ENFORCING RULES AND IMPOSING FINES IN COMMUNITY ASSOCIATIONS [3-20-15]
ENFORCING RULES AND IMPOSING FINES IN COMMUNITY ASSOCIATIONS
Bakalar & Associates, PA
By Ronald Scott Kaniuk, Esq.
Florida law allows both homeowner and condominium associations to imposing fines against members, tenants, guests and invitees who violate the community’s declaration, articles of incorporation, bylaws or any rules adopted by the association.
The ability to levy fines for violations is a valuable enforcement tool. The relevant procedures for imposing fines and suspending the rights of members are set forth in Section 718.303 (Condominiums) and Section 720.305 (Homeowners Associations). While the numbering of the relevant statutes is different, the procedures are nearly identical, except as noted herein.
For both HOAs and condominiums, fines may not exceed $100 per violation, and the fines may be imposed for each day that the violation continues, with a statutory cap that the fines cannot exceed $1,000 per violation.
It is important that the association establish a uniform procedure for the imposition of such fines, or else it will be at risk should the offending homeowner sue based on inconsistent treatment; the results could be significant litigation exposure rendering the fines uncollectable.
We recommend taking two immediate actions to put your association in a position to impose fines for violations of the governing documents.
The FIRST ACTION is to establish an Enforcement Committee. We recommend doing this now, rather than on the fly when a violation might occur. Doing so in advance ensures that there are set policies and procedures; doing so in a rush may result in a process which is inherently unfair and may be cause for challenging the process and the resulting fines imposed by the committee. The Enforcement Committee should be comprised of three or more members (always use an odd number of 3 or 5 to avoid tie votes) who are not Board Members or anyone related to or residing with a Board Member (to ensure impartiality).
The SECOND ACTION is to ensure all homeowners have access to the governing documents and rules that will be enforced by the Enforcement Committee. You may want to post the documents on an internal association website, or distribute them via mail to all existing homeowners. When new homeowners purchase a property, they can sign a document at closing which affirms their receipt of all the relevant documents, and any newly-enacted amendments or rules can subsequently be distributed to all members.
Having established an Enforcement Committee and distributed the relevant rules to all homeowners, you will be in a better position to enforce the rules should there be a violation. In the event of a violation, you can seek to impose a fine by following these Four (4) steps.
The FIRST STEP is to notify the homeowner of the violation. This initial notice should be sent to the homeowner at the property address and to all other known addresses and should contain the following information: (A) describe the violation (if there is more than one provide an itemized list); (B) set forth authority for imposition of a fine for the violation; (C) provide a timeframe for correcting the violation. You may also want to include pictures to document the violation. If the violation is corrected, then the process ends here.
If the violation is not corrected, then you should proceed to the SECOND STEP, which is to send a formal notice of violation via Certified Mail (with postage costs charged to the homeowner) that the violation still exists. This Notice should repeat all the information contained in the first letter, namely: (A) describing of the violation; (B) setting forth authority for imposition of a fine for the violation; (C) providing a timeframe for correcting the violation. However, in this case, you should provide a very short window of time (3-5 business days) to correct the violation and advise that if the violation is not corrected, the matter will be referred to the Enforcement Committee to consider whether or not to impose a fine. This letter can include a date, time and location for the hearing to be held by the Enforcement Committee—you must provide at least fourteen (14) days notice of the hearing. The letter should contain the amount of the fine and a warning that other expenses for non-compliance may apply. If the violation is corrected, then the process ends here.
If the violation is not corrected, then you should proceed to the THIRD STEP, which is a hearing before the Enforcement Committee for them to consider whether or not to impose the fine. The Enforcement Committee should follow Robert’s Rules of Order and take minutes of the meeting. The Property Manager should make the initial presentation regarding the alleged violation, copies of the notice(s) provided to the homeowner, and information regarding continued non-compliance. If the Homeowner is present, they should be permitted to offer a rebuttal, contesting the existence of the alleged violation, arguing whether or not proper notice was provided, and/or arguing if the alleged violation was corrected. The Enforcement Committee should listen to both presentations, and ask follow-up questions if necessary. After both sides have concluded and the Enforcement Committee has finished asking any questions, then the Enforcement Committee should meet in private session (taking minutes of their discussion) and decide whether or not to impose the fine. The decision of the Enforcement Committee should be conveyed to the Homeowner via Certified Mail (with postage costs charged to the homeowner) setting forth the amount of the fine and asking that the violation be remedied.
The FOURTH STEP will be for the fine to be assessed against the Homeowner’s account and billed along with maintenance fees and other charges. It is important to remember than in condominiums, fines can never become liens against the unit, and in homeowner associations, fines of less than $1,000.00 cannot become liens. Fines cannot exceed more than $1,000.00 per occurrence, so if the underlying violation is not corrected by the homeowner, and the fine reaches $1,000.00 for the initial violation, then the homeowners association should consider whether or not to seek to seek to collect the fines in the same manner as one would seek to collect delinquent maintenance (i.e., commencing collection activity by sending a demand letter followed by notice of intent to file a claim of lien and either a condominium or homeowner association should re-start the process by citing the homeowner for a new violation (Starting at the First Step and repeating the process as necessary).
It is important to remember the following caveats when creating an Enforcement Committee and seeking to impose fines for violations:
- The Enforcement Committee should provide a written report of their actions and recommendations to the Board of Directors.
- The entire process is designed to gain compliance with the rules, and is not designed to be punitive in nature; therefore, compliance is the preferred outcome.
- Retroactive fines are not allowed. If there was a violation—since corrected—and no notice was given, the homeowner cannot be assessed a fine.
 For purposes of the remainder of this memo, it is assumed that there is only one (1) violation at issue. If there is more than one violation, then each violation should be specifically discussed and described in any correspondence.
The process of imposing violations and fines can be intimidating and must be done properly. For assistance, please contact our office at 954-475-4244