No fining allowed for infractions

167 Unit Townhomes in a Corporate Private Community. Thirty years old and from what we can tell the past Boards of Directors along with the different management companies have strictly enforced our Covenants.
We are in the process of filing a law suit against the state of Maryland and we invited ($275.00 an hr)our attorney to attend our BOD Meeting last week to have him bring us up to date.
While he was there we asked about another topic, one dealing with a homeowner who was denied twice in their application to build a fence beyond the allowed height of the Association. They built it anyway, and I ask about using the fining process which starts at $25.00 and goes as high as $250.00.
Everyone was shocked when he said we cannot fine a homeowner for "any" violation on their own property. As long as we have been incorporated we can go back in the records and see where homeowners were fined quite frequently. He went on to tell us it would have been illegal, and the only way we can go is to take the homeowner to court. (Cannot fine)
To be as brief as possible he said The powers of the board shall be to adopt and publish rules and regulations governing the use of the common area and facilities, and the personal conduct of the members and their guests thereon, and to establish penalities for the infraction thereof. HERE IS THE BIG BUT: Because the wording of the guidelines stop at common areas and facilities they do not continue on with the words which should include the residences, we will have to file an amendment which requires 75%.
Are any of the guidelines of the communities you represent worded the same? Now we have to ask why even do Arc Inspections.
This opinion by the attorney is a huge blow to our ability of maintaining the properties.

Thanks for the read:

Jim

You mean people are free to do what they want with their property? This is unacceptable. You should immediately pass a rule, with 100% acceptance, allowing the HOA to fine and possibly foreclose for growing your grass 1" over acceptable limits or painting your house an unauthorized color. This will keep property prices high. (wink)

Steve:
Don't fully understand the need for your criticism. If you are a member of the board where you live and are under the governance of an HOA you certainly have the responsibility to enforce your covenants.
IF you have 167 homeowners going in 167 different directions undertaking 167 different projects then, you might as well disband the HOA. Unfortunately we cannot, so we MUST maintain the standards set down in our CC&R's.
Our current Board of Directors cannot change the actions of the past boards and since their actions have managed to keep our community stable, we do not plan on ignoring the way we will have to address the violations.
People are free to do what they want with "their" property if they do not buy into a community governed by an HOA, and they always have the option to move into an area where they might get away with painting their house any color they wish. (can't do it in ours)
Plus "their" property is located within the bounds of the Private Property of the Association.

Jim

Just because I'm a board member, doesn't mean I like HOA's. I think they are ridiculous. But I live in one, help out, and try to make the best of it. I serve so the HOA nazi's dont take over and fine people for 1" overgrown grass. I make rational decisions and people trust me to keep the HOA out of lawsuits while still maintaining the CCRs. As long as I have going for me I will continue to be re-elected and sleep at night not worrying about special assessments due to legal fees.



Every HOA is different. Some can enforce, some cannot. Some can fine, some cannot. Every one is unique and what applies to one does not mean it applies to others. True, you are governed by your CCR's whatever they might say.

This is typical of HOA's. They make up rules with little resources for enforcement. Mostly they can lien or foreclose. However, liens and foreclosures are for unpaid dues/special assessments than for fines. Matter of fact, many states don't allow foreclosure to be based on fines. You have to check out that aspect in respect for your state laws.

Your options aren't for naught just because you can't levy fines. The option with the fence is to remove it at the owner's expense. That means IF the owner does NOT co-operate in removing the violation (in this case the fence)the HOA can pay a contractor to remove the fence and send the owner the bill. IF the owner does NOT pay that bill, the HOA has the right to issue a LIEN against that owner for that payment.

So your HOA is not without "teeth" because it can't fine. You just have to use the tools (lien/foreclosure) in the correct context. I would then do the long process of updating your CC&R's, by-laws, and Articles of Incorporation for the future. It's always good to update these every 5 years or so anyways. Just make sure you have a lawyer familiar with corporate/contractual laws...

Thanks for the confirmation Larry.

Your not dealing with the "real world" in a HOA. The HOA's goal is to maintain the perception of good home values. Which means they have the right to enforce their rules in regards to aesthetic or other physical issues that effect that perception.

Here's my example: Your neighbor puts in an "outhouse" in their front yard in your HOA. The rules state there are to be no outdoor structures. Which for this example is the "outhouse". The HOA can and DOES have the right to go to your neighbor and request they remove the structure. If the owner doesn't remove it, the HOA can then pay someone to come in and remove the "outhouse". The HOA then can send the owner the bill for the removal. If not paid, then that is when the HOA can lien the owner for that bill plus legal costs. It wouldn't be against the law since the HOA has it's own set of laws.

