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FINE POLICY

Associations are not required by law to impose monetary penalties on members who violate the governing documents. If they do, the fine schedule must be distributed to the membership.

Deterrence Effect
. Monetary penalties are intended to deter unwanted behavior. As a result, to be enforceable, boards must adopt reasonable fine schedules that are appropriate to the demographics of their association. For example, a $25 fine that may be significant to owners in one association may be pocket change to owners in another. If the fines are too low, they will be viewed by some as a fee for the right to break the rules.

Flexible. Fines should also be flexible enough to allow for a significant fine on the first violation rather than just a warning letter. Most associations have a fine policy that requires a warning letter on the first violation. This ties the board's hands if the directors need to discipline an owner who commits a serious violation as a first occurrence, such as endangering others. An owner who evacuates a building with a false fire alarm because he is angry at his neighbor's loud party, warrants a significant penalty rather than a simple warning letter.

Revised Policy. Unless an association's CC&Rs or bylaws require a warning on the first offense, boards of directors can adopt a fine policy similar to the following:

PENALTY SCHEDULE
1st Violation....................................warning or fine up to $200
2nd Violation (same offense).................................$50 to $200
3rd Violation (same offense)................................$100 to $300
Additional Violations (same offense).........................up to $400
Safety Violation...............................warning or fine up to $500
Continuing Violation.................................daily fines until cured
Suspension........common area privileges may also be suspended
Assessment...............may be levied to reimburse HOA expenses


If the CC&Rs or bylaws require a warning, they must first be amended by the membership before the board can adopt a more flexible fine policy related to warnings.

30-Day Review. Before adopting a fine policy, boards must send a draft to the membership for thirty days of review and comment. Once the policy has been adopted, notice must be given to the membership.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC