Condo and HOA fines are one of the less enjoyable aspects of association management. People don’t like issuing or receiving them. But they are used because when issued fairly and consistently, fines work.
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Why do condos and HOAs issue fines?
The short answer to this is that fines discourage members from breaking the rules. While owners may not feel like cutting the lawn on a Saturday, they also don’t want to pay $50 to the association for failing to maintain their front yard.
The longer answer is that governed communities have an obligation to enforce all of the items in the governing documents, and issuing monitory penalties is one effective way that associations can fulfill this responsibility.
Condo and HOA communities follow a set of covenants, conditions and restrictions (CC&Rs), bylaws, and rules and policies. These are often referred to as governing documents. These rules and instructions are designed to help every member know what is and is not allowed. The rules promote positive actions that maintain the value of the community, and keep the peace within the neighborhood or building.
Not every person will like every rule, but they are not designed to benefit individuals. They are meant to serve the community as a whole.
As noted earlier, associations (and more specifically, board members) have a legal obligation to enforce rules, and when owners purchase a home in a condo or HOA, they agree to follow all of the rules.
But none of us are perfect, and from time to time, a member will break one of the rules. Sometimes, a friendly reminder will be enough to remedy the issue, but if an owner is more reluctant to change their behavior, a fine may persuade them to follow the rule.
Fines are issued to discourage future violations by owners. Often, if the association finds that a particular violation is occurring a lot, it will add a monetary penalty to the violation notice.
Fines must never be used as a way to generate extra revenue for the association. This would be highly irresponsible, and the association could get into legal trouble for using fines as a source of revenue.
How do you know when it’s time to issue a fine?
Associations must use a fine schedule or policy in order to issue fines in a fair and consistent manner. For example, if a noise complaint has been brought against a resident for the third time in less than six months, then the board may be in a position to issue a fine. Sometimes, there are state laws that inform the community about when they can issue fines. Other times, it’s left up to the board.
Tracking violations is an essential part of rule enforcement. This allows the board to see how many times an owner or resident has broken a rule, and whether the issue was resolved in time. Without proper documentation, it becomes impossible to keep track of violations – and poor violation tracking usually leads to selective enforcement.
Some managers and boards find that an online tracking solution works best. Not only can they issue violations while they’re inspecting the building or neighborhood, but residents and management can send and receive attachments and messages through the platform. Plus, everything is automatically saved and organized with a system like Condo Control, making it easy for associations to track when an owner last broke a rule.
In most cases, fines can only be issued if the alleged rule-breaker has had an opportunity to tell their side of the story in a hearing before the board. However, if there is proof that the resident did something very serious such as set fire to a common area, the board may be able to take immediate action and issue a fine without a hearing.
Please note that not every community can issue fines. In Canada, for example, most condominiums would have a very difficult time getting owners to pay fines. Under almost all condo declarations, there is broad language that allows the condo to charge back costs to an owner for damage or legal fees incurred while trying to enforce a rule. But there isn’t much at all about fines. If you aren’t sure about fines, contact your lawyer.
What does a reasonable fine look like?
When a violation notice comes with a fine, the resident should be able to pay it off relatively easily. Fines will vary depending on the association and the severity of the offence, but a minor violation could come with a fine ranging from $25 – $50. A more significant offence may be paired with a fine of $100 – $300. Fines shouldn’t be so low that they won’t do anything to discourage the owner from breaking the rule again. But they shouldn’t put financial strain on owners either.
Depending on where you live, your state or county may have its own rules about fines. For example, you may not be able to fine an owner more than $1,000 total for an ongoing violation. Once that amount is reached, the board will have to use other remedies, such as filing a lien on the property, or petitioning the court for injunctive relief, to enforce the rule. The laws might only allow for more severe actions to be pursued after a certain amount of time has passed.
If the state laws are quiet about fines, then an escalating fine system could work for your condo or HOA. Each time the same offence is committed, or if the violation continues past the corrective due date, the fine increases. So, for the first violation, just a warning would be issued. A second violation of the same nature would be met with a $50 fine, and a third violation would cost the recipient $100. This schedule will reset after a certain amount of time, often six months or one year.
You can download our free fine policy template to see how to create a detailed fine schedule for members.
Make sure residents know about the fine policy
Education is the best way to prevent violations from occurring. That means boards and managers should be as proactive as possible and make sure residents have easy access to the current governing documents and fine schedule.
An owner should not be surprised if they are hit with a $100 fine for failing to clean up after their pet. If they are surprised, then the community leaders may need to do more to get the information out. Not only will owners be more upset about the fines, but they will be more likely to fight the violation if they were not properly informed about what occurs after a first violation. A warning letter or formal violation letter should always include details about repercussions for failing to correct the issue by a certain date.
Fines help discourage owners from breaking rules or continuing on with certain behaviors. In order for fines to be effective, members must know about them, the fines must be reasonable, and they must be fairly enforced. All actions and communications leading up to the fine must also be documented in case there is a dispute about the fine later on.
While owners won’t ever be happy about receiving fines, if they are issued in a fair and systematic manner, they will understand why they are being asked to pay them.