As you know, your HOA in Albuquerque is governed by a number of state and federal laws. Generally speaking, those laws begin with the New Mexico Homeowner Association Act, which has been on the books since 2013. This law applies to all HOAs in Albuquerque and throughout the entire state, with some very limited exceptions. It does not apply to condominium associations because they have their own law. The New Mexico Nonprofit Act is also relevant to many HOAs since generally, they are operated as nonprofit organizations.
While the state laws definitely take precedence, HOAs in New Mexico are also required to follow federal regulations, such as the Fair Housing Act, ensuring nondiscrimination in housing practices. The laws combine to protect the rights of homeowners while enabling the HOA to enforce community rules effectively.
We want current and prospective members of New Mexico homeowners associations to be aware of these laws that have such a huge impact on the associations, as they affect their property rights and responsibilities within the HOA community.
So, today, we’re taking a look at the specific laws we’ve mentioned above, and we’re also discussing how to make sure you’re staying compliant.
Legal Documents and HOA Compliance
Every HOA has to establish themselves with the state of New Mexico, register with the county clerk, and establish and file these essential documents.
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Articles of Incorporation and Bylaws Nearly every HOA we have encountered is established as a non-profit organization, and that means you need to file your Articles of Incorporation with the New Mexico Secretary of State. These articles legally create the HOA, establishing its name and purpose. The Articles of Incorporation will also provide the names of the initial board of directors. Bylaws are also created to establish the day-to-day operations of the HOA. Most bylaws will talk about organizational structure, meeting procedures, rights and duties of members, and the processes for elections. |
Responsibilities of Board Members As you begin to elect and welcome new board members onto your HOA leadership team, remember that they are responsible for acting as the governing body of the association. That includes complying with all HOA laws in the state. Board members are also called upon to uphold the bylaws and the CC&Rs. There are funds that need to be ethically and transparently managed, and the common areas throughout the community will be their responsibility, too. Board members serve the interests of the association, making decisions on behalf of members. |
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Declaration of Covenants and Community Documents Community Documents, including the Declaration of Covenants, are paramount for establishing an HOA’s regulations. They must be filed with the county clerk of the county where the property is located. This declaration outlines the obligatory covenants for homeowners, restrictions, and obligations, ensuring all community members are aware of their rights and responsibilities. |
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Essential Things to Know About the New Mexico Homeowners Association Act
For HOA boards in New Mexico, understanding the requirements and guidelines set forth in the New Mexico Homeowners Association Act is both a legal necessity and a practical advantage. It is a state law that outlines essential rules and responsibilities for homeowners associations. It governs how HOAs should operate, covering everything from financial disclosures to board duties and the enforcement of community rules.
This key legislation helps ensure transparency, fairness, and accountability in the management of communities and associations throughout the state.
If you’re part of an HOA board, it’s crucial to stay informed about what the law expects of you. Here’s a clear and concise breakdown of some of the most essential aspects of the New Mexico HOA Act and what they mean for your community.
| Mandatory Open Meetings
The HOA Act emphasizes transparency by requiring mandatory open meetings for association members. All regularly scheduled board meetings must be open to the HOA’s membership, and members must be notified in advance. Open meetings foster trust and transparency, enabling residents to stay informed about the decisions that impact their community. Provide clear notices with detailed agendas at least 48 hours in advance to ensure compliance and encourage member participation. |
Access to Records
Homeowners are entitled to access certain HOA records, such as financial statements, meeting minutes, and governing documents. The HOA Act mandates that these records should be readily available to residents upon request, with reasonable limitations. Transparency in record-keeping can help prevent misunderstandings, ensuring homeowners feel involved and informed. Maintain organized, up-to-date records and establish a clear process for managing record access requests. |
| Financial Management and Budgeting
The HOA Act requires HOAs to maintain financial accountability through proper budgeting and regular reporting to homeowners. Boards must ensure that association funds are used responsibly and are allocated based on operational needs. Mismanagement of funds can lead to financial instability and legal disputes. Clear financial accountability builds credibility and confidence among residents. Develop an annual budget and provide detailed summaries of expenses and reserve funds to homeowners during community meetings. |
Fair Rule Enforcement
The Act includes provisions on how HOAs should enforce their rules and regulations. It ensures that enforcement is consistent, fair, and non-discriminatory. Homeowners must be informed of rule violations, given opportunities to respond, and offered a fair enforcement process. Arbitrary or unfair enforcement can damage relationships between boards and residents while exposing the HOA to legal risks. Create clear and consistent rule enforcement policies and document all communications and actions related to violations. |
| Amendment of Governing Documents
The HOA Act provides guidance on the process for amending governing documents, such as CC&Rs (Covenants, Conditions, and Restrictions) or bylaws. Amendments typically require approval by a certain percentage of homeowners to ensure community consensus. Having clear guidelines helps simplify the process of adapting governing documents to meet the community’s evolving needs. Communicate changes early, gather feedback from residents to build consensus, and follow proper voting procedures. |
Dispute Resolution
The Act encourages dispute resolution processes to handle disagreements between homeowners and the HOA or between individual homeowners. Alternative dispute resolution (ADR) methods, such as mediation, are often preferred over litigation. Efficient dispute resolution reduces the time, cost, and tension associated with legal proceedings. Establish a clear policy for handling complaints and disputes. Consider partnering with a legal expert to ensure fair and lawful resolution processes. |
Why Compliance With the HOA Act Matters
For an HOA board in New Mexico, following the HOA Act isn’t just about avoiding fines and lawsuits—it’s also about creating a thriving community with satisfied homeowners. When you comply with the law, you foster better communication, greater trust, and a more harmonious environment for all residents.
