The structuring of Property Owners’ Associations (POAs) as non-profit corporations provides them with some legal protections. However, they are not entirely safe from legal threats. POAs must manage business affairs while balancing the wants and needs of their community.
With a broad scope of operations and several stakeholders involved, the legal issues a POA may face can become very complex. Therefore, a POA can significantly benefit from the support and guidance of knowledgeable POA attorneys. They can assist with the matters below.
Ensure legal compliance
The first and perhaps most crucial role of legal counsel is ensuring that the POA operates within the law. Texas has specific statutes that govern POAs, and it is vital to comply with these regulations to avoid potential legal disputes.
Interpret and establish governing documents
A POA structured as a corporation will have similar governing documents. The governing documents of a POA, including the bylaws, covenants, and conditions and restrictions (CC&Rs), are the foundation of its operations. These documents can be complex, and their interpretation may not always be straightforward. An experienced attorney can explain and help draft these documents to prevent misunderstandings and conflicts within the community.
Represent the association when disputes arise
Disputes are an inevitable part of managing a community of property owners. Whether it is a disagreement with a member, a contractor or an external entity, legal counsel can effectively represent the POA. From negotiation to arbitration or litigation, having a lawyer with expertise in real estate law can be invaluable in resolving conflicts while protecting the POA’s interests.
Assist with enforcement actions
POAs have the authority to enforce the rules and regulations outlined in their governing documents. However, they must enforce them legally and fairly. Homeowners can sue for things like selective enforcement of rules. Legal counsel can assist in drafting enforcement policies and guiding the board on proper procedures. They can also represent the POA in any enforcement actions that may lead to legal proceedings.
An attorney’s role is to protect the POA’s legal interests continuously and proactively and to advocate for the association when disputes arise.