Homeowners Association Laws in Oregon
An understanding of the general framework of these HOAs is essential to appreciating their influence over property ownership in Oregon. Self-governing associations of property owners became possible in the state as soon as the bill enabling the creation of COAs was signed into law in 1963 (Oregon Revised Statute ("ORS") 100.005). Go beyond this, and an entire series of statutes sets out the laws governing these associations.
The purpose of these statutes is to provide a basic legal framework that empowers HOAs and provides for the association’s management. In turn, the Homeowners Association’s governing document – the CCRs (which are often also called the "Declaration" or "Covenants") , the Bylaws, or the Rules and Regulations – will provide greater specificity about how the association will operate.
Since the passage of the 1963 bill, more than a dozen additional statutes and the restatement of some existing laws have gradually expanded the legal framework governing HOAs. Let’s summarize some of the key statutes and their function as they relate to HOAs.
These statutes clarify the power and responsibilities of HOAs. For example, these provisions address the president’s power to call a special meeting; define a ‘quorum’ and establishes what constitutes a ‘no action’ vote; and outline the process for initiating HOA litigation by a vote of the members.
Member Rights & Responsibilities for Oregon HOA’s
Members of HOAs in Oregon have a range of obligations, rights and responsibilities. According to the law, owners of property within a planned community are obligated to carry all regular and special assessments for common expenses. This means that any expense that benefits the entire HOA must be shared proportionately by each owner. There are some exceptions to the assessment payments requiring agreement by at least sixty-seven percent of the owners. This includes assessments related to capital expenditures for real estate or improvements, an increase in assessments for common expenses, and a decrease in assessments.
All members of an HOA in Oregon must be given the right to vote at regular and special meetings. This is usually one vote per parcel of real estate. Votes may be cast by the owner in person or by proxy. Votes can be counted if there is a quorum present; a quorum in this case requires double the number of votes necessary for the action to be taken at a regular meeting.
Any owner also has the right to access the minutes and records of CANPCA homeowners associations. However, the homeowner association is not required to make available any financial information that would allow a member to determine the amount owed by another member. Owners may petition the court for a forced disclosure of certain records if there is evidence that the board or manager are misusing funds.
HOA members in Oregon must fulfill their duties under the governing documents of the association. While state law outlines certain provisions, the governing documents will ordinarily state the requirements for voting and assessments. Owners must fulfill these obligations; otherwise, the association may lien the lot as a mechanism for repayment.
Homeowners Association Board of Directors Powers in Oregon
One of the most common questions that I receive is what do HOA boards have the power to do under the law? Like many legal topics, this is not a simple question to answer. We must first look to the governing documents of the Association. While many of these documents refer to the "Declarant" as having all of the powers of the Board, this is only true during the Declarant Control Period. When Declarant Control Period ends, the Association members may not be able to simply kick out the Declarant’s appointees, but the Declarant does not have any specific powers over the Board. The Board will then have only those powers agreed to by the members in the governing documents.
This is not to say that the governing documents can grant the Board unlimited powers. Instead, the documents can only grant certain powers to the Board, up to the limits imposed by statute. Under Oregon law (specifically ORS 94.550-94.585 and ORS 100.105), all HOAs are subject to the SB 1000 laws which give associations certain rights and limitations.
Some of the more notable restrictions imposed by the SB 1000 laws includes an association’s ability to collect attorney fees from delinquent assessments. For example, ORS 100.105 provides:
Without limiting any of the other powers granted to an association by its governing documents, an association shall have the power to:
***
(6) After notice and an opportunity to be heard, levy reasonable fines against members for violations of the governing documents or rules or regulations of the association, upon a finding that the member has violated the governing documents or the rules or regulations of the association. Said fines shall not to exceed any reasonable amount specified in the association’s governing documents or, if no amount is specified, $100 for any single violation unless the association has suffered actual damages as a result of such violation. If to be collected in small claims court, the fine may be up to $1,000 for any single violation.
***
There is an important caveat to this provision. It would seem that it should be easy for an association to collect a $100 fine if it can prove a person violated the governing documents. However, when you apply rules and principles established by the courts, the issue gets a little more complicated.
