Due Process. If an association imposes penalties on members who violate the governing documents, it must first adopt and distribute to the membership a fine policy. The first element of the policy must include due process, i.e., giving members notice of the rules and individuals notice of violations and a hearing before the board with an opportunity to defend themselves against an alleged violation. A fine policy cannot include the following:
No Automatic Fines. If an owner is fined for a violation one month, then repeats the violation the following month, boards cannot immediately levy another fine. Another hearing must be held for the new violation. The person gets an opportunity to contest each alleged violation. The exception is continuing violations where continuing fines are levied until the violation is cured.
No Group Fines. If the board cannot determine which dog owner is not cleaning up after their dog, the board cannot levy a fine against all dog owners until someone confesses. Other steps must be taken to determine the identity of the violator.
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:
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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.
Membership Review. Before adopting a fine policy, boards must send a draft to the membership for 28 days of review and comment. Once the policy has been adopted, notice must be given to the membership.
Enforcement Menu. For more information see Rules Enforcement Menu.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.