Homeowners and Road Associations

 

Requirements, Responsibilities, and Disputes

Homeowners’ and Road Associations are usually created so that people living along a particular road or in a particular subdivision can manage maintenance of common open spaces – subdivision or private road – together. In some cases, a town may require that an association be created before permits for a subdivision or road are issued, and may stipulate some specific standards and required areas of responsibility.

Associations may have responsibility for maintaining common areas like private sewage treatment system and/or private roads together. They may also be responsible for enforcing existing deed restrictions and covenants affecting property owners’ use of common areas and of their own lots, and may choose as a body to create additional rules. These might include obligations of property owners to keep their property free of debris or junk vehicles and limitations on owners’ rights to maintain certain kinds of pets or conduct business. They might also require that structures be a certain size and quality. Additions and changes to Association rules, including membership fees, may be made by vote of the membership, as long as they do not conflict with municipal, state, or federal laws. Associations must be governed by a Board of Directors, who will be legally responsible for accomplishing the purposes of the association, and accounting for funds.

An Association must be created in accordance with applicable laws or it may be deemed invalid, which could expose the members to liabilities they did not expect. The Maine Non-Profit Corporation Act is one of the central state statutes governing road and homeowner’s associations. Other laws and regulations - the Federal Interstate Land Sales Act, the Americans with Disabilities Act, the Fair Housing Act, as well as various municipal and state zoning and subdivision ordinances and statutes – may also determine how an association is created, altered, or dissolved. For this reason, it is virtually essential that the members consult an attorney when establishing an association, and again when any changes are introduced.

Association Boards of Directors are responsible to their members, and if disputes arise between the governing Board and a member or members, those with the grievance may hire a separate attorney – though it generally cannot be the same as the one who has advised the Association as a whole – to press their case. Such disputes might include disagreements on how the Board has assessed or accounted for dues or capital reserve accounts, maintained common areas, or enforced beneficial restrictions and covenants. For help navigating legal issues involving real estate associations, consult an attorney.

Related Legal Terms and Definitions

Allocated Interests - the undivided interests in the common areas, the common expense liability and votes in the association allocated to each lot or land parcel affected

Common Areas - all portions of a subdivision’s common areas including private roads and private but common sewage or storm water treatment systems, but excluding publicly accepted roads and individually owned house lots or property.

Declaration of Restrictive and Protective Covenants - a publicly recorded document that beneficially affects property owners until such time as those affected agree upon a release or an amendment. No statutory timeline currently limits these restrictions but restrictions that are deemed oppressive or contrary to public policy may not be enforced by a court.

Common Expenses - the expenditures made by or financial liabilities of the association, together with any allocations to reserves.

Declarant - any person or group of persons acting in concert who forms the association (usually the same person or group who develops the subdivision and records a Declaration of Restrictive or Protective Covenants) and then as a part of a common promotional plan, offers to dispose of his/her or its interest in the lots in the subdivision which automatically convey a membership interest in the association.

Executive Board - the body, regardless of name, designated in the documents forming the association to act on behalf of the association.

Articles of Incorporation - the original or restated articles of incorporation and all amendments thereto. It includes the certificate of incorporation, articles of merger, articles of consolidation and, in the case of a corporation created by special Act of the Legislature, the special Act and any amendments thereto.

Board of Directors - the group of persons vested with the management of the affairs of the corporation irrespective of the various names, such as board of trustees or board of managers, by which such group is designated.

Bylaws - the code or codes of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated. It includes the corporation's constitution unless the constitution is filed as the articles of incorporation or enacted by the Legislature in a special Act.

These definitions describe only some aspects of Maine’s laws governing homeowners and road association topics. For help organizing an association or help in a dispute against an association, consult with an attorney.

For a Maine attorney familiar with Real Estate Associations

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This is for general information only. It is not intended as legal advice.