TinoS (California)
Posts: 85
Posts: 85
Posted:
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?
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?