What to Know About the New Mexico Condominium Act
Tailored for condominiums, this act provides guidelines separate from those governing other types of homeowner associations. This act is particularly pertinent to condominium owners and associations. It covers just about everything that the HOA Act covers, but it’s specific to condominium associations.
How is the New Mexico Nonprofit Corporation Act Relevant?
Since many HOAs operate as nonprofit entities, this act becomes relevant, outlining the governing structure and corporate responsibilities applicable to such associations.
The governance of an HOA involves numerous legal and administrative responsibilities. The NMNCA lays out guidelines that can impact:
| Board Member Roles & Responsibilities
The Act defines general expectations for nonprofit board members, including fiduciary responsibilities like duty of care, loyalty, and obedience. For HOAs, this means ensuring that board members act in good faith, make informed decisions, and remain focused on the community’s best interests |
Organization Structure
HOAs, as nonprofit corporations, must adhere to specific rules about their structure. This includes member voting rights, election procedures, and leadership transitions. Following these guidelines ensures your HOA runs smoothly and legally. |
| Record-Keeping Requirements
The NMNCA mandates the proper maintenance of records. This means HOAs must keep accurate and up-to-date meeting minutes, financial reports, and governing documents, which are vital for transparency and legal compliance. |
Annual Meetings
The Act requires nonprofit entities to hold annual meetings. For HOAs, this is where members can discuss community issues, vote on new board members, and review financial reports. Failing to follow these requirements can lead to legal complications. |
How to Stay Compliant as an HOA Board Member
Navigating the complexities of HOA laws can feel overwhelming at times. Here are some steps you can take to maintain compliance with the NMNCA and other regulations:
- Stay Educated. Attend training sessions or workshops on nonprofit governance and HOA management. Understand how the NMNCA applies to your HOA.
- Review Governing Documents. Periodically review and update your CC&Rs and bylaws to ensure alignment with state laws.
- Maintain Transparency. Conduct regular audits of records and financial reports, and share updates with community members.
- Seek Legal Advice. Partner with a legal professional experienced in nonprofit and HOA laws to ensure your board makes sound decisions.
- Engage the Community. Keep HOA members informed about meetings, voting processes, and important decisions to foster trust and compliance.
While the NMNCA is not specific to HOAs, it provides important regulations relevant to how HOAs in Albuquerque are structured and operate.
Recent Changes and Amendments in New Mexico HOA Laws
Homeowners Associations (HOAs) in New Mexico have seen some significant shifts and changing regulatory trends in recent years. These updates and changes are a result from a lot of frustration that HOAs and homeowners within those HOAs were feeling around the lack of clarity and fairness in HOA governance and dispute management. Here are three specific recent updates you’ll want to be aware of:
| Current Status
There is a growing requirement for oversight on HOAs to ensure they are using fair and consistent practices when imposing fines on homeowners. Fines must directly relate to a homeowner’s violation of the governing documents, keeping the process transparent and reasonable. They cannot be arbitrary. If one homeowner is fined for a particular violation, the association cannot avoid penalizing other homeowners who are doing the same thing. |
| Amendments
Recent legislative amendments have worked on refining the powers granted to HOAs through their governing documents. Specifically, the amendments around the scope of an HOA’s authority regarding membership restrictions, parking enforcement, and color schemes for property exteriors have been clear topics of revision. |
| Alternative Dispute Resolution (ADR)
To reduce court back logs, there’s a trend towards integrating ADR methods within HOAs’ processes. This approach encourages dispute resolution through mediation or arbitration, which is typically faster and less costly than litigation. |
The legal landscape is evolving for HOAs and their members. It will help you and your entire association stay in compliance if you are up to date. When you cannot keep up with all the new laws and legislative trends that will impact your HOA, make sure you’re working with an Albuquerque property management team that can keep you in compliance.
