CC&R Compliance

Started by RonaldW • 28 replies • 2213 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

RonaldW (South Carolina)
Posts: 901

Posted:

In our association, and I suppose most associations, 90% or so of the homeowners comply with the CC&Rs without difficulty. The remaining 10% are repeatedly in violation of one thing or another (trash out on wrong day, trash containers, grilles, mowers, etc. not "screened from view", boats and trailers left in the driveway, vehicles parked on the street at night or on the lawns and so on). Visits, phone calls, even letters do not seem to change their lifestyle. There's no MC and no "fine schedule", for compliance we have to have our attorney send them a letter and they are then charged the attorney fee. This seems like overkill for small violations and of course leads to disharmony in the neighborhood.

What are some of the reasons (excuses) homeowners have given you why they could or should not comply with the CC&Rs? What responses or other actions have you taken that have improved the compliance rate?

Ron
SC

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Ron:
Why would you expect a 100% compliance rate with no management company on board and no fining system in place?

With no mgmt. company monitoring, how are violations reported and by whom? Why does the Board not want to handle non-compliance with letters or fine schedule? It seems costly to me to appoint your attorney to send letters on the Board's behalf.

Is this the process stated in your docs.?

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By PaulM on 03/31/2007 5:42 AM
Ron:
Why would you expect a 100% compliance rate with no management company on board and no fining system in place?

With no mgmt. company monitoring, how are violations reported and by whom? Why does the Board not want to handle non-compliance with letters or fine schedule? It seems costly to me to appoint your attorney to send letters on the Board's behalf.

Is this the process stated in your docs.?

This is what we have:
"SECTION 29 – Enforcement. Each lot owner shall comply strictly with the covenants, conditions, restrictions and easements. In the event of a violation, the Board of Directors, the ACC, or any aggrieved lot owner shall have the right to proceed at law."

There's no provision for "fines". The person who gets the letter from the attorney pays the legal fees. That's the "proceed at law" part.

Violations are reported by board members, ACC members and "concerned citizens". We send letters but it's the same people over and over again. With no ammenities and 134 lots an MC would not be cost effective.

I'm just looking for help on improving voluntary compliance.

Ron
SC

GloriaM (North Carolina)
Posts: 829

Posted:

Ron:

The fining structure would be in accordance with your State's Planned Community Act. In NC $100.00 per day is allowed to be fined for noncompliance, of course after the appropriate letter's have been sent and a Hearing is scheduled, then a decision is rendered by the BOD. A question, why would you have an attorney write the letters? Attorney's in general would charge anywhere from $75.00 per letter.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Ron:
You may be 'shortchanging' your community with the idea that an MC would not be cost effective. In your situation, they could most certainly be of tremendous help in monitoring violations. Obviously, your covenant docs would have to dictate that your community is able to contract with a mgmt. company for community mgmt.
Normally a Mgmt. Company charges by the unit, so the fact that you have upwards of 100 units would allow a fee to be negotiable. It never hurts to network with other communities in your area and ask for recommendations.

BradD2 (Florida)
Posts: 418

Posted:

In our situation we had three management companies in four years. Each time we tried a new one they were more expensive and the problems became worse.

The last one did a drive through once a month (we think it was closer to every 6 weeks) and missed about half of the things that the homeowners regularly saw. There was a washer and dryer on the front porch of one house for two months that they never noted even after we called and reported it. It took the management company two weeks before they sent out the letters so most of the non-compliance no longer applied. Their "notification" of non-compliance was the same for first, second and third offense but with some of the blanks filed in and some not. So the letter for first offense could easily be mistaken as the Association threatening a lawsuit up to 10k. There was a community outcry against this and we met with the management company and were told we had to live with it.

We became self managed at the beginning of March and have formed a covenant enforcement committee which consists of some Board members and some Owners. They walk the community every two weeks and try to talk to the Owners with non-compliances first and let them know there is an issue and what they can do to fix it. We had one house that was owned by someone several hundred miles away who had his son and nephews (and we believe more) living there and they ignored everything we said to them. So I took 12 digital pictures and had them blown up and drafted a serious but cordial letter and mailed it the owner. I was called a few days later and he apologized for the state of the house and has promised to re-sod the lawn, cut the bushes, take down the Christmas lights, move the garbage cans, etc... We are finding that while more time consuming, if you want it done right you have to do it yourself.

