Following

Review your MILs HOA agreement/contract.

Your MIL has the right to get a copy of the minutes and the budget from the HOA. At least it is that way here in my area. The first thing is to do as Jim Mat states above and then get a copy of the minutes and the "approval" of the special assessment. Once the documentation is gathered then follow the advice by kudzu9 :)

Google "Homeowner Association Law" and find lots of lnks to articles about your rights and also specific laws in various states that apply.

And your state's Attorney General would have information.

They are probably breaking all kinds of laws.

If you want to play REALLY dirty, report them to the IRS for possible tax evasion.

But keep in mind that people have ways of retaliating, too. Where I live, several years ago a single mom bought a townhouse here. Her son was in his last semester of high school in the next county, so she just kept quiet about the address change so that he could finish and graduate with his friends.

Then she voted on some HOA issue in a way the association didn't like, so they ratted her out and the poor kid had to change schools and go to school with total strangers for his last six weeks.

Whatever you decide to do, do not underestimate the pettiness that people are capable of, even if they aren't culpable of what you suspect.