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Subject: FL Compliance Committee - Grounds for Rejecting a Fine
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BobB31
(Florida)

Posts:43


03/30/2019 3:44 AM  
Small self-managed single-family townhouse HOA
A new Compliance Procedure Policy (CPP) was adopted last year to bring us into compliance with FS 720.305. A Compliance Committee was created, but no fines were ever imposed and the committee never met. I volunteered to be on the committee this year (no experience with HOAs at all) and became the Chairman.

Assuming the committee is not intended to be a rubber stamp, I'm wondering what grounds or criteria would be used to reject a fine levied by the BOD. Per the statute and our CPP, the BOD has no authority to override our rejection, but I presume double jeopardy does not apply and the BOD could levy the fine again.
TimB4
(Virginia)

Posts:16257


03/30/2019 5:33 AM  
Bob,

Our Association, technically, has zero authority to fine (as determined by the VA courts) because our covenants specify a remedy for violations to be done through the courts.

That said, we will often use the threat of monetary penalties to get compliance.
Basically we say it will cost x amount per day unless the issue is resolved by mm/dd/yyyy.

This tends to get compliance for things that go to that level.

I would encourage your board to take that approach.
Other then that, you should base each case on it's own merits and mitigating circumstances.

BobB31
(Florida)

Posts:43


03/30/2019 6:23 AM  
Posted By TimB4 on 03/30/2019 5:33 AM
Bob,

Our Association, technically, has zero authority to fine (as determined by the VA courts) because our covenants specify a remedy for violations to be done through the courts.

That said, we will often use the threat of monetary penalties to get compliance.
Basically we say it will cost x amount per day unless the issue is resolved by mm/dd/yyyy.


So it's basically a toothless threat that the informed, defiant homeowners will simply ignore until the court summons appears ...
This tends to get compliance for things that go to that level.

I would encourage your board to take that approach.
Other then that, you should base each case on it's own merits and mitigating circumstances.




Hi Tim,
I don't think have the power to dictate the compliance strategy for our board, but thanks for the suggestion.

For architectural issues, our C&R already has a procedure for the HOA to hire a contractor to fix the problem and subsequently assess the homeowner for the required amount. So fines will likely be for behavioral issues: parking, pool rules, pets, etc.

So mitigating circumstances might include:
* Violation already corrected or in process of being corrected.
* Financial issues?
* Health problems preventing correction of problem? Should we require a plan from the homeowner to get the problem corrected?


MelissaP1
(Alabama)

Posts:7990


03/30/2019 6:25 AM  
Fines typically can't be used for the basis of liens/foreclosures. So they don't really hold a lot of teeth technically. Fines are NOT an income producing but punitive. There are other ways of punitive punishment than fines.

Our HOA had the right to fine. However, we did not have a "Fine schedule". Meaning what could be fined at what rate was not established. Having a Fine Schedule does give fines more teeth. That is because once the fines for this/that violation and/or rate is established/understood, then fines were able to be issued. Without a defined violation and rate established, it can cause many issues on follow up. Example: Leaving garbage cans out on street 2 days after pick up, that is 25 Dollars.

For us we never did fine. Instead our documents allowed us to fix the issue and send the owner the bill. If the owner did not pay that bill, then we could LIEN for that amount. Let's say person leaves garbage can out for 2 days. We tell the person to bring the can back in. If they don't, then we tell them we will do it at our cost and send them the bill. We pick the contractor and cost. If they don't pay that bill, then we can file a lien. A lien includes the legal expenses and the cost amount.

We never did have any issues establishing that approach once explained. Our HOA also did not have much money, so paying for fixing a violation in some cases may been out of reach. Usually people were compliant not to have to shell out the money.

Former HOA President
AugustinD


Posts:1498


03/30/2019 7:19 AM  
If the Board asked the Committee to approve a fine for a violation(s) --

-- by Member X while numerous other Members were also in violation, and it was clear the Board was selectively applying the covenants, this would be grounds not only for rejection by the Committee but also potentially by the Courts.

-- by a Member or Members, with said violation having existed for seven or so years, then the Committee might wish to consider rejecting the fine, pursuant to case law saying a covenant whose enforcement has been ignored many years becomes abandoned.

-- that is inconsistent with the governing documents, state statute or case law, the Committee might wish to reject the fine.

-- other.

In all of these instances, a brief letter explaining the reasoning of the Committee would be important. Perhaps in some instances the Committee may wish to request or recommend a consultation with the HOA attorney, for everyone's education.

While the statute is clear the Committee's decision may not be overturned by the Board, the Board can remove members of the Committee, replacing them with members who will do as the Board wishes. Then the HOA may have bigger problems. On the other hand, if the Committee ends up selectively enforcing, rejecting a fine for Member Y but upholding a fine for Member Z for the exact same violation, then I would want the Committee re-staffed.

I think typically one of the biggest problems such HOA enforcement entities face is a Board (or HOA manager) who plays favorites and who does not try to understand the governing documents and law. It's great that you are making this effort+. All such committees and the Board need to be able to say to HOA members: 'Here is where xyz is in the governing documents and state law. Show me where what you claim is in the governing documents or state law.'
BobB31
(Florida)

Posts:43


03/30/2019 7:59 AM  
Posted By AugustinD on 03/30/2019 7:19 AM
If the Board asked the Committee to approve a fine for a violation(s) --

-- by Member X while numerous other Members were also in violation, and it was clear the Board was selectively applying the covenants, this would be grounds not only for rejection by the Committee but also potentially by the Courts.


I assume the violator would have to bring this up. The committee can't be expected to know about the selective enforcement, can it?

-- by a Member or Members, with said violation having existed for seven or so years, then the Committee might wish to consider rejecting the fine, pursuant to case law saying a covenant whose enforcement has been ignored many years becomes abandoned.

Is "seven" the number mentioned in case law?Just wondering why you chose it.
Again,

-- that is inconsistent with the governing documents, state statute or case law, the Committee might wish to reject the fine.

-- other.

In all of these instances, a brief letter explaining the reasoning of the Committee would be important. Perhaps in some instances the Committee may wish to request or recommend a consultation with the HOA attorney, for everyone's education.

While the statute is clear the Committee's decision may not be overturned by the Board, the Board can remove members of the Committee, replacing them with members who will do as the Board wishes. Then the HOA may have bigger problems. On the other hand, if the Committee ends up selectively enforcing, rejecting a fine for Member Y but upholding a fine for Member Z for the exact same violation, then I would want the Committee re-staffed.

I think typically one of the biggest problems such HOA enforcement entities face is a Board (or HOA manager) who plays favorites and who does not try to understand the governing documents and law. It's great that you are making this effort+. All such committees and the Board need to be able to say to HOA members: 'Here is where xyz is in the governing documents and state law. Show me where what you claim is in the governing documents or state law.'



Thanks for your help.
TimB4
(Virginia)

Posts:16257


03/30/2019 8:21 AM  
Posted By BobB31 on 03/30/2019 6:23 AM
Posted By TimB4 on 03/30/2019 5:33 AM
Bob,

Our Association, technically, has zero authority to fine (as determined by the VA courts) because our covenants specify a remedy for violations to be done through the courts.


So it's basically a toothless threat that the informed, defiant homeowners will simply ignore until the court summons appears ...





True.

However, the reality is that most homeowners don't take the time to know the governing documents, applicable statutes or current case law.


Hi Tim,
I don't think have the power to dictate the compliance strategy for our board, but thanks for the suggestion.



Making a suggestion is different then dictating

BobB31
(Florida)

Posts:43


03/30/2019 8:22 AM  
Posted By TimB4 on 03/30/2019 8:21 AM

Making a suggestion is different then dictating




True
TimB4
(Virginia)

Posts:16257


03/30/2019 8:31 AM  
As an FYI:

Since many governing documents are boiler plates, it's possible that other States may rule that the Associations don't have power to impose monetary penalties.

