Indiana House members overwhelmingly approved a bill authored by State Rep. David Cheatham, D-North Vernon, that would protect families against homeowners associations that fail to live up to contract responsibilities involving such areas as public safety, capital improvements and recreation.

By a 90-8 vote, representatives approved House Bill 1058, which puts the weight of the Indiana attorney general's office behind complaints about alleged criminal activity committed by a homeowners association or a member of the group's board of directors.

"If the attorney general finds that there has been a misappropriation of funds, some type of fraud or other criminal activity, the office has the right to bring legal action against the homeowners association itself or a specific board member," Cheatham said.

"If guilt is determined after an investigation, the court then will have the ability to issue an injunction, order restitution and even the removal of a board member," he said.

Cheatham said the legislation was inspired by recent incidents brought to his attention by constituents.

"The chief concern expressed by these residents is that some associations are not living up to the requirement of the contracts that were signed by homeowners," Cheatham said.

"Residents are paying dues for streets to be paved, snow to be plowed in the winter and security staffs to patrol the neighborhoods, only to find that no such work has been done, possibly because of the illegal diversion of funds," he said.

While such disputes normally are expected to be handled at the local level, Cheatham said it often is difficult for prosecutors to have the time and resources to pursue legal action. He said this leaves the cost of legal action to the individual homeowner who files suit. This costs the individual, plus it costs the homeowners association money to defend against the suit, which again costs the individual homeowner more money since the cost is partly covered by their dues to the association, he said.

"However, these are clear instances where some measure of fraud or other illegal activity has taken place, and it is entirely correct for homeowners to pursue whatever legal means are available to make things right," he said. "This legislation provides them with the means from an impartial government agency to get relief as part of consumer protection."

House Bill 1058 now moves to the Senate for consideration, where it will be sponsored by State Sens. Richard Bray, R-Martinsville, and Carlin Yoder, R-Middlebury.