Federal laws that impact small HOAs
Homeowners associations are primarily governed by state law. State legislatures enact statutes authorizing HOAs within a state, and, for the most part, state laws and regulations govern how they operate. But there are some federal statutes that small HOAs need to know and comply with also.
Violations of federal law have severe consequences, even when unintentional. So, homeowners, board members, and officers must be familiar with the federal laws that apply to HOA’s.
Quite a few federal laws directly affect HOA functions – regulating what an association can and cannot do and providing protections to homeowners and the general public.
Fair Housing Act
The Fair Housing Act (FHA) prohibits discrimination in housing based upon race, color, religion, sex, familial status, and national origin. A subsequent amendment added disability to the “protected classes” enumerated in the FHA. 42 U.S.C. §3604.
Under the law, an HOA cannot take any adverse action affecting a person’s right to buy, rent, or enjoy the use of real estate based upon that individual’s membership in a protected class.
Exclusionary covenants preventing sales or leases to anyone within a protected class would violate the FHA, but the law also prohibits certain activities which might not seem so apparent on the surface. Here’s a link to more information on the Fair Housing Act.
Fair Debt Collection Practices Act
Both state and federal laws govern an HOA’s method of collecting delinquent payments. The HOA collections specialist Axela has an organized guide to federal and state regulations.
The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., regulates “debt collectors” who regularly attempt to collect debts owed to third parties by consumers. 15 U.S.C. §1692a(6).
The law requires certain notices to debtors, prohibits certain forms of communications, and generally bans harassment or abusive conduct by debt collectors toward consumers. 15 U.S.C. §1692b and c.
Here’s a link to more information about the FDCPA.
Freedom to Display the American Flag Act
The Freedom to Display the American Flag Act of 2005 is unique among federal laws impacting HOA’s in that it is expressly addressed to homeowners associations.
The law prohibits common interest communities from adopting or enforcing policies or entering into agreements “that would restrict or prevent a member of the association from displaying the flag of the United States on residential property within the association..."
Complete information about the Flag Act’s guidelines for HOAs.
Over-the-Air Reception Devices Rule (OTARD) - 47 CFR § 1.4000 - has been in effect since October 1996 and prohibits restrictions that impair the installation, maintenance, or use of antennas to receive video programming.
Homeowners Associations cannot prohibit or adopt restrictions that: (1) unreasonably delay or prevent installation, maintenance, or use of antennas; (2) unreasonably increase the cost of installation, maintenance, or use of antennas; or (3) preclude reception of an acceptable quality signal.
The United States Bankruptcy Code
The bankruptcy code is immensely complicated, but for homeowners associations, the important thing to know is that if a member files bankruptcy, the association cannot take any actions to collect assessments subject to the bankruptcy case, including filing liens or civil complaints, while the case is pending or until the court issues an order lifting the “automatic stay.” 11 U.S.C. §362.
Violations of the automatic stay can result in penalties imposed by the bankruptcy court, including, at minimum, having to return money or release a lien.
The Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act (SCRA), 50 U.S.C. §§ 3901 through 4043. The SCRA is intended to protect members of the U.S. Army, Navy, Air Force, Coast Guard, and Marine Corps from collections actions and foreclosures during their time in service.
The law protects servicemembers on active duty, activated reservists, and national guard members active for more than 30 consecutive days. Unlike the FDCPA, the SCRA applies to all creditors, not just “debt collectors.”
Below are links to the Community Association Advocacy Blog with updates on national and state legislative issues that affect HOAs.
From the Community Association Institute Advocacy Blog:
January update on federal laws and pending legislation that may affect small HOAs. Corporate Transparency Act update, 2025 legislative priorities, LA wildfire HOA resources