Information Maintained by

the Office of Code Revision Indiana Legislative Services Agency:

INDIANA CODE 32:

IC 32-25.5-3
Chapter 3. Homeowners Associations

pdf Chapter3 Homeowners Associations

 

 

IC 32-25.5-3-1
Roster of members; member addresses:

Sec. 1. (a) A homeowners association shall maintain:
       (1) a current roster of all members of the association; and
        (2) the mailing address and legal description for each member of the association.
    (b) The homeowners association shall also maintain any electronic mail addresses or facsimile (fax) numbers of those members who have consented to receive notice by electronic mail or facsimile (fax). Electronic mail addresses and facsimile (fax) numbers provided by a member to receive notice by electronic mail or facsimile (fax) shall be removed from the association's records when the member revokes consent to receive notice by electronic mail or facsimile (fax). However, the association is not liable for an erroneous disclosure of an electronic mail address or a facsimile (fax) number for receiving notices.
    (c) The mailing addresses and legal descriptions maintained by a homeowners association under subsection (a):
        (1) shall be made available to a member of the homeowners association upon request;
        (2) may be used by a member of the homeowners association only for a purpose related to the operation of the homeowners association; and
        (3) may not be used by a member of the homeowners association for personal reasons.
    (d) Except as provided in subsection (c), a homeowners association may not sell, exchange, or otherwise transfer information maintained by the homeowners association under this section to any person.
As added by P.L.167-2009, SEC.2.

 

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IC 32-25.5-3-2
Special meetings:

Sec. 2. (a) In addition to any other meeting held by a board, a board shall hold a special meeting of the members of a homeowners association if at least ten percent (10%) of the members of the homeowners association submit to the board at least one (1) written demand for the special meeting that:
        (1) describes the purpose for which the meeting is to be held; and
        (2) is signed by the members requesting the special meeting.
    (b) If a board does not send out a notice of the date, time, and place for a special meeting not more than thirty (30) days after the date the board receives a valid written demand for the special meeting under subsection (a), a member of the homeowners association who signed the written demand may:
        (1) set the date, time, and place for the special meeting; and


        (2) send out the notice for the special meeting to the other members.
As added by P.L.167-2009, SEC.2. Amended by P.L.1-2010, SEC.128.

 

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IC 32-25.5-3-3
Annual budget; budget meeting; budget approval

Sec. 3. (a) A homeowners association shall prepare an annual budget.
    (b) The annual budget must reflect:
        (1) the estimated revenues and expenses for the budget year; and
        (2) the estimated surplus or deficit as of the end of the current budget year.
    (c) The homeowners association shall provide each member of the homeowners association with:
        (1) a:
            (A) copy of the proposed annual budget; or
            (B) written notice that a copy of the proposed annual budget is available upon request at no charge to the member; and
        (2) a written notice of the amount of any increase or decrease in a regular annual assessment paid by the members that would occur if the proposed annual budget is approved;
before the homeowners association meeting held under subsection (d).
    (d) Subject to subsection (f), a homeowners association budget must be approved at a meeting of the homeowners association members by a majority of the members of the homeowners association in attendance at a meeting called and conducted in accordance with the requirements of the homeowners association's governing documents.
    (e) For purposes of this section, a member of a homeowners association is considered to be in attendance at a meeting if the member attends:
        (1) in person;
        (2) by proxy; or
        (3) by any other means allowed under:
            (A) state law; or
            (B) the governing documents of the homeowners association.
    (f) If the number of members of the homeowners association in attendance at a meeting held under subsection (d) does not constitute a quorum as defined in the governing documents of the homeowners association, the board may adopt an annual budget for the homeowners association for the ensuing year in an amount that does not exceed one hundred percent (100%) of the amount of the last approved homeowners association annual budget. However, the board may adopt an annual budget for the homeowners association for the ensuing year in an amount that does not exceed one hundred ten percent (110%) of the amount of the last approved homeowners

association annual budget if the governing documents of the homeowners association allow the board to adopt an annual budget under this subsection for the ensuing year in an amount that does not exceed one hundred ten percent (110%) of the amount of the last approved homeowners association annual budget.
As added by P.L.167-2009, SEC.2.

 

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IC 32-25.5-3-4
Approval of certain contracts; meeting; vote:


Sec. 4. (a) This section does not apply to a contract entered into by a board that would resolve, settle, or otherwise satisfy an act of enforcement against a homeowners association for violating a state or local law.
    (b) A board may not enter into any contract that would result in a new assessment or the increase in an existing assessment payable by the affected members of the homeowners association in the amount of more than five hundred dollars ($500) per year for each affected member of the homeowners association unless:
        (1) the board holds at least two (2) homeowners association meetings concerning the contract; and
        (2) the contract is approved by the affirmative vote of at least two-thirds (2/3) of the affected members of the homeowners association.
    (c) A board shall give notice of the first homeowners association meeting held under subsection (b):
        (1) to each member of the homeowners association; and
        (2) at least seven (7) calendar days before the date the meeting occurs.
As added by P.L.167-2009, SEC.2.

 

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IC 32-25.5-3-5
Borrowing money; approval by members:


Sec. 5. (a) This section does not apply to money borrowed by a homeowners association that is needed to:
        (1) resolve, settle, or otherwise satisfy an act of enforcement against the homeowners association for violating a state or local law; or
        (2) address an emergency that affects the public health, safety, or welfare.
    (b) A homeowners association may not borrow money during any calendar year on behalf of the homeowners association in an amount that exceeds the greater of:
        (1) five thousand dollars ($5,000) during any calendar year; or
        (2) if the homeowners association operated under an annual budget in the previous calendar year, an amount equal to at least ten percent (10%) of the previous annual budget of the homeowners association;
unless borrowing the money is approved by the affirmative vote of a majority of the members of the homeowners association voting under this section.


