Recent changes in HOA law

Several years ago, the Idaho legislature set its sights on the laws regarding homeowners associations. One of the significant catalysts that led to the legislature’s scrutiny of HOA’s was the increasing popularity of short-term rentals through services such as AirBnB and VRBO.

Following an Idaho Supreme Court decision in 2022, the Idaho legislature collected the various statutes regarding HOA’s and recodified them into a single body – the Homeowners Association Act, Idaho Code Title 55 Chapter 32.

Since the passage of the Act, I have experienced an influx of clients requesting help and legal representation regarding their HOAs. As Idaho continues to grow and attract residents from other states, issues regarding HOAs will continue to increase. This is because many transplants come from states with robust and detailed laws regarding HOAs.

As a result, these new residents are used to more involvement of an HOA when it comes to their property. Conversely, Idaho’s HOAs laws were sparse until very recently. But that is now changing.

These recent changes, coupled with an influx of transplants who tend to rely heavily upon HOAs for “administering the rules,” make it essential for you to be aware of your rights as a homeowner within a subdivision governed by CCRs.

This article will highlight two of the most major issues I run across when dealing with HOA’s.

Short Term Rentals

The most common question I receive from HOA’s is whether they can amend their CCRs to limit or prohibit short-term rentals (STRs). While there are ways to prohibit STRs through an amendment, current Idaho law renders such an attempt as a fool’s errand. This is because Idaho Code 55-3211 prohibits HOA’s from amending, adding, or enforcing any covenant that limits or precludes short-term rentals “unless expressly agreed to in writing” by the owner of the affected property. In other words, HOA’s now effectively need 100% owner approval to limit or prohibit short-term rentals (unless previously prohibited by the covenants prior to the enactment of the statute).

Of course, if your HOA already has a prohibition on short-term rentals that existed prior to the passage of Idaho Code 55-3211, it is likley still enforceable. However, even preexisting prohibitions are subject to legal attacks for being unclear or ambiguous. But these are issues for another time.

Due Process Hearings for Violations

Besides STRs, the next most common question I receive from HOAs and individuals alike pertains to alleged violations of the CCRs. Prior to the Act, HOAs could generally fine homeowners for alleged violations of the CCRs. Unless the homeowner wanted to spend the money suing the HOA issue, there was generally no alternative recourse. However, the Act turned this practice on its head with the passage of Idaho Code Sec. 55-3206.

Under Idaho Code Sec. 55-3206, before an HOA can fine a member for violation of the CCRs, two things must occur: First, the covenants need to expressly state that the HOA has the authority to impose fines for violations. Surprisingly, I have reviewed many CCRs that lack this crucial express authority. Without this authority, the HOA’s ability to assess fines is dead on arrival. Second, if the authority to assess fines exists, the HOA must hold a meeting or hearing, to determine whether there are grounds to impose a fine. The HOA must give at least least thirty days’ written notice before holding the hearing. However, if a member either rectifies the violation or begins resolving the violation before the meeting, the HOA is prohibited from imposing a fine as long as the member addresses the issue in “good faith.” What constitutes “good faith” is both highly contextual and constantly fought over.

If an HOA fails to satisfy both of the elements outlined above, it cannot issue a fine to the member. Furthermore, if the HOA bypasses the fine process and goes straight to a lawsuit without following the hearing process, it is precluded from obtaining attorney’s fees even if authorized by the CCRs. The provisions of Section 55-3206 have caused trouble for many HOAs that continue to impose fines under the “old system.” As a result, I advise both my HOA clients and individual homeowners to read and reread the provisions of Section 55-3206. Failure to abide by this law can result in significant and unnecessary legal costs should the matter be contested.

Final Thoughts

These are just a few of the major changes to Idaho law regarding HOAs. Of course, the Act has many more provisions that you should be aware of – regardless of whether you’re a homeowner within a subdivision or an HOA board member. These provisions range from solar panels and political signs to internal accessory dwelling units and family daycare homes. And, ifyou’re tracking movement within the Idaho legislature, you will see more provisions on their way.

Ultimately, HOA law is a perfect blend of two of my preferred areas of practice: business law and real property law. On the one hand, an individual’s property rights are constitutionally protected. On the other hand, when you buy a home in a subdivision, you expressly join a corporate organization and agree to abide by certain contractual provisions that affect your otherwise free use of your property. Given the interplay between these two areas of law, every homeowner should be well versed in his or her applicable CCRs, the provisions of the Act, and even the laws about non-profit corporations. Doing so will significantly protect against legal issues and many future headaches.

W. Forrest Fischer is an attorney with Moulton Law Office in Driggs. He can be reached at (208) 354-2345 or by email at office@tetonvalleylaw.com.

This column provides general information and is not to be considered legal advice. Readers with specific legal questions should consult an attorney. The Idaho State Bar Association provides a lawyer referral service, through their website at https://isb.idaho.gov/.