Impactful Changes to New Mexico HOA Laws
For HOA boards in New Mexico, keeping up with legislative changes is a crucial part of ensuring compliance and fostering harmonious community management. Some of these recent updates to New Mexico HOA laws aim to improve transparency, accountability, and homeowner satisfaction. Understanding these changes is essential for HOA boards to protect their communities and fulfill their responsibilities effectively.
- Increased Transparency in HOA Operations
Transparency remains a focal point of New Mexico HOA laws. Recent legislation requires HOAs to provide greater access to records and ensure board activities are in clear view of association members.
What this means for your HOA: Homeowners now have improved access to meeting minutes, financial records, and governing documents. HOA boards must streamline their document-sharing processes and ensure compliance by maintaining organized, easily accessible records. Investing in secure, digital storage solutions can help make fulfilling these requirements seamless.
- Stricter Guidelines for Assessments and Fees
New regulations have placed stricter guidelines on how HOAs collect assessments, late fees, and penalties from homeowners.
What this means for your HOA: Boards must now adopt transparent practices for handling assessments and penalties, ensuring all billing aligns with community rules and state law. Clear communication with residents about fee structures and penalties has never been more important. Boards should review their collection policies and ensure they are both compliant and properly documented.
- Mandatory Reserve Studies
One of the most significant updates to New Mexico HOA laws requires boards to conduct regular reserve studies and maintain adequate reserve funds for major repairs and capital improvements.
What this means for your HOA: Boards must prioritize financial planning to avoid underfunding reserves. This law underscores the importance of HOA boards working with qualified financial consultants to assess and plan for future expenses. Adhering to this new requirement will help preserve property values and foster community trust.
- Enhanced Restrictions on Rule Enforcement
HOA boards must now exercise more caution in enforcing community rules, ensuring fairness and consistency. We talked about this earlier; you need to have an objective and consistent process in place or risk falling out of compliance.
What this means for your HOA: Any enforcement actions taken for rule violations must be clear, fair, and in full compliance with the law. Boards should make sure their enforcement procedures are well-documented and reflect impartiality. Additionally, proactive and open communication with homeowners about rules can reduce compliance issues before they arise.
- Limitations on Governing Document Amendments
New Mexico HOA laws have introduced tighter regulations regarding amendments to governing documents, including voting requirements.
What this means for your HOA: These laws emphasize resident participation in critical decisions. Boards must adhere to specific procedures when proposing and implementing changes. Open forums and voting processes should be well-communicated to ensure member engagement and legal compliance.
How HOA Boards Can Stay Up to Date
For HOA boards, understanding and complying with these updates is essential. Though the changes are designed to improve community management, the adjustments can sometimes feel overwhelming. Here are practical ways to stay ahead of the curve:
- Consult Legal Professionals. Partner with legal experts familiar with New Mexico HOA laws. They can provide tailored advice to help your community avoid costly compliance mistakes.
- Invest in Board Training. Make education a priority. Regular training for board members ensures everyone is aware of their legal obligations and best practices.
- Leverage HOA Management Software. Use technology to simplify record-keeping, enforce policies, and streamline operations. Digital tools help maintain transparency and compliance with minimal effort.
- Establish Open Communication Channels. Proactive communication with homeowners minimizes misunderstandings and fosters a sense of trust within the community.
Adapting to recent changes in New Mexico HOA laws requires HOAs to be proactive, organized, and committed to transparency. While these changes may introduce new responsibilities, they also offer an opportunity for HOA boards to build better, more engaged communities.
Partner with a professional HOA management team if you haven’t taken this important step already. We spend a lot of time and resources on continuing education so we can be sure we’re keeping the communities we manage in compliance with all relevant state, local, and federal laws. Whether it’s understanding the nuance of a particular court decision around HOA laws or helping you avoid a potential fair housing pitfall, we’re here to make sure you’re above board and moving forward. Contact us at Blue Door Realty. We provide residential management support as well as HOA management.
