney fees, so the underlying debts were “relatively

infinitesimal.” [31]  As that study’s authors noted, “[i]t is difficult to understand what ‘sound

business practice’ would require such a high cost to collect such small amounts.” [32]

[25]  Many state laws currently may permit foreclosures for small sums, even when homeowners commit in writing to pay back dues accumulated during illness or family crisis.

[26] See, last visited 9/9/05.

[27] Id. “In 1988, there were fewer than 390 actions for foreclosure filed in the entire state” of Texas. M. Morones & W. Gammon, Community Owners Associations, Their Dubious Power to Foreclose, and the Recent Legislation Curtailing That Power, TEX. B. J. 218, 221 (March 2003).

[28]  Non-judicial foreclosures take place without advance review by any judge, and thus pose special problems. When CAI asked which type is used more often--judicial or non-judicial--a leading Harris County lawyer for associations stated, "I'd say it's a pretty good toss-up." C. Durso, “The War on Foreclosure,” COMMON GROUND, supra n.20, at 21.

[29]  Testimony by Stephen Cogswell, of Sentinel Fair Housing, to the California State Senate, Housing and Community Development Committee Hearing (2/17/04), at 3–4, also cited in Background Paper, Homeowner Association Foreclosure: Does the Punishment Fit the Offense?, prepared for the California State Senate, Housing & Community Development Committee Hearing (2/17/04) at 1–2.

[30] Id. at 3 (“least” is the study’s emphasis).

[31] Id. at 3–4.

[32]  Id. at 4. The California report also found foreclosure by associations against Latino homeowners occurs at a rate three times their percentage in the population, even though “Latinos are not foreclosed against at this rate by lenders, other debtors, etc.” Id. The authors expressed concern about this “evidence supporting possible Fair Housing violations in the industry’s collection and foreclosure practices,” that is, discrimination. Id.

Expensive Litigation


Many associations employ lawyers and staff, have repeated experience with the system, and face little risk if they lose. By contrast, homeowners typically cannot afford counsel; have little time, experience, or skills to understand court proceedings; and have everything at stake-- sometimes they must literally “bet the house.” Further, when associations sue homeowners and win, they are generally able to force homeowners to pay for the associations’ attorneys-- and fees increase rapidly.

  • A Florida association sued George and Anna Andres for putting an American flag pole at their home, prevailed, and obtained an order to foreclose to collect attorney fees that reportedly exceeded $20,000. The couple prevailed on appeal that vacated the foreclosure, but that appeal itself risked increasing the attorney fees due to the association. [33]

  • In Arizona, Barbara (a retired paralegal) and Dan Stroia (a disabled construction worker) paid nearly $8,000 to attorneys collecting what began as a $66 debt. The Stroias had not known of a $6 increase in quarterly charges, or a $30 one-time assessment. A lawsuit first sought $565. A month later, the Stroias tried to pay $850, and ultimately had to pay more than $7,000 more for disputing the fees. The association attorney blamed the family: “People just get emotional about things because it's their home.… The Stroias, unfortunately, reacted very emotionally.” [34]

Having such powerful tools as foreclosure, unfortunately, provides adverse incentives for associations to sue homeowners regarding even minor matters easily addressed out of court. Excessive, expensive litigation poses special danger to homeowners who are facing other serious economic loss, such as during grave illness or after job loss. Families must divert money otherwise needed for health care or sustenance to pay demands for association attorney fees.


Additional Issues Addressed Faced by Some Homeowners 


Homeowners suffer when an association increases charges or changes rules without clear notification and process.

Homeowner rights to self-expression, privacy, and equality merit specific protection. Some associations have sought to ban flags, political placards during election season, and “for sale”

signs. Others have excessively regulated peaceful gatherings. For example, in Florida, one

[33] Andres v. Indian Creek Phase III-B Homeowner’s Ass’n, 901 So.2d 182 (4th DCA 2005); P.Franceschina, “Flagflying ex-Marine saved from foreclosure,” Sun Sentinel (5/24/03) at 1B & J. Barton (Associated Press), “Flag-flying ex-Marine has a chance to keep his home,” Orlando Sentinel (5/24/03) at B5; Jerome et al., “Loathe Thy Neighbor,” supra n.12, at 126.

[34] L. Roberts, “HOA gets $8,000 from homeowner over a bill of $66,” The Arizona Republic (5/1/04), at B10.

association banned front-yard “social gatherings,” applied to as few as three people. [35] Others

have imposed unequal charges for use of common areas depending on the decisions of directors about the group that wants to use the common area.

Directors are sometimes able to deny critics the ability to review basic association records--even minutes and accounts--and sometimes entirely bar homeowners from speaking at--even attending-- monthly meetings. Homeowners attempting to make changes have been denied the right to call special meetings to recall directors, denied access to association newsletters and other communications channels (e.g., closed-circuit TV), and barred from common areas for meetings. States commonly provide some rights for homeowners to monitor association operations, but too often such statutes lack teeth.

