Rules for Homeowners Associations in Oregon

Many new dwellings today are constructed as part of a planned community or a condominium project. These homes and their communities are governed by a homeowners association.

Some homeowners associations, or HOAs, opt to stay very much in the background, simply collecting dues and taking care of the common areas. Others enact and enforce strict rules that restrict the choices available to their members. But who sets the rules for the HOAs?

In the state of Oregon, a number of state laws regulate the procedures of HOAs and set limits on their authority. These laws include the Oregon Planned Community Act, the Oregon Condominium Act and the Oregon Nonprofit Corporation Act.

Other state laws also apply to HOAs, even though they are more general in nature. These include the Open Meetings Law, laws encouraging use of solar panels, and the Oregon Unfair Debt Collect Practices Act.

The Oregon Planned Community Act is one of the central state laws that regulate homeowners associations in residential planned communities. The act sets out rules and procedures for the creation, authority, management and operation of these HOAs.

This law is found in the Oregon Revised Statutes, Title 10, Chapter 94. It is divided into six sections, each addressing different matters including annual budgets, voting rights, insurance requirements and assessments and liens. The fourth section addresses HOAs.

Under OR Rev Stat Section 94.625 (2021), a planned residential community must organize as a nonprofit community under Oregon laws. This must happen on or before the date when the first lot in the planned community is conveyed.

By that day, those organizing the residential community must also adopt initial bylaws on behalf of the HOA. These bylaws are described in Oregon Revised Statutes 94.635.

The bylaws are intended to govern the administration of the planned community, and once adopted, should be promptly recorded with the recording officer of each county in which the planned community is located.

Both the president and the secretary of the HOA must acknowledge that the bylaws are the duly adopted bylaws of the association. Once the bylaws are recorded, any amendments to them must be similarly recorded. An amendment is not effective unless it is approved by a majority of the votes.

Under Oregon law, however, an amendment to the bylaws is conclusively presumed to have been regularly adopted unless an action is brought within one year.

The Oregon Condominium Act governs the creation, conversion, common expenses, apportionment of interest, management, and powers of condominium associations in the state. It also covers voting rights, insurance, association administration and insurance requirements.

The Oregon Condominium Act is found in the Oregon Revised Statutes, Title 10, Chapter 100. It consists of 22 sections. The Act provides a legal framework for the condominium formation, conversion, apportionment of interest, common expenses, management, insurance, disclosures, voting rights, association administration and powers.

In Oregon, homeowners associations must establish themselves as either nonprofit or for-profit corporations. When they decide to be nonprofits, HOAs are controlled by the rules in the Oregon Nonprofit Corporation Act, starting at Oregon Revised Statutes Section 646.639. This Act sets out corporate structure rules for nonprofits.

A condominium association founded on or after September 27, 2007, must be organized as a corporation for profit or a nonprofit corporation. This does not apply to a condominium complex with four or fewer dwelling units. The Oregon Nonprofit Corporation Act regulates nonprofit condominium associations.

The Oregon open meetings law applies to both Oregon homeowners associations and condominium unit owners associations. The law for planned communities is found at Oregon Revised Statutes Section 96.640, and the law regarding condominiums is found at Oregon Revised Statutes Section 100.420 for condominiums.

These statutes were quite different, but after they were amended by the legislature in 2021 by the adoption of Senate Bill 329, the rules for the two became essentially identical.

The Oregon state legislature uses laws applying to HOAs to advance other priorities of the state. For example, the HOA laws found under Chapter 94 and Chapter 105 both make it illegal for an Oregon homeowners association to prohibit members from installing solar energy devices such as solar panels on their property.

If a planned community includes provisions forbidding solar panels in their declaration or bylaws, the codes are void and cannot be enforced. On the other hand, the laws allow HOAs to limit the size and regulate the placement of the panels.

State laws also make it clear that the provisions of the Oregon Unfair Debt Collect Practices Act apply to homeowner association dues. This law is the state equivalent of the federal Fair Debt Collection Practices Act that protects consumers around the country from unfair debt collection practices.

Under the Oregon law, property owners are considered consumers whom the law was enacted to protect. Homeowners association dues are considered debts under the Act, and unfair collection practices by debt collectors, like third-party collectors, are forbidden. The homeowners association itself is not considered a debt collector under the act.

Any homeowner injured by unfair collection practices of their HOA dues can:

• Report the matter to the Federal Trade Commission.
  
• Report the matter to the Consumer Financial Protection Bureau.
  
• Report the matter to the Oregon Department of Justice.
• Sue the debt collector in federal or state court.

The federal Fair Housing Act forbids housing discrimination based on color, race, national origin, sex, sexual orientation, religion, familial status, marital status, disability, or source of income. The Oregon Revised Statutes offer similar protection on a state level.

Those who are victims of housing discrimination can file a complaint with the U.S. Department of Housing and Urban Development or the Bureau of Labor and Industries. They also have the option of filing a private lawsuit in federal district court.

The Oregon HOA laws underline HOA responsibilities regarding fair housing by requiring that, before the last day of 2022, each homeowners association must take a close look at its governing documents to make sure they do not contain any illegal restrictions.

These include any restriction, rule or regulation against the use of the community or the lots by a person or group of persons because of:

• Race.
• Color.
• Religion.
• Sex.
• Sexual orientation.
• Gender identity.
• National origin.
• Marital status.
• Familial status.
• Source of income.
• Disability.
• Number of individuals, including family members, persons of close affinity or unrelated persons, who are simultaneously occupying a dwelling unit within occupancy limits.