HaroldS1 (Arizona)
Posts: 314

Posted:

I'm curious how your "right to proceed at law," is interpreted to mean the owner must pay for the attorney's letter? I can't even find a definition of "right to proceed at law," to find out exactly what that means. A lawyer writing a letter is not "proceeding at law." It's huffing and puffing. You don't even have a fine structure, so where is the authority to charge the member for this letter? Is this spelled out in your documents? What if they don't pay it? What do you do then? Your HOA is stuck with the charge. Your attorney must be enjoying this immensely. Harold

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By HaroldS1 on 03/31/2007 7:16 PM
I'm curious how your "right to proceed at law," is interpreted to mean the owner must pay for the attorney's letter? I can't even find a definition of "right to proceed at law," to find out exactly what that means. A lawyer writing a letter is not "proceeding at law." It's huffing and puffing. You don't even have a fine structure, so where is the authority to charge the member for this letter? Is this spelled out in your documents? What if they don't pay it? What do you do then? Your HOA is stuck with the charge. Your attorney must be enjoying this immensely. Harold

Harold, we're not having a discussion on how to write effective CC&Rs here, like so many things in life, we have to work with what we've been given. There's no provision in the CC&Rs for direct "fines".

"Right to proceed at law" means take them to court, that is, sue them. There's a section in our CC&Rs that requires the the homeowner to pay all legal costs. The attorney's fee is a legal cost. Few homeowners will refuse to pay a bill from an attorney and the threat of going to court over leaving a trailer out or not finishing a paint job is enough to get compliance. I haven't been involved in this but it has been done several times in the past.

Ron
SC

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

The first two letters are sent by the board. If there is still non compliance or it's a repeated violation, the next letter is from the attorney explaining that if the problem is not corrected they will be taken to court.

Ron
SC

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By GloriaM on 03/31/2007 10:04 AM
Ron:

The fining structure would be in accordance with your State's Planned Community Act. In NC $100.00 per day is allowed to be fined for noncompliance, of course after the appropriate letter's have been sent and a Hearing is scheduled, then a decision is rendered by the BOD. A question, why would you have an attorney write the letters? Attorney's in general would charge anywhere from $75.00 per letter.

The only thing I could find for SC is a "Horizontal Property Act" which after a quick scan, seems to apply only to condos. Our CC&Rs don't provide for a fine system so I seriously doubt we could just implement one.

As I replied to another post, the attorney writes the third letter, not the first two. The violator must pay the legal fee for writing the letter, not the association. In effect, this is the "fine".

Ron
SC

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By PaulM on 03/31/2007 11:48 AM
Ron:
You may be 'shortchanging' your community with the idea that an MC would not be cost effective. In your situation, they could most certainly be of tremendous help in monitoring violations. Obviously, your covenant docs would have to dictate that your community is able to contract with a mgmt. company for community mgmt.
Normally a Mgmt. Company charges by the unit, so the fact that you have upwards of 100 units would allow a fee to be negotiable. It never hurts to network with other communities in your area and ask for recommendations.

Quick calculations indicate that an MC would add $60.00 or so a year to our current $145.00 per year assessments. I doubt that would be popular with the members and since we can only raise assessments 10% per year, it would be several years before we could implement this without a special vote. We do have the right to hire an MC, just not the funds.

I've heard people bragging about knowing the schedule of MC inspections so they just bring their trailers and trash cans in on those days. At least with officers and concerned citizens we have "random" inspections. I do realize that some of the concerned citizens may be biased so we check violations ourselves before sending a letter.

Ron
SC

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By BradD2 on 03/31/2007 4:59 PM

...... We became self managed at the beginning of March and have formed a covenant enforcement committee which consists of some Board members and some Owners. They walk the community every two weeks and try to talk to the Owners with non-compliances first and let them know there is an issue and what they can do to fix it. .............................
if you want it done right you have to do it yourself.

Brad, what do you do about the "short term" violations - trash cans out on the wrong day, boats or trailers parked in view overnight, overnight street parking, etc.?

Before I was elected to the board, the previous members decided to cut out the letters and call or visit the violators (this after the previous ACC resigned over an unrelated issue). Many of us said it wouldn't work but the new ACC tried it for a few months. Guess what - it didn't work. Same violations by the same homeowners over and over again. The ACC chairman finally admitted that this was not working and went back to the letters.

The idea of going in a group to talk to violators might work for us. Thanks

Ron
SC

RonaldW (South Carolina)
Posts: 901

Posted:

What I'm realy searching for is ways to let the homeowners know that the "rules" are actually covenants that must be complied with and not just a bunch of "farty old people" (taken from another post on this forum) telling them what to do.

And ways to get them to comply because they understand that it's for the good of the neighborhood.

The majority of the homeowners have never had a violation or complaint. How can we get the rest to fall in line?

Ron
SC

JM2 (Oregon)
Posts: 439

Posted:

Hi Ronald:

One thing you might consider...contracting with a MC to draft some violation letters that your BOD could send out themselves. If the local MC's haven't worked for you, check with some a bit further away but still in your community. Chances are, they will charge you a hefty fee for the service, but then the BOD can send them out for the cost of printing, postage & supplies.

