By Jack Donaldson, Westport Homes
Among many new laws set to take effect in the State of Indiana on July 1, 2016, Indiana House Bill 1222 makes changes to the statutes applicable to condominium and homeowners associations. Along with other changes, the new changes will ensure more transparency between the Board of Directors of the association and the members. Specifically, the statute will now mandate that “each member of the homeowners association has the right to attend any meeting of the homeowners association board, including an annual meeting of the board.” The “members” are commonly each lot owner, which usually consists of the homeowners, the builder, and the developer.
A common concern of new homeowners that live in neighborhoods with a homeowners association is that they don’t always feel that they are kept informed of when and why certain decisions are made. The statute already requires this information to be available to each homeowner, but with the excitement of closing, the HOA covenants are often put aside and forgotten along with the other closing documents.
Homeowners don’t necessarily disagree with every decision made by the association, but commonly want to ensure that their concerns are heard before such decisions are made. While many associations have always made their meetings open to all members, some have limited the meetings to the Board of Directors, which would meet and make decisions on behalf of the entire association. The new requirements of the statute will give each homeowner a voice at HOA meetings if he or she so chooses to attend and participate.
As the local market for new homes continues to gain strength since the downturn, there is more residential development activity in Marion County and its surrounding counties. Typically, when a development is under way, the developer or builder will be the declarant of the association and will have a substantial voice in the way the association is operated. The developer or builder will often maintain its involvement with the homeowners association throughout the time it is developing the neighborhood. Once the development nears completion, the association is then turned over to the homeowners to operate without the involvement of the developer.
Some associations made their meetings available to all members of the association prior to the July 1st change, but the only requirement placed on associations prior to that change was that the members were to be allowed access to meeting minutes and other financial documents upon request. This only allowed homeowners access to certain knowledge after the decision had been made. Moving forward, homeowners will be allowed to attend HOA meetings as a matter of right.
This change should open the lines of communication between the board of directors and all of the members that might have input on future decisions. Anyone who has ever attended an HOA meeting knows that it will most likely lead to longer, more contentious meetings, but it should ultimately allow for homeowners to be more informed and create more effective operation of homeowners associations.
In addition to opening up all association meetings to the homeowners, HB 1222 also makes additional changes to the statutes affecting condominium and homeowners associations. Those changes include limitations on the board of directors open communication requirements, notice requirements to mortgage holders, and additional technical requirements.