Now if an owner in a NON-HOA put up an outhouse in their front yard, that too can legally be removed. However, the process is much longer and requires the City/County to step in. The city has a nuisance law that this could fall under similar to what the HOA has. Since HOA's are run by the owners and NOT the city, it's the owners that can enforce their own law (CC&R's).

This is the sales pitch most of us got when we chose to live in a HOA. If an owner doesn't keep their property within certain guidelines, then enforcement can happen according to what the owner's decide and the rules state.

Just because you don't like the idea the HOA can come in and clean up a violation, doesn't mean they don't have the right to. How else do they listen to your complaints and fix issues if you get upset about legal actions that are legal?

Unless your documents specifically give you the authority to go onto someone's property and take something down you don't automatically have that right. Furthermore, anyone or any HOA that does so without a court order is in my humble opinion not very bright.

James said, the development is 30 years old and I keep wondering if the subdivision plat accurately shows the property boundaries or, if the property was recently surveyed to determine if the fences are really on the owners’ lots. In townhouse developments it is not always clear.

Be careful with pursuing lawsuits as an HOA. The lawyer will advise you this route of course as it makes them money. They don't disclose all your options to you. It's like going to a mechanic and telling them to replace your brakes because they squeek. Sure they will replace your brakes but the problem may be your rotors. They aren't going to tell you that. You have to know the right questions to ask and do some homework on your options.

A lawsuit in general isn't a good thing for a HOA to use. The result still is going to be a "judgement". It's just that judgement doesn't equal money nor does it mean compliance. The gavel doesn't drop and you get the money/results. A judgement can stay against a person for 7 years and then has to be renewed. Mind you I said PERSON and NOT the property. This means your HOA can sue and win but the owner can sell the property. Which how is the HOA going to collect now? 7 years from now is the BOD going to remember there's a judgement out there to collect on or to renew?

Another issue with suing is that it uses the HOA's money. YOUR money. Are you and the other members okay with using their money to pay legal fees? A HOA is ONLY funded by it's owners for it's owners. The BOD can pay the lawyer but they have to disclose it to the membership what they are doing and why.

Ironically, if your HOA is going to involve itself in a lawsuit, it's best to be countersued than be the one to file. The cost is much less to countersue and the amount can be for your HOA's own issues. This sounds counter-intuitive but living under the threat of being sued all the time, it's the best attitude to adopt. You want to sue? Go for it. 95% it's an empty threat and your HOA has wasted more money/energy in the fear of a suit.

I take the approach that a lien/removal is best. It's like sellng someone a car and they don't pay the payments. They then also paint and decorate the car without approval. As the official owner of that car, you have the right to file a lien against that car or repo the car. That lien can also include covering the costs of returning the car back to the original condition. Just take the car out of this equation and this is what the whole "Remove the fence and lien the owner" advice is all about. Ask your lawyer about that option and see what you get...

Petunka:

Our Architectural Guidelines are specific in the types of fences permitted in the community. There are many "restrictions". No perimeter fence shall exceed four (4) feet in height as measured from the highest point of the property grade within the fence enclosure. No applications will be accepted for chain link fences.
No privacy fences (ones not able to be looked through from the outside)All wood fences must be earth tone in color. Fences made of composite wood and plastic lumber options such as Trex, etc. must be natural earth tone in color. (No White) Plus caps are not permitted on the tops of fence posts.

This homeowner ask for a special exception on their first application because they have a large dog and they need a higher fence. They also ask for a special exception to have a privacy fence because their dog was able to see children passing by, and it would often upset the dog. (DENIED)
Then they applied for a higher fence, but not to have a privacy fence. (DENIED)
Applications were denied twice by the Architectural Committee. They appealed to the BOD which upheld the denial.

They proceeded to build the fence and it is a foot and a half higher then what is permitted by the guidelines, and they have put caps on the tops of the post.

The guidelines have been in place and adhered to for the past thirty years. Long before I moved into the community, but because the community was governed by an HOA is the reason I purchased my home here.
The BOD does not have the authority to grant special exceptions to individual homeowners and when this was explained to them at the meeting they stormed out.

Jim

James,

Good heavens! Okay, here in Washington state, according to HOA Act RCW 64.38. Chapter 020, Association Powers, you can do the following:
1) adopt and amend bylaws, rules and regulations
2) impose and collect assessments for common expenses
3) impose and collect charges for late payment of assessments
4) impose and collect reasonable fines for any violation of the bylaws, rules and regulations of the association.

