Collecting fines is not impossible but it can be challenging. Most residents fall into four categories: (i) those who follow the rules, (ii) those who occasionally stray but immediately comply with a polite warning, (iii) those who chafe at rules but comply when fined (but may or may not pay the fine), and (iv) those who flout rules and ignore fines. Following are methods for collecting fines.
1. Suspend Privileges. Sometimes the best option is to suspend a person's privileges until the fines are paid. However, the association may need to amend its governing documents before implementing this strategy.
2. Small Claims Court. Associations can sue for fines in small claims court. The benefit is that there is very little expense involved and an abstract of judgment can be recorded against the owner's property.
3. Superior Court. If the fines are over $5,000, associations can file an action in superior court. If the association is awarded a judgment for the fines, an abstract of judgment can be recorded against the owner's property.
4. Judicial Foreclosure. Because the prohibition on fines in liens only applies to trustee sales, associations may include monetary penalties (fines) in actions for judicial foreclosures.
Nonjudicial Foreclosure. Fines cannot be collected through nonjudicial foreclosures (trustee sales) despite any authorizing language that might be contained in an association's governing documents. (Civ. Code §5725(b).) Monetary penalties cannot be treated as assessments and cannot be included in delinquent assessment liens that are foreclosed nonjudicially. Fines can be included in lines that will be foreclosed judicially.
Late Charges. Associations cannot levy late charges and interest on unpaid fines.
Recommendation: Fines must be reasonable and should not be viewed as a means of raising revenue but rather as a mechanism for encouraging compliance with rules.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.