Can The Board Fine You For Filing An Insurance Claim

I own a condo in California, a few months ago the Board President and the Manager (also President's tenant) did some work on the cement pillars that separate the garages. Many garages face owners units, however my garage faces the opposite direction to where I can not visibly see it. I had no idea that work was being done on my garage nor was I notified that work was going to be done. They began work one day and apparently did not finish, when I went down to my garage the following day I then noticed that my garage had been left overnight with a large enough hole in it that a person could literally step into it. Several items had been stolen overnight, items that were in reach that could easily be pulled out. I filed a police report then I filed a claim with the properties insurance company, the insurance company just recently settled my claim. As soon as the claim was settled I received a violation notice to attend a hearing regarding the insurance claim I filed. The Board is trying to fine me because I filed a claim with the insurance company. Can they do this? Is this legal?

I don't do legal either. But I'm curious about why you didn't file with your homeowners insurance? And why the HOA insurance co. paid your claim without consulting with your Property mgr. or Board?

They did consult with the Board, the Board tried to claim that contractors were doing the work, which is how it is suppose to be done. But apparently they were caught in a lie, when in fact the Manager and President were doing the work themselves. No one was notified of the work to be done, nor were we notified that our garages were going to be left open all night. The President first told the insurance company that contractors were doing the work, after the insurance company spoke with others they learned that contractors were not doing the work, that the President and Manager were.

This is our 3rd Insurance Company in the last year, the others dropped us. We also have no legal counsel they also dropped us, they all had problems with the current President.

I am just curious what rule you broke, that they think they can fine you for.

Not saying there can't be a rule, just curious what it is they are listing as the cause of the fine/action.

No surprise that the association cannot keep either insurance or legal counsel.

This must be running the costs through the roof. Where are the rest of the owners?

The board would first have to find a reason within the CC&R, bylaws and rules before they can fine you. Usually, they should have a hearing prior to the fine.

Look at your CC&R and see what it says.

How it should work is:
1. Receive notification of fine.
2. Hearing (hearing requires that your board meets four elements).
3. Either you get a penalty or you do not.
4. If you disagree with the penalty, you can ask to meet and confer.
5. If that doesn't work, then you move to arbitration or mediation.
6. Litigation.

A hearing requires due process. You must have been given notification of the rules. You must be given notice of the alleged violation. You have a right to review the evidence and know the name of the person accusing you. If the person accusing is on the board or the whole board is bringing the action against you, then you can claim conflict of interest (which seems to be the case).

The elements of a hearing are:
1. Notification by personal delivery or first-class mail. If this is not met then the hearing is not up to code. You can refuse. Email doesn't suffice.
2. You need to have received it 10 days prior to the meeting unless your CC&R require a longer notification period.
3. The notice must contain the date, time and place of hearing, the nature of the violation (code number/cc&r number) and a statement that you can attend the hearing and present evidence.
4. After the hearing (you can request a closed session), you must be given notification (personal delivery or first-class mail) 15 days after the decision.

Keep in mind that for certain types of work the License board of California requires a license. Your CC&R may require a certain number of bids for work below $500 and then for above $500. If the work is above $500 a current valid license is required by the state of California and your CC&R will usually require so many bids and a signed contract.

If the work was done without a contract and the contractors do not have the proper license, then they have violated licensing codes (and CC&R) and can be reported. You might go back and think why the HOA (?) insurance was willing to settle.

In any case, remember that if you attend a hearing that doesn't fulfill the elements required, it can be taken as tacit agreement/consent.

JG11, DaveD3 & JM offer good insights. If there's no rule against x, y or z, I don't see how the board can possibly fine you. JM also presented a good list of steps.

You and others need to get rid of your Board! At the very least there seems to be a conflict of interest with the Board Prez ALSO being the PM.

How many are on your board?

Why did you file a claim with your HOA's insurance? That was your mistake here. It was a claim to be filed with your OWN insurance company. It would then be their responsibility to contact the HOA's insurance company to collect. It is similar to having a car accident and the other person lacks insurance.

I don't think this is a "fine". What they are doing is making you pay the deductible. A claim that most likely went the wrong route. I foresee them going to make a lien out of this if you do not pay. Which they can do if they had to pay the deductible. They may even just take you to small claims court over it.

