Indiana AG given authority to pursue HOAs for criminal acts

My to my surprise I had discovered that a state Attorney General must have specific legislation granting the AG to act against wrongful acts by an HOA.  Homeowners contacting their AG, like myself and many others, have been told that such legislation is needed.  Fortunately one state, Indiana, stepped up to the plate and enacted a law granting the AG to so act (PL 49-2011, HE1058).

Here’s the simply and succinct wording of this groundbreaking law, the first that I am aware of.

 

(b) IC 32-25.5-3-8 applies to all homeowners associations.

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.

Please note that this authority is restricted to criminal acts and does not permit the AG to get involved in the multitude of civil matters such as, breach of contract, rules enforcement, assessment collections or maintenance.  Basically, it’s about theft, embezzlement, misuse of funds, etc.  However, it is an important move in the right direction of the equal application of the laws and due process protections under the 14th Amendment.

This past August the Indiana AG filed suit against The Harbours Condominiums Association and against board members Kevin Zipperle, Mary Lou Trautwein-Lamkin and Sharon Chandler for allegedly breaching their fiduciary duty and committing fraud.

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Published in: on November 7, 2012 at 8:11 am  Comments (1)  
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