While rare, an HOA coup is a real possibility that board members should be aware of. Homeowners can come together and work against the association, resulting in irreversible repercussions for the entire community. Understanding why coups happen in the first place is the best way to prevent them.
What is an HOA Coup?
Short for coup d’état, a coup refers to the sudden and unconstitutional overthrow of leaders (and the government) by a group of people. In an HOA setting, a coup can occur when homeowners rise up and forcibly remove board members. Some even go so far as to compel the dissolution of the association.
It is important to note that an HOA coup is not the same as a board recall. The former is informal and often without notice, while the latter is formal and follows a legal process.
Coups are typically carried out in secret and by force, with homeowners seizing power. On the other hand, a recall comes with notice, structure, and a vote. It is also generally transparent and involves all the members of the association.
Why Homeowners Revolt Against the Board
At its core, an HOA coup stems from unsatisfied homeowners. This dissatisfaction is typically the result of board inadequacies — from a lack of transparency and financial mismanagement to selective enforcement and outright neglect.
1. Lack of Transparency
Board members are responsible for managing the community, but that doesn’t mean they should operate in the dark. Homeowners have a right to know what’s going on in their neighborhood and where their dues are going. When boards make hushed decisions, communicate poorly, or withhold records, they might soon face an uprising.
2. Financial Mismanagement
Homeowners associations deal with money all the time. They collect dues, disburse payments, and plan for reserves. These circumstances allow room for poor financial decisions or blatant fraud.
Everything from budget issues and unexplained spending to rising dues without justification can make homeowners distrustful of their board. And if a board recall isn’t possible, homeowners might resort to drastic measures.
3. Selective Enforcement or Abuse of Power
Board members are responsible for enforcing the association’s rules. When they fail to do so fairly or consistently, homeowners can claim selective enforcement.
Additionally, the board is also responsible for setting the rules. It should do this with care and transparency, never with a personal agenda. Otherwise, it can lead to accusations of abuse of power.
4. Neglect of Maintenance and Services
The objective of an HOA is clear: maintain common areas to preserve property values. When the board ignores maintenance issues or delays necessary repairs, it is putting the association at risk.
5. Conflict of Interest or Ethical Concerns
The board holds the authority to set policies and choose vendors. It must do these in a transparent manner and in accordance with due process. When board members don’t recuse themselves from conflicts of interest or intentionally steer decisions to benefit themselves, homeowners are likely to revolt.
6. Culture Clashes and Personal Drama
Sometimes, an HOA coup can arise from personal fighting. Due to differences in beliefs or personalities, disagreements can quickly go from a small spat to an all-out faction war. Before long, people will start taking sides and pushing for radical reform.
What a Lawful Removal or Recall Process Looks Like
Just because coups aren’t lawful or constitutional doesn’t mean homeowners are left without a voice. It is possible to effect meaningful change through legal processes, often through a board recall.
Requirements for a board recall or removal can vary depending on state laws and the governing documents. Both the Washington Uniform Common Interest Ownership Act and the Washington Homeowners’ Association Act allow for the removal of board directors.
Under RCW 64.90.520, owners can vote in person or by proxy to remove any board member or officer, with or without cause. That said, the vote must take place at a properly noticed meeting. The board member being considered for removal must also have an opportunity to speak before the vote.
The same statute dictates that the board may remove an elected director or officer, even without a vote, if:
- The director or officer is delinquent for more than 60 days, and
- The director or officer has not remedied the delinquency within 30 days after receiving a notice of removal.
Per RCW 64.38.025, homeowners may remove a board member by majority vote. They may do so with or without cause and in person or by proxy. The vote must take place at a properly noticed meeting.
How to Respond to Homeowners Mutiny
When the board has a coup on its hands, it is important to practice the following:
- Stay Calm. Don’t react with violence or offensive language. Board members should remain calm and professional, even amid a mutiny.
- Follow the Governing Documents. The board must adhere to the requirements and procedures found in the CC&Rs and bylaws.
- Document Everything. To maintain a paper trail, the board should document all actions and communications. This will come in handy if the situation escalates.
- Consult Legal Counsel. A lawyer can provide legal advice to help the board with the next steps.
- Be Transparent. The board should keep the community in the loop and offer updates to residents whenever possible.
- Don’t Engage in Personal Issues. Board members shouldn’t participate in personal battles. This is a professional matter, and personal fights are unproductive.
- Call a Meeting. To get the situation under control, the board should consider scheduling a special meeting of the membership. This will give board members an opportunity to clarify matters and reaffirm their leadership.
How to Prevent a Homeowners Coup
Prevention is always better than cure. To avoid a coup in the first place, it is imperative to adopt the following strategies:
- Communicate Openly and Frequently. Boards should keep homeowners informed of all association matters. Keeping them in the dark will only breed distrust.
- Enforce Rules Consistently. Fair enforcement is key to maintaining peace and order. Never enforce the rules selectively.
- Maintain Financial Transparency. Homeowners have a right to know how their dues are being used. Boards should regularly prepare and present financial reports.
- Engage With Homeowners. Boards should always welcome community feedback. Social gatherings can also reduce tension.
- Undergo Regular Training. Mismanagement can result from a lack of expertise. Attending training sessions and seminars can help board members stay up to date.
- Adopt a Code of Conduct. Associations should create and agree to abide by a code of conduct.
The Right Way to Push for Change
When homeowners feel dissatisfied with their board, their first response shouldn’t be to stage a coup. There are plenty of ways to incite change without resorting to force.
Attending board meetings is a good place to start. These meetings typically allot a time for open comments, where homeowners can voice their concerns. If meetings are few and far between, they can request or petition to hold one.
It is also important not to let rumors override judgment. Focus on factual information and investigate wherever possible. Don’t make assumptions or jump to conclusions.
If board removal is warranted, homeowners should use legal means. Follow the recall process as per state laws and the governing documents. Finally, to truly make a difference, homeowners should consider running for positions on the board themselves.
Go for the Alternative
Homeowners use an HOA coup as a severe response to dissatisfaction. It is unproductive, unconstitutional, and often unwarranted. The better option is to use the election or removal process and go through legal channels to replace board members.
CWD Group helps community associations navigate the intricacies of HOA coups. Call us today at 503-488-2008 or contact us online to learn more!