HOA insurance is NOT for the individual members. It is for the HOA as a "whole". The contractors should have had their own insurance as well. So this claim could have also gone against the contractors. Which the HOA would have pursued.

In a situation like this, though, the deductible would not apply. If you went through your Homeowner policy yes, I agree you have a deductible to deal with. But because this event stems from the HOA people doing the work without notice to the homeowner and leaving your property unsecured, you would be in your rights to go after the HOA in small claims court for that deductible.

You should not have to pay any deductible at all. The HOA, is liable for ALL your costs and losses in this situation.

Typically, what should have happened is:

a) you file a claim with your insurance company (who cover the loss) and they go after the Association to recoup their losses.

b) you talk with the Board directly and the board decides to either cover the loss through the operating budget or through the Associations insurance. They would then go after the contractor to recoup their losses.

Did you approach the Board prior to filing a claim with the Associations insurance company? The Boards issue may be how you addressed the issue vs. having the issue addressed.

If it were me, I'd go to the hearing and bring a tape recorder.
If I could afford it, I'd bring an attorney with me to so the intimidation factor is reversed.

Just what exactly would you expect to accomplish by attending a board meeting and making any sort of complaint?

These are the very morons who caused the damage by performing unlicensed construction work. These are the same morons who think they have some sort of right to inflict punishment on a member for filing an insurance claim and receiving payment from the insurance carrier. What has happened that would lead anyone to believe that they have suddenly grown brains?

This is not a case where you are asking the board to resolve a conflict with a neighbor. In this matter, you are asking the board to admit its past errors and to take a different path. If the same people are still on the board, that is not going to happen and appealing to their good nature is a lost cause as they are totalling lacking in good judgment.

The only thing that is going to work is to haul these idiots before a superior court judge and let them try to justify their actions before the judge rules that they are nothing but dog excrement.

Taking them to court need not be all that expensive. A lawyer would most likely ask the court for a temporary restraining order when he initially files and, because there is no lawful basis for the association's fine, it would be granted. It would then be up to the board members to retain counsel to defend themselves. Given the history of the board, they will have difficulty finding an attorney and even more difficulty finding one who will defend their nonsense. The board has zero chance of winning and the plaintiff has good chances of recovering all their costs.

There is no reason to screw around with begging the board to do the right thing.

Yes, the hearing would be part of the Board meeting.
However, I didn't say I would attend the Board meeting. I said I would attend the hearing (to clarify, the hearing section of the board meeting).

The Board is required to hold a hearing prior to fining.
Failure to attend that hearing doesn't allow your side to be entered into the record.
Bringing the tape recorder makes sure it becomes part of the record.

The OP indicated that their Board has a history of issues that has caused insurance companies and attorney's to drop them as a client. Reading between the lines, this tells me that the Board will be less likely to listen to reason. If they won't listen to reason, you should be prepared for potential mediation or legal action to resolve the issue. The best way to prepare is to have documentation and demonstrate that you attempted to resolve the issue prior to legal action. Attending the hearing can demonstrate this attempt. This would be what I would hope to accomplish.

Mike,

I know you ordered a book of law through the mail.
To my knowledge, you have no other legal training.

I am not an attorney and I do not work in the legal profession.
Therefore, I will stipulate that you likely have had more legal training than I.

Based on your legal expertise, what California Statute or federal code backs up your statement that what is being done to JG11 is illegal?

Have you read JG's governing documents to determine that he in fact didn't violate something?

I haven't read those documents. Therefore, I don't know. Based on what JG has provided, I would certainly agree that it seems improper for the Board to try and fine him. However, since we don't know the reason for the fine and haven't seen any of the paperwork involved (not to mention my lack of legal training) I certainly wouldn't make the comment that it is illegal like you did.

Therefore, so the rest of us may learn from your expertise, would you please specify what sections of CA statutes and/or federal codes that back up your statement. Also, if possible, please provide links to the applicable documents.

thank you

We don't know that. The OP said that he received a violation notice regarding the claim. I haven't read the notice or the CC&Rs. You haven't read the notice or the CC&Rs. The OP didn't provide the language of the notice or the cite the section of the CC&Rs that the Board believes he violated. Therefore, we don't know. We know the background behind the claim. However, we don't know what the violation actually is.

As I stipulated, you likely have more legal training than I. Therefore, I suspect that the actual facts (which are unknown) of the issue are not relevant before making a decision on the legality of the issue.