Federal and state laws, as well as association governing documents, define the limits of an HOA/COA. While amendments to the governing documents are normally within the HOA's control, changes in federal or state laws are normally not, so HOA boards strive to keep up with legislative changes. Here, we address some new HOA laws in 2024.
WHY YOU NEED TO UNDERSTAND HOA LAW CHANGES FOR 2024
The laws of the land govern all homeowners associations. Although not all states have statutes that specifically address these communities, most do. Board members must try to stay informed of new laws affecting their association, mainly to stay away from potential legal trouble.
When an HOA violates a law, it is exposed to legal liability. Homeowners can sue the association, and a court may order an HOA to pay hefty damages or penalties. Similarly, an HOA board may be in trouble for failing to follow the law. It is almost impossible to comply with the law, though, if board members aren’t aware of it in the first place.
Laws are ever-changing, so it is crucial to conduct a review regularly. However, board members may not have the legal know-how to keep up with these changes. It is a good idea to consult a legal professional when in doubt.
DO HOA LAWS CHANGE EVERY YEAR?
HOA laws change annually at the state level. The only state that makes changes every other year is Texas. For the most part, lawmakers pass one to two bills a year to combine pieces of other HOA bills. Many of the laws seem minor, but they can significantly impact homeowners associations. Everything from notification and insurance requirements to zoning and short-term rental laws can fundamentally change an HOA’s rules and operations. Over the past year, states with the highest rates of homeowners association ownership made the biggest changes.
FEDERAL CORPORATE TRANSPARENCY ACT
Several new 2024 HOA laws exist, including the federal Corporate Transparency Act (CTA). Originally enacted under the 2021 National Defense Authorization Act, the Financial Crimes Enforcement Network of the Department of the Treasury (FinCEN) finalized its provisions last year.
Starting January 1, 2024, the CTA requires reporting companies to report information about their organizations. This includes information on its beneficial owners. If a company was formed after January 1, 2024, the report must also include its company applicants.
How does the Corporate Transparency Act apply to HOAs? The Act applies to corporations, which most HOAs are filed as under their secretary of state. As such, HOAs are considered reporting companies.
Complying with the CTA can cause associations to incur additional administrative costs. Associations must ensure that they file their reports properly and punctually. It is also imperative to use secure tools when collecting and keeping the personal information of its beneficial owners and applicants, which the report requires. Associations should use third-party software with strict security protocols and firewalls.
Existing HOAs can file their reports until January 1, 2025. However, HOAs established in 2024 must file their first report within a number of days of their creation. HOAs established in 2025 must file their first report within 30 days of their creation.
Law changes by State:
CALIFORNIA
The state of California has some of the most robust HOA laws in the nation. As one of the states with the most homeowners associations, there have been some notable changes in its HOA legislation. Here are the California HOA laws updates in 2024.
MEETINGS BY TELECONFERENCE
AB 648 allows board meetings to occur via teleconference with certain conditions that ensure equal participation for board members and homeowners akin to in-person meetings. Notices for board meetings via teleconference must include clear and complete instructions on how members may join in.
MEETING ADJOURNMENT
AB 1458 permits associations to adjourn meetings to a date within 5 to 30 days if they fail to meet a quorum. During the adjourned meeting, the quorum requirement is the number of individuals in attendance physically, by proxy, or via secret ballots.
ELECTRONIC BALLOTS, BOARD MEMBER REMOVAL, AND OPERATING ACCOUNTS
AB 309 allows the use of electronic ballots for certain activities, such as electing or removing board members and voting for delegates representing an HOA. Board members up for removal may request a meeting for discussion. Additionally, the bill changes notice requirements, permitting votes without a meeting and using voting machines. The same bill also permits withdrawal from an HOA’s operating account for certain payments.
BOARD MEMBER QUALIFICATIONS
Effective January 1, 2024, AB 1764 allows the association to set term limits for board members. It also states that associations must disqualify those who exceed the number of terms allowable and that these disqualifications apply to both existing board members and candidates. Moreover, it disqualifies directors from continuing to serve if they cease to be HOA members.
USE OF DRINKING WATER
AB 1572 extends an emergency regulation prohibiting drinking or potable water to maintain non-functional turf in industrial, commercial, and institutional areas. There are exceptions, such as grass, that an HOA uses for community activities, trees, and residential lawns. It is permitted to use recycled water on non-functional turf, though.
The regulation was set to expire in June 2023. However, the State Water Resource Control Board decided to extend the regulation.
LIMITATIONS ON DUES INCREASES FOR AFFORDABLE HOUSING
AB 572 limits regular assessment increases on deed-restricted affordable housing units in homeowners associations. No increase shall exceed 5% greater than the previous assessment or the percentage change in the cost of living, with a ceiling of 10%. This applies to deed-restricted affordable housing units with associations that record their original declaration on or after January 1, 2025.
BALCONY INSPECTIONS
SB 721 requires inspections for exterior elevated elements in multifamily residential buildings consisting of three or more dwelling units. The bill aims to promote safety after a tragic incident in Berkeley 2015.
ACCESSORY DWELLING UNITS (ADUS)
On January 1, 2024, AB 1033 became effective. It states that homeowners who have constructed an ADU may split the lot and sell the property separately from their primary residence. The member can convert the ADU into a condominium unit if the association and all lenders who have mortgages on the property approve it. Moreover, the local municipality must pass an ordinance allowing ADUs to be sold separately.