So, we were able to establish a violation fine structure for both the personal property interest rules and regulations (garbage, fences, paint, etc...) outlined in the CC&R's, as well as association interests rules and regulations (annual dues, special assessments, Reserve Funds etc. . .)outlined in our Bylaws, as well as our Resolutions which support the intent of both.

If all of our efforts prove for naught, then yep, gotta "proceed by law or in equity."

For the record, when I became President, we did not have any enforcement procedures in place or on the books, except the lien option, which was at least for ANY VIOLATION of ALL COVENANTS. We did have the authority to assess late fees for delinquent dues,according to our Bylaws, but there was also nothing formalized for this either. Calling my local representative in his state office confirmed my reading of the above statute. I cannot believe that any organization would have rules governing personal property and then make it so prohibitive for the governing body to enforce them. I also question this attorney's knowledge of your state homeowners association law. We have a lawyer in the 'hood who routinely shocks me with not only her lack of legal comprehension, but the absence of even curiosity, as in, "This can't be right."

Our Bylaws read, "The Board is empowered to adopt, amend, and revoke on behalf of the Association detailed administrative rules and regulations necessary or convenient from time to time to ensure compliance with the general guidelines of the Declarations of Covenants, Conditions and Restrictions, and to promote the comfortable use and enjoyment of the subdivision." Surely, your Board has this power. And since you are not changing the intent of the CC&R's a whit, but only supporting the clear intent that these are the rules to be enforced regarding what you do on your personal property, then wouldn't the more civil way to accomplish this be to NOT put lien on someone's property?

One last thing, I promise. These homeowners are counting on no one suing them to take that unapproved fence down. We did just that when a homeowner brought a crane in, lowered a huge garden shed, after she was told was not permitted according to the very clear CC&R's. She refused to take it down. We had to sue her. We won. She countersued. She lost. A lien went on the property. She still didn't remove the shed. We got the authority to go on the property without trespass and remove the shed with a crane, which we did. She finally moved, shed free and a helluva lot poorer for it, for she was responsible for all damages. It was a horrible, nasty, completely unnecessary situation. But we could not let her keep that shed in her back yard. If you ignore one covenant, you ignore them all, and all become meaningless

Enforce or amend. You will always have someone who will make this simple creed as complicated as can possible be.

I'm done.

Dorothy

Jim,

I do feel sorry for you. Your Board is probably in for a rough ride.

I suspect for this instance of the fence you would probably have to go to court anyway. I offer one word of caution - make sure the complaint is for violation of the CC&Rs and not of the Guidelines.

The Guidelines are for the Architectural Committee (or approving authority)to use when considering a request. The CC&Rs (typically) require that they get permission prior to building. Therefore, the member is in violation of the CC&Rs for failing to get this permission. In my opinion,it's irrelevant that the fence doesn't comply with the guidelines (at least for the purpose of enforcement).

The fact that they submitted plans in the past would be evidence that they knew of this requirement and when they were denied, they chose to violate the CC&Rs by refusing to get prior approval and built the fence anyway.

AS for trying to amend the CC&Rs to allow fineing, you might want to use the argument that if legal action is the only remedy, that assessments will need to increase for everyone to cover the expected increase for legal expenses (as the Association needs to initially cover the legal costs associated with enforcement). However, if they allow fines/charges for non-compliance, there probably wouldn't be a need to increase the budget for legal expenses (based on past results of enforcing non-compliance with fines).

Tim

"but why would someone want to go through something so costly and gain nothing?. "

Probably because they thought the Association wouldn't go the legal route or they truly didn't understand what they were purchasing into and thought they were in the right.

There are 4 types of people in this world:

1. The type of people that know the rules, follow them to a T and always do the right thing and pay their bills on time.

2. There are folks who generally are good people, mainly follow the rules and usually pay on time...however, they every so often need a letter or notice reminding them that they have done something wrong and to correct it and they do.

3. Then there are folks who fly by the seat of their pants, they need a little more than a letter, they need a threat of a fine, threat of lien, having late fees put on their account and some badgering but ultimately they will back down and will conform and follow the rules.

4. Finally you have those who are going to do whatever they want whenever they want, their only remedy is usually legal action.

How many folks fall into this category who knows, but my point is that every step along the way is important and has a purpose and every step will get some people to conform. Ultimately if you do it long enough you will have a situation where court is inevitable.

Dorothy:

Curious about "garbage can" violator. Is it because they are not removing it from the common area after trash pick up or what?
Our trash cans have to be kept in the rear of the home until the evening of the the day before scheduled trash collection and taken in the evening of the day of pick up.
My post on the inability to fine, we are facing now would even be if we can control where homeowners have to store their trash cans.
We can clearly fine for things dealing with the common areas, but since our recent notification from the attorney that our docs do not mention the "homeowners property" everything is left hanging.

