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Forums > Homeowner Association > HOA Discussions
Subject: Defining fine amounts in CC&Rs
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TinoS
(California)

Posts:69
08/26/2010 6:55 AM  
As I have mentioned in another topic we are considering amending or possibly rewriting our CC&Rs.

From my reading here on this very good forum I came across some mention about penalty fines in regards to liens. I can't remember which posting it was but it sort of implied this:

(By the way I am in California) If the amounts of the penalty fines are not set in the CC&R then courts will not place liens on the property based on the non-payment of those penalty fines. If that is a general legal principle, that principle would make sense to me (not a lawyer) because it would protect owners from a situation where the board decides to arbitrarily make outrageous penalty fines for non compliance of a CC&R rule, in order to put a lien on a home and possibly foreclose it, in bad faith.

If that is legal concept then I would think that it is important to state specific penalty fines for breaking rules in the CC&Rs. Of course it would be a mistake to use actual dollar amounts because inflation will eventually (and maybe sooner than later) decrease the value of the penalty. So the penalty amount could be stated in some other way that tracked inflation, like a percentage of the monthly dues.

Is the above correct or am I misinterpreting some subtle thing in defining penalty amounts?

And if this is correct can I assume that if an attorney drafts a CC&R without it they are not very sophisticated in this area? If the defining of penalty amounts strengthens the enforceability of the CC&R, why would they leave it out?
GlenL
(Ohio)

Posts:3526
08/26/2010 10:32 AM  
Tino as I understand it in CA a HOA must yearly publish a collection policy and have a formal fine policy. This is a URL for a CA attorney who specializes in HOA law: http://www.davis-stirling.com/MainMenu/MainIndex/Disclosurechecklist/tabid/456/Default.aspx

If you are asking if the right to levy these types of fees must be explicitly spelled out in the CC&R's then while that is a question for an attorney IMO they do not, often the States give the HOA the right by statute.

You are right about not including the fine amounts in any document that the H/O must approve a change in. There was a post here a few years ago from someone where the CC&R's limited the fine amount to $25.00. Most people happily paid the additional $25.00 a month as a cost to do whatever they were in violation of.
Too bad the only people who know how to run the country are busy driving cabs and cutting hair. - George Burns
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Forums > Homeowner Association > HOA Discussions > Defining fine amounts in CC&Rs


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