Homeowners’ Associations in Delaware must be registered as non-profit corporations and must, therefore, follow the state Nonprofit Association Act. In addition to nonprofit law, the Delaware Uniform Common Interest Ownership Act (DUCIOA) was created to provide more specific regulations for community associations.
Initial Code Of Regulation
HOAs in Delaware are given a considerable amount of freedom to create and implement their own rules and regulations regarding community association operation. When setting up a homeowners’ association, the initial Code of Regulation must be submitted with the government and address the following:
Identification of all property and the allocation of interest of common elements.
The method of calling meetings.
The number of owners and members of the council to reach quorum at meetings.
Number and qualifications of council members along with term limits and the method of filling vacancies.
Annual election processes.
The duties of each officer.
Maintenance and replacement of common elements and the payment cost necessary.
Manner of obtaining assessments and dues.
The method of adopting and amending community rules.
All the above bullet points must be addressed within the initial Code of Regulation because they are not standardized by state law.
Homeowners Association’s Rights and Responsibilities
The primary purpose of the HOA is to provide maintenance for common areas and to protect property value by enforcing the agreed-upon community code of regulations. To raise funds to offset the cost of maintaining common areas, the community association may collect assessments from unit owners. Assessments are collected based on the percentage of interest each homeowner has within the community. An association member with a property worth $200,000 will have to pay a larger share of the maintenance costs compared to a unit owner with a property worth $120,000. Because of this, they will also receive more voting power in elections and when voting on amendments to the code of regulations.
If a homeowner gets behind on payments, the association may impose liens on the property and impose reasonable fees up to 18% of the annual homeowner’s fees. In extreme cases, the board may force the sale of property in which case the owner must use the proceeds of the sale to pay overdue account balances or, with a majority vote from the unit owners, the association may purchase the property and rent or resell it to make up the money owed.
Overdue Account Balance
If a unit with an overdue account balance is sold voluntarily, the assessments must come out of the sale proceeds whether from the seller’s or the buyer’s side; whatever is stated in the contract. If owed money is not received by the association, it then becomes a common expense that must be paid by all unit owners, including the new owners of the property.
The board of directors can create, alter, and repeal aspects of the code of regulations. For any changes made, the board must have a majority vote from unit owners.
Association treasurers must keep detailed financial records and make them available to all unit owners during regular business hours.
Homeowner Rights in Delaware
To make any amendments or additions to community laws, the board of directors must receive a majority vote from the homeowners.
Homeowners have the right to attend all meetings, including executive board meetings. The board may have a closed session only when meeting with the legal counsel regarding a sensitive community issue. The minutes of all meetings must be recorded and made available to unit owners during regular business hours.
Notification of all meetings must be mailed to unit owners at least 14 days before the date of the meeting. Information regarding the meeting must also be posted in common areas at least seven days before the meeting.
HOAs in Delaware cannot restrict homeowners from flying an American Flag on their property. The association may regulate the size of flags above 3’x5’ or the number of flags flown. Homeowners also retain the right to post “For Sale” signs on their property up to 12”x18” so long as they are relevant.
The Delaware Uniform Common Interest Ownership Act (DUCIOA)
To ensure that your community association is being run following all state and local laws, it helps to have a professional on your side. CSM has a team of experienced professionals that have worked with communities in almost every state in the US. Specializing in HOA financial management, we can help your board of directors manage association finances, write and submit documents, and prepare for audits. If you have any questions regarding state HOA laws and regulations, give us a call at (865) 315-7505, contact us online or email us at firstname.lastname@example.org.