The general rule for collecting a fine in court is the association must prove a breach of the governing documents. The association must also prove that the fine was reasonable. One way to ensure the fine meets the "reasonableness" standard is to include the fines in the governing documents. Even if there are no fines in the governing documents, the court will usually defer to management’s decision and find the fine reasonable if it was not arbitrary or capricious. Arbitrary and capricious usually means the manager sets a fine without following the rules or without giving an opportunity to be heard.
Other limitations include the courts may not enforce certain provisions of the rules of the association unless the member consented in writing to the rule or if the rule is in the governing documents. For example, one common limitation on rules is in determining if the board can ban a person from an association. While the manager or board may have the best intentions to prohibit a problem person from an association, the board should have authority from the members or make sure it is in the governing documents.
While the association can write rules and enforce them against other members, the board must have the legal authority to do so. The governing documents provide the rules for what the association can and cannot do. The state statutes provide some external limitations which the association must follow.
Enforcement and Alternative Dispute Resolution in HOA’s
The Oregon Planned Community Act provides that where the governing documents of the HOA are silent on the matter, the member must request from the board the alternative dispute resolution process set forth in the act, which is mediation, before proceeding with a judicial remedy.
In almost all cases, the association’s bylaws and CC&Rs contain provisions which provide alternative dispute resolution procedures other than judicial remedy. The bylaws also typically contain a right and obligation to appeal a decision of the board of directors to a panel consisting of the unit owners.
Most boards will hear grievances of members informally . If an agreement cannot be reached, the board will then hold a formal hearing, where a written warning is issued, and a resolution is passed by a vote of the board. At this point in the process the grievance has become a fine, lien or assessment and is therefore subject to rights of judicial review under Oregon law, as well as the right to a "shortened hearing".
An association may not enforce a provision of the governing documents of an HOA by imposing a fine or charging a fee unless the bylaws or CC&Rs impose such fines and fees and the proposed fine or fee is listed on a schedule of fines and fees established by the board and made available to members.
Your Oregon HOA Laws Update: Recent Statutory Changes
In recent years, Oregon’s robust community development has seen a corresponding evolution in HOA laws. Homeowners and associations need to stay current on the important legislative amendments that can directly impact them. One such change is within the realm of energy efficiency. Under the Solar Access Law, ORS 94.540, HOAs are prohibited from prohibiting or unreasonably restricting the installation of solar energy systems. Owners who believe that HOAs have unreasonably restricted the installation of these systems can submit a complaint to the Department of Consumer and Business Services, or DCBS, so long as the HOA is governed by Oregon’s Planned Communities Act (ORS Chapters 94, 94A, and 94C) or the Oregon Condominium Act (ORS Chapter 100). DCBS has been increasingly tasked with the responsibility for regulating the land use and building aspects of community associations.
In addition to laws that enhance the functionality of HOAs and protect their member’s rights, the 2019 Oregon Legislative session resulted in the repeal of certain statutes. Sections 1-5, 7, 9, 11, 13 and 15, Chapter 590, Oregon Laws 2017, relating to the development of planned communities and condominiums, have been repealed. This means that for planned communities and condos established on or after July 1, 2019, parts of the statute are no longer in effect.
Homeowners Association Resources & Support
For those living in or near HOAs in Oregon, the Homeowners Association Information and Resources Page of the Oregon Secretary of State’s web site may be a good place to start. The site contains information on required public information disclosures that HOAs must issue, basic HOA Statutes and state agency contact information.
As in other states, the Oregon Real Estate Agency and the Oregon Department of Consumer and Business Services’ Division of Financial Regulation do not regulate or oversee HOAs. However , they may help settle differences in fees charged by HOAs. Mediators may also assist with resolving disputes with HOAs.
The Community Associations Institute (CAI) – Pacific Northwest Chapter provides some guidance on other consumer protection statutes that HOAs must be aware of including the Oregon Residential Landlord and Tenant Act (ORS 90). The Oregon Attorney General’s Mediation Services Section also provides an informative overview of mediation for civil disputes.