SMALL CLAIMS COURT
Senate Bill 71 increases the limit on small claims for entities like associations to $6,250.
WORKPLACE RESTRAINING ORDERS
Senate Bill 428 extends the grounds for workplace restraining orders. It now applies to employees who have suffered unlawful violence, a credible threat of violence, and harassment. The law will become effective on January 1, 2025.
FLORIDA
The state of Florida has more community associations, mobile home parks, co-ops, timeshares, and condominiums than other states. Its laws have been around for a while, making it a great standard for other states when it comes to implementing HOA laws. Here are the new Florida HOA laws changes in 2024.
FINES AND SUSPENSIONS
House Bill 919, also known as the Homeowners’ Association Bill of Rights, became effective in October 2023. In the past, HOA boards could fine homeowners who do not comply with the community rules and regulations. However, HOA boards can no longer levy fines or suspend homeowners’ rights and privileges for rule violations unless they deliver a two-week notice to the resident’s mailing address or email.
DISCLOSURES AND NOTICES
The Florida Homeowners’ Association Bill of Rights also requires agendas and notices for each upcoming meeting. HOAs must provide notice to members so they can assess whether or not they want to vote or discuss the issue at hand.
BOARD MEMBER REQUIREMENTS
An HOA board member’s financial interest in any contracted third party must be disclosed to the board. The new rule allows board members to decide whether or not to continue the agreement.
FRAUDULENT VOTING
The new bill includes provisions outlining actions considered fraudulent voting. It also delineates the subsequent punishment for such acts.
GOLF CART TRAFFIC
House Bill 949, effective October 2023, applies to homeowners associations with heavy traffic due to golf carts. It sets age restrictions for drivers and enacts safety regulations for communities where many residents drive golf carts.
ILLINOIS
In Illinois, here are the new HOA laws changes in 2024.
ELECTRIC VEHICLE CHARGING
Senate Bill 40, titled the “Electric Vehicle Charging Act,” mandates that newly built single-family or small multifamily residences with designated parking spaces must have the necessary infrastructure to accommodate at least one parking space per unit supporting electric vehicle charging. Large multifamily residential buildings must have 100% of their total parking spaces ready for EV charging.
Residents of existing homes or buildings may request the installation of the EV charging infrastructure, but they must cover the construction cost. Associations must comply with this or face a potential fine of up to $1,000.
ROAD MAINTENANCE
Effective January 1, 2024, Public Act 103-0486 permits HOA boards to contract highway commissioners for road maintenance and repairs. Specifically, this applies to HOAs that constitute more than 50% of their road district or township population.
TEMPERATURE REQUIREMENTS
Effective January 1, 2024, Public Act 103-0161 presents specific requirements for heating and cooling temperatures for HOAs with age restrictions (55 and older).
NORTH CAROLINA
Here are the HOA laws updates in 2024 that North Carolina has to offer.
COMMITTEE ON HOAS
House Bill 311 forms a House Select Committee on homeowners associations. This committee consists of nine (9) members who will review planned communities and condo associations and the laws that govern them. The committee has about a year to complete its tasks, with a final report due on or before March 1, 2024.
TEXAS
In Texas, here are the new HOA changes in 2024.
FINES AND ENFORCEMENT
House Bill 614 requires associations to detail the types of rules they have and the schedule of fines for violations. Additionally, HOAs must include information concerning hearings. Details must follow the categories below:
Property maintenance and repair
Individual misconduct
Matters affecting health and safety
Apart from this, the bill follows Florida’s lead regarding clear meeting notices and meeting agendas. The bill took effect on January 1, 2024.
WASHINGTON
Here are the new laws changes in 2024 in the state of Washington.
SENATE BILL 5796
The Washington Uniform Common Interest Ownership Act (WUCIOA) is a statute that regulates common interest communities and plat communities. Senate Bill 5796, which is set to take effect on June 6, 2024, extends the WUCIOA’s application to all cooperatives, HOA communities, and condominiums, except for neighborhoods that were previously exempt.
The bill also mandates several things including a procedure to remove illegal restrictions, provisions for electronic meeting attendance subject to several requirements, and Public Offering Statements and Resale Certificates. Moreover, it prohibits adverse possession claims for HOA common elements and forbids restrictions on storing recycling, garbage, and compost receptacles other than behind screening.
STAYING UPDATED ON LEGAL CHANGES
Homeowners associations must stay up-to-date on all the changes in law within their state. Board members can run a quick Google search of new HOA laws in the area. In most cases, specialized HOA attorneys publish articles on the new changes.
In addition, community members and directors may turn to helpful HOA websites such as the Community Association Institute (CAI) to stay informed of proposed bills and passed laws.
Finally, it’s important to note that HOA board members should tell the residents of the enacted changes. This ensures all members abide by new legislation.
NEW YEAR, NEW LAWS
There are several HOA laws changes in 2024. This should be no surprise, as every year introduces new legislation and changes to existing ones. A competent HOA board understands the importance of staying in the loop. Furthermore, a good HOA board should not hesitate to seek legal counsel from a lawyer, especially when interpreting laws and ensuring compliance.