    (c) A person who owns a lot, parcel, tract, unit, or interest in land in a subdivision may cast one (1) vote under this section for each lot, parcel, tract, unit, or interest in land in the subdivision that is owned by the person unless the governing documents provide for a different voting procedure.
    (d) A vote held under this section must be conducted by paper ballot.
    (e) A homeowners association shall distribute paper ballots to persons eligible to vote under this section at least thirty (30) days before the date the votes are to be opened and counted.
    (f) Votes cast under this section shall be opened and counted at a public meeting held by the homeowners association.
As added by P.L.167-2009, SEC.2.

 

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IC 32-25.5-3-6
Grievance resolution procedures:

Sec. 6. The governing documents must include grievance resolution procedures that apply to all members of the homeowners association and the board.
As added by P.L.167-2009, SEC.2.

 

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IC 32-25.5-3-7
Member voting rights:

Sec. 7. A homeowners association may not suspend the voting rights of a member for nonpayment of any assessments unless:
        (1) the governing documents provide for suspension; and
        (2) the assessments are delinquent for more than six (6) months.
As added by P.L.167-2009, SEC.2.

 

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IC 32-25.5-3-8
Attorney general's action against association or board member; misappropriation or fraud; remedies:

Sec. 8. (a) The attorney general may bring an action against a board or an individual member of a board of a homeowners association if the attorney general finds that:
        (1) the association's funds have been knowingly or intentionally misappropriated or diverted by a board member; or
        (2) a board member has knowingly or intentionally used the board member's position on the board to commit fraud or a criminal act against the association or the association's members.
    (b) A court in which an action is brought under this section may do the following:
        (1) Issue an injunction.
        (2) Order the board member to make restitution to the homeowners association or to a member.
        (3) Order a board member to be removed from the board.
        (4) Order a board member to reimburse the state for the reasonable costs of the attorney general's investigation and prosecution of the violation.
http://www.in.gov/legislative/ic/code/title32/ar25.5/ch3.html

 

 

The lesson: If you belong to a homeowners association, ask questions, and get involved – Do it sooner than later! 

A neighbor stated: “Every Home Owner Association needs to have involvement from everybody who lives there," "You can just drive in and out the neighborhood every day and assume things are going to be OK."

Property management experts recommend all homeowners who live in a neighborhood governed by a HOA take these important steps now:

  • Regularly attend your neighborhood's HOA meetings. Some HOAs formally meet once a year while others meet several times each month. Get a list of your HOA scheduled meetings, attend meetings and get to know your neighbors who are on the board. This will not only help you to stay informed of HOA decisions and neighborhood issues, but will also help if you should ever have your own concern to bring to the HOA's attention.
  • Carefully review budgets and expenses. Make sure the numbers add up. Look for expenses that seem odd, too vague or don't make sense. If necessary, ask for clarification to make sure you understand how your money is being spent.
  • Elect qualified board members.  This again means getting to know your neighbors who are running for positions and, of course, voting during HOA elections. Choosing unqualified candidates can cause big trouble. An HOA election should not be a popularity contest. The financial well-being of your neighborhood is at stake.
  • Volunteer and join the board yourself.  Some board positions are elected (in many cases uncontested due to a lack of interest). Other positions are appointed. If you have the time and interest, volunteer for a board position or for a committee assignment to help shape the decisions of your neighborhood.
  • Know your neighborhood rules and restrictions. You are bound by the covenants of your HOA. Those neighborhood rules have the weight of law. Not knowing the rules is not an excuse for breaking them.  If you don't like the rules, make sure you are taking the other steps listed above.

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Homeowners rights

If you break the rules of your homeowners association, be prepared to hear about it.

Most HOAs contract with a property management company to enforce the rules, and that usually begins with a letter in your mailbox.

If there is a repeated problem, property manager will send a letter explaining the concern, and the concern is usually addressed right away.

If you receive a letter alleging a violation of HOA rules and believe you are wrongly accused (or that the HOA is overstepping its authority), it is  recommended to contact the property management company or HOA president and calmly discuss it. 

If the situation cannot be resolved, take a another close look at your HOA covenants and restrictions, and decide whether it's worth your time and expense to fight.

"For most of these cases, court is not the way to go," said Phil Nicely, a longtime real estate attorney in Indianapolis. "As a practical matter, the best way to proceed with an overzealous HOA is to get a new board of directors. If they are not doing their job, get the people out that are running the association and vote some new ones in that are more reasonable."

Indiana lawmakers passed a law that allows Hoosiers to hold their HOAs accountable for acts of mismanagement and fraud.  The law allows the attorney general to file legal action against a HOA and its board members that engaged in illegal or fraudulent activity. The AG may seek injunctions against illegal conduct or seek restitution and civil penalties of up to $5,000 per violation.

Indiana's attorney general applauded the new law.

"Because they impose fees on and require certain things of residents, homeowners associations exist almost as their own form of government," attorney general Greg Zoeller said last summer. "Therefore it is appropriate that they be publicly accountable and subject to review."

http://www.wthr.com/story/19094292/13-investigates-homeowners-associations

 According to the Community Associations Institute, there are more than 314,000 homeowners associations in the United States, impacting more than 62 million people.  The following resources are for those who currently live in a HOA or who are considering moving into a neighborhood governed by a HOA:

Indiana Law Regarding Homeowners Associations

IN ATTORNEY GENERAL-FILE A COMPLAINT

What to Know About Homeowner Associations

What Homeowners' Associations May Regulate

Homeowner associations: Devils or angels?

 

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