Suspending Privileges to Enforce Rules
 

Who Can Be Suspended & Why. Common area privileges can be suspended for rule violations, provided due process is followed and the right to suspend is part of the association's published rules-enforcement policy. Associations may suspend a member's privileges for unpaid fees, fines, and assessments. If a unit or lot has multiple owners, suspending privileges for one owner applies to all owners and residents of that unit/lot. Associations can suspend a renter’s common area privileges if the owner is delinquent. When owners lease their units, they transfer their common area privileges to their tenants. (Liebler v. Point Loma) If the owner's privileges are suspended, the loss flows to the tenant.

Allowable Suspensions

• Cable TV. An association may suspend these services if it has a bulk contract with the cable company.
• Meeting Facilities. The association may suspend use of the clubhouse for functions unrelated to association elections.
• Committee Membership. The association may remove a delinquent owner from committees.
• Laundry Facilities. The service can be suspended if laundry machines are paid through owners' dues. However, if they are coin-operated, the service cannot be suspended.
• Miscellaneous. Receiving and sending calls through the association's switchboard (mostly highrise associations) can be suspended, as can signing for packages and deliveries (mostly associations with on-site staffing). The announcement of guests can be suspended (mostly in gated communities and highrises), i.e., guests can be turned away and told to contact the owner, who will meet them at the front gate or building entrance.
• Parking. Associations providing valet parking (mostly highrise associations) can suspend those privileges to delinquent owners, their families, and guests. Guest parking can also be suspended, so guests must find parking outside the development.
• Recreational Facilities. The association may suspend use of recreational facilities, such as the pool, gym, tennis courts, etc.

Disallowed Suspensions

• Elevators. Associations cannot suspend elevator service, as elevators are classified under landlord-tenant law as a utility. Moreover, if an elderly or medically challenged owner or guest is forced to walk up stairwells and has a heart attack, the association will likely be sued.
• Ingress/Egress. Associations cannot bar owners and guests from walking through the lobby. Owners have the right of ingress/egress.
• Meeting Attendance. The right to attend meetings is different from the right to use the swimming pool. Meeting attendance is a right conferred by the Davis-Stirling Act: "Any member may attend board meetings, except when the board adjourns to or meets solely in executive session." (Civ. Code § 4925(a)) 
• Meeting Facilities. Facilities during association elections cannot be suspended.
• Utilities. California's Supreme Court has determined that associations are, "for all practical purposes," a landlord. (Francis T v. Village Green) Under landlord-tenant law, landlords may not willfully cause, "directly or indirectly," the interruption or termination of utility service to a tenant's residence. Utilities covered include, but are not limited to, water, heat, light, electricity, telephone, gas, elevators, and refrigeration. (Civ. Code § 789.3) A judge could decide that trash collection qualifies as a "utility" and could not be withheld by the association.
• Voting Rights. As of January 1, 2020, a member's voting rights cannot be suspended. (Civ. Code § 5105(h)(1); a ballot cannot be denied to a member for any reason other than not being a member at the time when ballots are distributed.)

How to Collect Unpaid Fines
 

After holding a rules-enforcement hearing and levying fines that go unpaid, the following methods can be used to collect them.

• Suspend Privileges. Sometimes it may be appropriate to suspend a person’s privileges until the fines are paid.
• 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.
• Superior Court. If the fines are over the small claims court limits, associations can file an action in the superior court. If the association is awarded a judgment for the fines, an abstract of judgment can be recorded against the owner’s property.
• Judicial Foreclosure. Because the prohibition on fines in liens applies only to trustee sales, associations may include monetary penalties (fines) in actions for judicial foreclosure.
• Nonjudicial Foreclosure. Fines cannot be collected through nonjudicial foreclosures (trustee sales), despite any authorizing language 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 judicially foreclosed liens.

No Interest on Fines. Associations cannot charge interest on unpaid fines. Civil Code § 5725 prohibits an association from characterizing or treating a monetary penalty “imposed by the association as a disciplinary measure for the failure of a member to comply with the governing instruments, except for the late payments” as an assessment. As provided for in Civil Code § 5650(b)(3), "Interest on all sums imposed by this section, including the delinquent assessments, reasonable fees and costs of collection, and reasonable attorney’s fees, at an annual interest rate not to exceed 12 percent ..." Since a monetary penalty does not fall into any of the categories described above, associations cannot charge interest on fines.

No Late Charges on Unpaid Fines. When delinquent, homeowners sometimes pay the delinquent assessment but refuse to pay late charges. If they received fines for rule violations, they may refuse to pay those as well. When that occurs, associations cannot charge late fees and interest on unpaid late fees and fines. The Davis-Stirling Act provides for a late fee of 10% or ten dollars, whichever is greater (unless the CC&Rs specify a lesser amount), on delinquent assessments. (Civ. Code § 5650) That means late charges cannot be charged against unpaid late charges or fines.

Fines in Foreclosure Actions. Fines cannot be collected through nonjudicial foreclosures (trustee sales) despite any authorizing language contained in an association’s governing documents. (Civ. Code § 5725(b)) Monetary penalties cannot be treated as assessments or included in delinquent assessment liens that are foreclosed nonjudicially. Fines can be included in judicially foreclosed liens. Because the prohibition on fines in liens only applies to trustee sales, associations may include monetary penalties (fines) in actions for judicial foreclosures.

Fines Are Not Subject to FDCPA. Fines are nonconsensual and not consumer-related, as they arise from violations of the association’s internal rules. Accordingly, fines are not debt for purposes of the FDCPA. (Nabatmama v. Ross Morgan)

Recording a Notice of Violation is Not Allowed

At one time, associations could record a notice with the county recorder’s office whenever an owner violated the CC&Rs. Such recordings are no longer allowed. (Ward v. Superior Court)