Here is the thread to the VA cases that discussed the issue:

Subject: VA Associations, Do you still have the authority to use monetary penalties for violations?

The link to the Farran case is now a fee service.
However, at the end of the thread, there are links to attached pdf files for the ruling.



JohnC46
(South Carolina)

Posts:8195


03/30/2019 9:18 AM  
Bob

I say a Committee serves at the pleasure of the BOD. If a Committee went against a ruling by our BOD, we would probably fire the Committee Members in a New York Minute.

A committee makes recommendations to the BOD. It is up to the BOD how to handle. A BOD is elected to run the association, not some appointed committee.
AugustinD


Posts:1498


03/30/2019 9:29 AM  
Posted By TimB4 on 03/30/2019 8:31 AM
Since many governing documents are boiler plates, it's possible that other States may rule that the Associations don't have power to impose monetary penalties.


I do not see this in either the Zinone v. Lee Crossing HOA case; the Fairfax County Redevelopment and Housing Authority v. Shadowood Condominium Association, et al.; or Virginia Code 55-79.80:2 that you cited in the aforementioned thread.
AugustinD


Posts:1498


03/30/2019 9:39 AM  
Bob31, to respond to your questions:

-- I do not think who brings it up matters. Rather, I think the Committee should try to be "reasonable and fair," pursuant to the governing documents and law. The latter is the way one HOA attorney I know put it to a Board on which I served.

-- Until an instance of alleged selective enforcement is brought to the Committee's attention, I do not think the Committee has to research whether others are in violation whilst the Board is not imposing a fine on these others.

-- Seven years of ignoring a violation, dictating the HOA not trying to remedy the violation and so leaving the 'violator' alone, was the figure a HOA attorney where I live cited for my state. I am not Florida. From a lot of reading about case law, and depending on the state, I figure the 'grandfathering' rule will be on the order of five to 15 years.


TimB4
(Virginia)

Posts:16257


03/30/2019 9:43 AM  
Augustin,

The Zinone and Shadowood cases are basis for the ruling in the Farran Case.

The issue, as pointed out in the other thread, if the governing documents specify how to enforce then all other enforcement are beyond the boards authority.


The ruling is only valid in Virginia.
Courts in other States may or may not give the ruling any weight.

Heck, within VA, there are disagreement over the interpretation of VA Code at the County level.

I'm not an attorney.
I started that thread several years ago.
The Association in the Farrans case declared bankruptcy and went under receivership for awhile to pay for the legal fees.
Basically, the thread is a warning to those in other States and a plea for board members in VA Associations to review their documents and procedures on compliance enforcement.
AugustinD


Posts:1498


03/30/2019 10:56 AM  
Posted By TimB4 on 03/30/2019 9:43 AM
The issue, as pointed out in the other thread, if the governing documents specify how to enforce then all other enforcement are beyond the boards authority. The ruling is only valid in Virginia. Courts in other States may or may not give the ruling any weight.
[snip for brevity]
The Association in the Farrans case declared bankruptcy and went under receivership for awhile to pay for the legal fees.


The Declaration in the Farran case states: "... Article XIII, § 3 of the Declaration only provides for enforcement actions "by any proceeding at law or in equity." "

I think the Farran decision makes sense. I expect courts nationwide would rule the same on the point. I agree HOA and condo Boards should check to see whether their Declarations allow monetary fines before creating a schedule of fines et cetera or fighting any member who objects to a fine. My condo's 2001 Declaration explicitly states monetary fines may be imposed.
JohnC46
(South Carolina)

Posts:8195


03/30/2019 11:41 AM  
Our docs allow for fines. We published a fine schedule which is basically $25.00 per violation and the fine doubles every 30 days the violation exists. Also once fined for a violation, if the violation occurs again, no matter when, the fine doubles.

We do not want to fine. We simply want violations corrected. The first violation notice is a courtesy letter explaining the violation and asking them to correct it.

We recently granted some extensions as the result of a seasonal issue having to do with laying sod.
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