Can you say what the garbage can issue is about?

Thanks:

Jim

Jim,
Our CC&R's state: "Garbage, Thrash, Weeds, Nuisance: Garbage receptacles and
trash cans shall be sanitary and in complete conformity with
municipal sanitary rules and regulations and shall be concealed by
screening or shrubbery acceptable to the Residential Committee.

In the event that any owner of any property in "XXXXXX"
shall fail or refuse to keep such premises free from weeds,
underbrush, refuse piles, trash, garbage, waste, or other unsightly
objects or growths, the Residential Committee, or its delegate may
enter upon such lands and remove the same at the expense of the fee
owner or occupant and such entry shall not be deemed a trespass."

The municipal rules and regulations require trash cans to be brought off the city street/sidewalk by 6:00 p.m. day of pickup. The operative word in this covenant is "concealed." So, screening could be stored in the garage, behind a fence, behind some shrubbery, all of which must successfully conceal and screen the receptacles from view.

What this homeowner has done is leave it on the street, or in his driveway, or on the side of his house for days and sometimes weeks. We are a 42-home development, established in 1992, developer long gone, long-time residents, with 99.9% always in compliance. When I came on Board in 2007, I learned that this had been going on for some time. But I also learned we had no enforcement policy, other than the lien, in place either. So, before we could address this issue, we had to develop an enforcement policy with a fee structure for violation fines. Our Bylaws allowed us to do this. Once we did, we were then able to approach this homeowner with the necessary authority, that wasn't so draconian as a lien.

I find the allowance to enter the property and just move the damn thing without trespass dramatic! Wouldn't do it though. Definitely would not do it!

Have you thought about getting a second attorney's read of your governing documents?

Dorothy

Larry,

The language in Jim's CC&Rs is the same as mine. The lawyer informed Jims Association that the HOA did not have legal authority to "fine" a member to enforce the covenants. This is because the CC&Rs specified that the method of enforcement was only through the courts by using the phrase: "by any proceeding at law or in equity."

Jim's HOA is able to regulate the private property (as all HOA's typically can) because the CC&Rs require prior approval for exterior changes. The member of Jim's Association installed a fence without prior approval - therefore they are in violation of his CC&Rs.

Requiring prior approval for the Association is how Associations may regulate private property.

I stopped posting on this topic, because I thought it had run its course. Can't let Tim, get slammed for giving me good advice.

What Jim (me) said was, since the previous boards of the past had "ALWAYS FINED" a homeowner for failure to make the necessary improvements to come into compliance with the guidelines, we were shocked when the attorney said we could not "FINE" anyone for the infractions concerning their own property because of the wording not being specific.
One of our board members said "Hell" I'll go home and paint my shutters purple. He said you actually could, but you would be sued.

He then said the Association, or any owner, shall have the right to enforce, by any PROCEEDING AT LAW OR IN EQUITY, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration.

So just because our documents stop at common, and recreational areas and omits mentioning the homes and its property we can STILL take legal action to force them to meet the standards. CANNOT MONETARILY FINE THEM, but can take them to court.

Hope that helps.

Jim

Jim, etal....it ain't run its course yet! I need help! I have spent the last couple of days going over my documents. They say basically the same as yours.
My declarations state Remedies: "may proceed at law or in equity to prevent the occurence....."
It further states that all members have the "use and enjoyment of common areas and improvements thereon shall be subject to the provisions hereof and to reasonable rules and regulations from time to time adopted by the association"
Under Assessments and liens it states:
The association is also authorized to levy and collect special assessments against any owner, other than declarant, upon a finding by the committee (ARC) subject to an appeal to the board, which appeal shall be final, that such owner has violated any of the covenants contained in Article IV hereof. Now here is the part I don't understand: "Rules and regulations as to procedures for the filing of complaints,notice and hearing, before the committee in connection with adjudication of any such violations and the amounts and procedures applicable to any such fines or penalties shall be adopted by time to time by the board."

After reading all of the above, I would greatly appreciate your interpretation of the last section regaring "any such fines or penalties"......

This has really been an eye opener for me. This is my 3rd time on our bod (total 9 years) and I have never read/interpreted the declarations as you guys have.

Thanks,
Barb

Barbara,

I'd have to read more of the document to offer an opinion.

Barbara:

I visited your web site and the language in your documents are basically the same as ours. I believe Tim, said his were similiar.
As in yours, ours uses the words "legal action" when dealing with the enforcement of the Architectural Guidelines.