Associations may also assert the power to deny homeowners the right to vote, based on small

debts or claims of debts.


Recent Scholarship and Legislation to Protect Homeowners


Recognizing the need for reform more than a decade ago, Professor Susan French encouraged

each association to adopt their own homeowner bill of rights. [36]  The leading trade group, the

Community Associations Institute (including associations and the managers and lawyers who

represent them), more recently urged its members to adopt a one-page statement of aspirations,

“Rights and Responsibilities for Better Communities.” [37]  Both these approaches depend on

voluntary action.


Recently, after more than ten years of study by leading lawyers from private practice and

government agencies, professors, and judges, Professor French led the American Law Institute to consensus on important legal principles for homeowner rights. These principles are articulated in the Restatement (3rd) of Property, Chapter 6 on Common-Interest Communities (2000)

(“Restatement”). [38] In addition to judicial decisions from across the country, the Restatement

considered existing legislation, including state statutes based on the older Uniform Common

Interest Ownership Act (UCIOA), first approved in 1982. Professor French has concluded that

UCIOA-based laws “can and should be improved upon,” taking into account the Restatement’s

[35]  See B.Grumet, “Three a crowd, condo group rules,” St. Petersburg Times (11/18/03) at 1; R. Raeke, “Condo doubles fine for front-yard socializing”, St. Petersburg Times (12/27/03) at 1.

[36] The Constitution of a Private Residential Government Should Include a Bill of Rights, 27 Wake Forest L. Rev. 345, 350-52 (1992).

[37] See, adopted 5/1/03, last accessed 11/6/04.

[38]  The American Law Institute publishes the widely respected Restatements of the Law in many areas. Preparation of this Restatement began in 1987 and, as discussed in the foreword to the Restatement, at IX–X, prior law required significant reconsideration. The Restatement worked from the premise that, as homeowners, “many of us … will give up some of our discretion” to obtain benefits of associations. Id. at IX. The Restatement also recognized “[t]he law of residential common-interest communities reflects [certain] tensions between protecting freedom of contract, protecting private and public interests in security of the home, both as a personal base and as a financial asset, and protecting the public interest in the ongoing financial stability of common interest communities. It also reflects the tensions between protecting the democratic process at work in common interest communities and protecting the interest of individual community members from imposition by those who control the association.” Id., Chapter 6, at 68–69.

distillation of “a comprehensive statement of the general principles that should govern” associations. [39]


In response to controversies such as those just described, legislators in fast-growing states with

many associations have held hearings, issued reports, and proposed and passed reforms to clarify homeowner rights and improve oversight and enforcement. This legislation provides additional pillars on which to build the proposals that appear in the bill of rights and sample model statute in this report. For example:

  • Arizona in 2004: Banned foreclosure without judicial determination of unpaid assessments (HB 2402), secured homeowner rights to sue associations (SB 1137), and confirmed rights to post political signs in an election year (HB 2478).

  • California in 2005: After enacting many bills in 2003 and 2004, added significant restrictions on the right to foreclose, including requirements to allow payment plans, to have a right of redemption, and to forestall foreclosure for one year unless unpaid assessments exceed $1,800 (SB 137). [40]

  • Florida in 2004: Created the Office of Condominium Ombudsman, extended important protection governing condominiums also to single-family homes, improved alternative dispute resolution, clarified rules for election and recall of directors, and limited the power of associations to fine and retaliate by suing homeowners (SB 1184 and 2984).

  • Nevada in 2001, 2003 and 2005: Comprehensively updated older statutes based on UCIOA, including an ombudsperson to help homeowners (Nev. Rev. Stat. Titles 38 and 116).

  • Texas in 2001: Gave homeowners rights to notice and a hearing before costly enforcement action, barred foreclosure for fines, and added a detailed right of redemption after foreclosure sale (Tex. Prop. Code Chapter 209).

However, problems continue despite new statutes and, while this publication is being finalized, legislators across the country continue to introduce additional bills to protect homeowners. Every state starts with different legislation. Rather than assert a one-size-fits-all uniform act, the model statute applies the principles of its bill of rights to highlight important aspects of legal protection that homeowners need. The model statute aims to illustrate the range of issues that merit legislative attention. Even without new statutes, associations can implement many of these proposals and develop additional ways to secure fairness for homeowners.

[39]  Scope of Study of Laws Affecting Common Interest Developments, at 6–7 (Calif. L. Rev. Comm’n, Nov. 2000). The California Law Revision Commission commissioned this study, and prepared many reports (some of which are cited below), as part of a multiyear, ongoing process to update statutes governing homeowner associations.

