Legislative work group refines HOA reform recommendations, debates banning association foreclosures

Representative Kristen Bonner, chair of the work group on common interest communities and homeowners associations, opened the Jan. 17 meeting and said members would spend the session refining recommendations for a final report to the Legislature.

Mister George, who walked members through the draft final report posted to the group's website, said the document includes an executive summary, enabling legislation references, meeting summaries, a summary of public testimony and a placeholder for final recommendations. "We have posted a draft final report to the working group's website," he said, and staff will attach the large recommendations spreadsheet as an appendix.

Members spent most of the meeting in facilitated small groups and then reconvened for a large-group discussion to prioritize changes and close gaps. Several recurring themes emerged: narrowing the scope of HOA authority, easing dissolution rules for associations that no longer fit their communities, stronger dispute-resolution pathways and education for boards and managers.

"One of the key things that came up was trying to restrict, or maybe I would use the word simplify, what HOAs have jurisdiction over and really trying to connect HOA governance to common area maintenance, operations, and insurance," Member Kimball said. She recommended limiting how much HOAs can regulate property that belongs to individual homeowners, particularly in single-family, detached settings.

Member Bridal urged the group to address how governing documents are drafted at the development phase, arguing that many rules and restrictions originate with developers' declarations. "So maybe that guideline starts from the development phase when those governing documents are being drafted," Bridal said, noting distinctions between townhomes, condos and single-family associations.

Several members pressed for clearer legal drafting. "Reasonable can be very subjective," Senator Pa cautioned, asking that any use of the term be tethered to an objective standard or existing legal benchmark (for example, specifying a number of days when referencing "reasonable time").

The meeting included a pronounced debate about whether HOAs should be able to foreclose on homes. Member Butler said association foreclosure power has caused harm and should be eliminated. "HOAs should no longer be allowed to foreclose on homes," she said, citing personal experience and arguing that lenders — not associations — should hold foreclosure authority.

Other members warned of practical trade-offs to an outright ban. Member Zabodski said states that prohibited HOA foreclosure experienced deferred maintenance and collection challenges: "If foreclosure isn't allowed, the HOA is handcuffed and trying to collect the money they need to operate," he said, noting that some properties are held in trusts or LLCs where collection through credit reporting is impractical.

Multiple members advocated for a layered dispute-resolution system and an ombudsperson to provide mediation and education and to limit court costs. "There should be a dispute resolution process with an ombudsperson or someone who can try and keep legal fees down," Member Kimball said. Chair Bonner told members that Chair Mueller plans to reintroduce an ombudsman bill addressing similar concerns.

Speakers also urged stronger education and oversight for board members and management companies to reduce rule violations that stem from ignorance rather than bad faith. Member Howard described education and incentives for compliance as a recurring theme in public testimony and breakout discussions.

On procedural matters, the group approved the Jan. 10 meeting minutes by voice vote; the transcript records several members saying "aye," and the chair announced the minutes approved. Members were instructed to submit any additional suggestions for the recommendations package by Tuesday (preferably by noon) so staff can compile a revised version for review prior to a final meeting scheduled for Friday, Jan. 24, from 10 a.m. to noon via Zoom. Senator Pa told the group that legislative colleagues are already watching the work and expressed strong interest in the recommendations.

The work group's next steps are to have staff insert prioritized recommendations into the draft report appendix and circulate an updated packet in Excel format for members to review ahead of the Jan. 24 meeting.