Putting everything aside referenceing common, and recreational areas (we have the authority to "fine" homeowners in these areas) but my concern is the inability to have homeowners maintain their home and property in a manner so as not to decrease the property value of the entire community.

My original post was meant to have community representatives read their CC&R'S to see if the language is the same. (The inability to "FINE" a homeowner who is not maintaining their property per the guidelines.) In the past we have conducted the annual property inspections, sent the first letter, then the second letter and would finally call them to appear before the Board of Directors for a hearing.
This process has always worked, because once a homeowner received a violation letter the matter was taken care of.
Now on the advice of counsel we can no longer use the "fining" process because of the wording being left out about homes, and property.

We were in the process of updating the Architectural Guidelines, but since receiving this news, we have suspended any further considerations. Why work on something you have no authority to enforce?

I WOULD LOVE TO KNOW HOW YOUR ATTORNEY CAN LET YOU USE THE FINING PROCESS:::
Our atty said we are allowed to institute fines and we have a fine policy that has been published to the members and been in existence for years.

Thanks:

Jim

Dorothy: Addressing your feed back concerning #2 and #3 above. I DID "NOT" say our attorney told us we are allowed to institute fines. Reference the post below from BarbaraP3. HER attorney said they were allowed to institute fines and have a fine policy. I told her I would love to know how her attorney could let them use the fining process and repeated "HER" wording saying "they" are allowed to institute fines. Your #3 should be answered by my explanation concerning #2. Please see her post below. Hope this adds up.
Thanks:
Jim

Posted By BarbaraP3 on 10/04/2011 7:40 PM
Tim and Dorothy,

Our atty said we are allowed to institute fines and we have a fine policy that has been published to the members and been in existence for years.
In both documents the only place I see the word "fine" is in the declarations under assessments and liens. Note that we are a HOA and each member purchased their property and hold a deed to the property.

Jim, I too would like to know how our atty states we can fine.....basically for everything. If a kid is not wearing a helmet, we can fine him/parents; ball playing in the street; all the way up to a gross ARC/ECC violations!
I am so totally confused with my documents that state "proceed at law or in equity" for the violations of the declarations, but then goes on to say (under special assessment and liens) that we can levy a special assessment on an owner that has violated any of the covenants contained in Article IV. Article IV does state some of the requirements for "improvements on the lots", setbacks, size/type of shed, maintenance of site, trash disposal, fences, clotheslines, nuisances, signs, animals, open fires, guns, picnice tables and accessories, no tents, no tree houses, tree removal, ditches/swales, vehicle parking, abandoned vehicles, use of roads, guests, intoxicating beverages, TV antennae. Following is the only section statement pertaining to houses/units...."Shall be mainained in such a manner as to prevent them for becoming unsightly, unsanitary or a hazard to health or safety.".
I know our attorney reviewed these R&R's because he made the recommendation on many of the R&R's to change the word "must" to "shall", which we did.
I'm still foggy and not clear. Thanks for taking the time to review our documents. It would be great if we could actually "talk" this out between ourselves.

Barb

Christina,
Sometimes the wording in the Enforcement Section of CC&R's is so ungainly, but in fact, in combination with what your Bylaws allow (and ours), does provide for the "assessing" of fines for ANY covenant violation, not just annual dues. The last section of our CC&R's, "Enforcement" reads: "For a violation or breach of any of these Reservations and Restrictions by any person, the Residential Committee [since renamed Architectural Review Committee], the owner of a lot in the subdivision, or the Homeowners Association, or any of them, jointly or severally, shall have the right to proceed at law or in equity to collect damages or to compel a compliance with the terms hereof or to prevent the violation or breach of any covenant herein."

So, through the Bylaws we can "adopt the rules and regulations etc. for the administration and enforcement of the CC&R's," as in assessing fees for violations, and through the CC&R's proceed at law or in equity to collect these "assessments" or compel a compliance through the lien process. An assessment is an assessment is an assessment whether it was assessed for delinquent dues or any other covenant violation. Interestingly enough, the annual dues assessment is not even in the C&R's, but the Bylaws.

Our Bylaws also have a nifty clause, after all the normal late charges, interest charges, etc., that says: "The remedies provided herein are cumulative and the Board may pursue them, and any other remedies which may be available under the law although not expressed herein, either concurrently or in any order." I especially like the, "although not expressed herein" part.

Finally, I called our State Attorney's office and asked him specifically if we were allowed to assess and collect damages from assessments other than annual dues. He said we were. I know some states don't allow that.

But somewhere in your governing documents you are allowed to file liens right?

Dorothy