[40] Discussed infra n. 52.

Legal Framework for the Homeowner Bill of Rights and Model Statutes

The need to protect rights of homeowners as individuals, and the governmental aspects of associations, suggest consideration of a bill of rights. Indeed, constitutional principles inform some of the following proposals. In addition, the proposed bill of rights takes into account principles of property and contract law, as well as equity, because all of these influence the doctrines of servitudes, [41] a complex body of law that sets the legal framework governing associations in common-interest communities. Land use law and the decision to structure most associations as nonprofit corporations add additional complexity to the legal protections needed by homeowners.


Associations differ significantly from other nonprofit corporations. Homeowners cannot quit the

association without moving, a choice often precluded by practicalities. Moreover, members typically make small economic commitments to nonprofits, whereas the commitment to an association can be substantial, even without considering home equity.


Ultimately, homeowners expect their association to maintain the common areas and preserve property values without infringing on their basic rights. The goal of this proposal is to ensure such protection for the rights of homeowners.

[41]  “A servitude is a legal device that creates a right or an obligation that runs with the land or an interest in land.”

Restatement § 1.1(1). “Running with land means that the right or obligation passes automatically to successive owners or occupiers of the land or the interest in land with which the right or obligation runs.” Id. § 1.1(a).



The following “bill of rights” summarizes basic principles for legislation regarding consumer protection in common-interest communities. Where appropriate (for instance, encouraging alternative dispute resolution), associations can consider these principles for their governing documents.




To ensure amicable and equitable relations between homeowners and their associations, this bill of rights seeks fair resolution of disputes, specifies rights regarding rules and charges, ensures individual autonomy, and promotes oversight and voting. The bill of rights uses reasonability as the touchstone for all actions, and includes a state Office of Ombudsperson for Homeowners to facilitate resolution of disputes in a manner that strengthens communities.


I: The Right to Security against Foreclosure

An association shall not foreclose against a homeowner except for significant unpaid assessments, and any such foreclosure shall require judicial review to ensure fairness.


II: The Right to Resolve Disputes without Litigation

Homeowners and associations will have available alternative dispute resolution (ADR), although both parties preserve the right to litigate.


III: The Right to Fairness in Litigation

Where there is litigation between an association and a homeowner, and the homeowner prevails, the association shall pay attorney fees to a reasonable level.


IV: The Right to Be Told of All Rules and Charges

Homeowners shall be told--before buying--of the association’s broad powers, and the association may not exercise any power not clearly disclosed to the homeowner if the power unreasonably interferes with homeownership.


V: The Right to Stability in Rules and Charges

Homeowners shall have rights to vote to create, amend, or terminate deed restrictions and other

important documents. Where an association’s directors have power to change operating rules, the homeowners shall have notice and an opportunity, by majority vote, to override new rules and



VI: The Right to Individual Autonomy

Homeowners shall not surrender any essential rights of individual autonomy because they live in

a common-interest community. Homeowners shall have the right to peaceful advocacy during

elections and other votes as well as use of common areas.


VII: The Right to Oversight of Associations and Directors

Homeowners shall have reasonable access to records and meetings, as well as specified abilities to call special meetings, to obtain oversight of elections and other votes, and to recall directors.


VIII: The Right to Vote and Run for Office

Homeowners shall have well-defined voting rights, including secret ballots, and no director shall have a conflict of interest.


IX: The Right to Reasonable Associations and Directors

Associations, their directors and other agents, shall act reasonably in exercising their power over



X: The Right to an Ombudsperson for Homeowners

Homeowners shall have fair interpretation of their rights through the state Office of Ombudsperson for Homeowners. The ombudsperson will enable state oversight where needed,

and increases available information for all concerned.



The following model statute illustrates how legislation can implement the principles discussed earlier. Other statutory forms also may fulfill those principles, and AARP encourages consideration of various proposals that meet those goals.



Section 100: Application and Definition

Section 101: The Right to Security against Foreclosure

Section 102: The Right to Resolve Disputes without Litigation

Section 103: The Right to Fairness in Litigation

Section 104: The Right to Be Told of All Rules and Charges

Section 105: The Right to Stability in Rules and Charges

Section 106: The Right to Individual Autonomy

Section 107: The Right to Oversight of Associations and Directors

Section 108: The Right to Vote and Run for Office

Section 109: The Right to Reasonable Associations and Directors

Section 110: The Right to an Ombudsperson for Homeowners

The AARP Public Policy Institute, formed in 1985, is part of the Policy and Strategy Group at AARP. One of the missions of the Institute is to foster research and analysis on public policy issues of importance to mid-life and older Americans. This publication represents part of that effort.

The views expressed herein are for information, debate, and discussion, and do not necessarily

represent official policies of AARP.

© 2006, AARP.

Reprinting with permission only.

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