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Do Fines Really Work?

In these pressing economic times, Board members are trying to do whatever it takes to save money. While this mindset is certainly prudent, Boards need to be careful about being “penny wise and pound foolish.” Clients regularly call and ask what they can do to stop owners from violating the association’s use restrictions. This inquiry is typically followed with a caveat that the Board cannot spend a lot of money on legal fees to procure compliance. In other words, get these people to comply with our rules but do it cheaply.  Hence, the fining process. Imposing fines may indeed be an inexpensive alternative to filing lawsuits or arbitration petitions but does it actually help in curing violations or deterring owners from violating the association’s use restrictions? First, associations cannot even consider this option unless the authority to impose fines is found within the governing documents (e.g declaration of condominium, declaration of restrictive covenants or the bylaws). If the board indeed has the power to impose fines, it must establish a separate (fining) committee. The committee must consist of at least 3 owners who are not board members, not related to board members and do not live in the same household as a board member. Then, before any fine may be imposed, the Board must provide the offending owner with reasonable advance notice (i.e. 14 days) of the date, time and location for the owner to appear before the fining committee. The offending owner must be given the opportunity to explain to the committee why a fine should not be levied. If the fining committee determines not to impose a fine, no fine may be imposed. The Board cannot overrule the fining committee and levy a fine where the committee votes not to impose a fine. Even if the committee votes to fine an offending owner, the fine cannot exceed $100.00 per day for a continuing violation and no fine in a condominium may exceed $1,000.00 for any single violation. Homeowners associations actually have the ability to levy fines in excess of $1,000.00 but may only do so if the specific fine amount is described within its governing documents. But, do fines really work? In both condominiums and homeowners associations, no fine (if unpaid) may become a lien against the owner’s home or unit. Therefore, if a unit owner fails to pay a fine, the association’s recourse to collect the fine would be to file a claim for damages in small claims court. Also, and perhaps most importantly, the imposition of a fine does not automatically cure the underlying violation. A fine does not force the owner to comply. Indeed, many owners would gladly pay a $1,000.00 fine in order to keep their dog or continue with that fourth-story addition on their home. Thus, while imposing fines may seem like an attractive and cost-effective solution, it does not guaranty an owner’s compliance with the association’s governing documents. If an owner refuses to abide by the rules, the Board’s only realistic option may be to file suit (or an arbitration petition as the case may be) and seek the entry of an injunction against the non-complying owner. If successful, the association is entitled to an award of its reasonable attorney’s fees and costs. Then, if such owner fails to comply, the judge may levy sanctions, hold the owner in contempt of court or ultimately issue a bench warrant for the owner’s arrest. So, does the fining process really work?

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  • Alan Fox
    September 13, 2009

    I contacted the board of my homeowner association concerning my neighbor whose house was appropriately labeled a “weed garden”. I’m told violation letters were sent and fines have been assessed.
    If a home in an hoa becomes an eyesore, and the homeowner refuses to comply, can the association go on pirvate property and tidy-up the place? Are there any other options?

    January 19, 2010

    Thank you for your article. There remains, I believe, an unanswered question regarding fines though I fully agree with your conclusions as to their efficacy.
    My Association has made the assumption that the independent committee is not required to vote when the offending member fails to respond to the 14 day notice. They believe the fine as set forth in our rules and regulations is automatically imposed.
    Your article clearly states what happens if the committee votes against the fine or for the fine. It leaves, I believe, unanswered whether the committee must vote in every case including where the Notice of Hearing is ignored.
    My reading of 720.305 2 (a) leads me to conclude that the Statute requires an affirmative vote of the committee in order to fine in every case and that such a vote is a condition precedent to the imposition of the fine. I am the only one taking that position.
    I am a long retired NY attorney and I have often been mistaken but here the Statute seems to state unequivocally that without an affirmative vote in every case there can be no fine. I find no difference set forth making an appearance by the member to be fined or a contest of that fine relevant to the requirement of the vote.
    Thanks for you excellent article and for any opinion you might wish to express.
    Harvey H. Shapiro
    Response: Thank you for your kind comments and your reasoned analysis. I am not aware of any caselaw specifically addressing this issue. There must be some action to impose the fine (whether by adopted resolution, board vote, etc.). In the event the owner (or person sought to be fined) does not take advantage of the opportunity for a hearing, there may be no need for committee review. However, I encourage associations to have committee review of all fines (regardless of whether there is a hearing), to improve its chances of collecting the fine. Its always better to be able to show you did engage in a ‘check and balance’, even if the homeowner ignored your efforts.

  • Fran Griner
    March 6, 2010

    If no committee hearing and no 14 day notice were given, can an association motion the court for a money judgment for attorney fees without filing a formal complaint and providing for due process rights of the member?
    Can an association motion the court to hold a member in contempt of court for not providing a list of all of their personal assets if a formal complaint has not been made against that member?

  • Michael Corbett
    April 15, 2010

    Dear Mr. Edwards,
    Interestingly, you response to the question “do fines work” appears to be absent. I conclude from you writing that you do not think fines are particularly effective in changing behavior.
    As you might imagine, most folks have found your article via an internet search for “do fines work”. Perhaps you can offer your opinion about the best way to change behavior of residents that violate rules and regulations.
    Michael Corbett
    Nashville, TN
    EDITOR RESPONSE: In Florida (under present law) fines cannot become liens against the unit or home. In the past when HOAs did have the power to lien, levying fines was an effective way to enforce compliance. Without lien power, I personally believe that the fining process still has some benefit (since there is the opportunity for hearing), but does not result in owner compliance the majority of the time. Nonetheless, the authority to levy fines is just one tool in the association’s arsenal of enforcement mechanisms.