Sometimes the ability to fine is hidden under "Assessments," or some other area; you might want to take another look at your docs. If there isn't anything, check with your lawyer on if it's possible to draft an amendment to your CC&R's to cover the issue, and what the cost would be. Chances are, the 90% of the folks who comply would be happy to agree to a change.

J. Patrick Moore, CMCA

MikeS1
Posts: 668

Posted:

Ron,

I'm a firm believer in the statement, "If you didn't put it in writing, it never happened". We're in Va and our Docs have a Due Process provision. PM sends out a warning/request letter and if doesn't get corrected after 30 days, the owner can be accessed in accordance with the fee schedule set by the Virginia Property Association Act. We've tried the verbal direct approach and it doesn't work. Document the problem and once the neighbors figure out that you're serious, your problems will diminish. It won't happen overnight, but it will happen.

JoeW1 (New York)
Posts: 728

Posted:

RonaldW - A man's home is his castle, in the case of an HOA/COA the castle resides in an area shared by everyone, men, women, and children alike. The Board has a fiduciary responsibility to guard the moat. Owners must recognize and respect the unfairness, and illegality when they violate the cc&r's. Doing so is a breach of contract. It's important for the witness to a violation to distinguish between a one-time and a repeated occurrence. After all, it's a rarity that everyone is 100% in compliance 100% of the time. That's where your "owner can proceed to law" clause concerns me. I would think it best as that owners are required to notify the Board or MC first, and allow a reasonable amount of time for the violation to be corrected.

An effective way to deal with violators is neighborly written communication, AND include a copy of the cc&r's. You must however, add some teeth to it by instituting and outlining a notification and fine procedure. Inform the residents that all owners, Board members included, are subject to adherence to the cc&r's, no one is exempt. Advise that all costs involved in the procedure to ensure compliance will be the responsibility of the violator, including but not limited to postage, and legal costs.

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By JoeW1 on 04/02/2007 11:28 AM
RonaldW - A man's home is his castle, in the case of an HOA/COA the castle resides in an area shared by everyone, men, women, and children alike. The Board has a fiduciary responsibility to guard the moat. Owners must recognize and respect the unfairness, and illegality when they violate the cc&r's. Doing so is a breach of contract. It's important for the witness to a violation to distinguish between a one-time and a repeated occurrence. After all, it's a rarity that everyone is 100% in compliance 100% of the time. That's where your "owner can proceed to law" clause concerns me. I would think it best as that owners are required to notify the Board or MC first, and allow a reasonable amount of time for the violation to be corrected.

An effective way to deal with violators is neighborly written communication, AND include a copy of the cc&r's. You must however, add some teeth to it by instituting and outlining a notification and fine procedure. Inform the residents that all owners, Board members included, are subject to adherence to the cc&r's, no one is exempt. Advise that all costs involved in the procedure to ensure compliance will be the responsibility of the violator, including but not limited to postage, and legal costs.

Again, we don't have the authority to "fine" as such but we do have the authority to charge them the costs of the letter from the attorney and any other costs.

I believe the fist and second letters (written and mailed by the ACC, not the attorney) point out the section of the CC&Rs that has been violated. We do not try to collect the 39 cents postage on these letters. You make a good point on the content of the letters. I may check into the exact wording and suggest a certain standardized section explaining that these regulations do apply to everyone and an oportunity to "explain" (his neighbor dumped the trash in front of his house, etc.) the violation and have the letter recinded.

A further attempt to clarify:

1. Mr. Jones is parking his trailer in full view from the street and leaving it there overnight. He gets a polite letter from the ACC explaining that this is not permitted. A copy of the covenant is included. He is politely told to move the trailer to where it is not a violation.

2. He does not move it or he moves it and repeats the violation again a few weeks or months later. He gets a second letter in a firmer tone explaining that he must comply or the matter wil be turned over to the attorney. He ignores the second letter and the trailer remains or returns.

3. He receives a letter from the attorney explaining the violation, a demand to remedy the violation, and the "threat" (if you will) that he will be taken to court if the violation continues and that he will be required to pay all legal fees involved. He will also receive a bill from the attorney for the cost of researching and writting the letter.

A member can also take legal action against another member if he or she desires. Of course they could anyway even if it wasn't specified in the CC&Rs just like they could in any community. I can't see this happening but it is possible if the member feels the HOA is not enforcing the CC&Rs. In this case it might be better to sue the HOA. As I said in another reply, we're not here to write better CC&Rs, we have to deal with what we have.

Ron
SC

MartyD (Florida)
Posts: 43

Posted:

You can send them the 1st and 2nd letter but your not allowed to fine? Your doc's does not allow you to levi fines ? If that is the case, then you'll be lucky to ever get these folks to comply...I would consider myself lucky to have 90%.

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By MartyD on 04/02/2007 1:13 PM
You can send them the 1st and 2nd letter but your not allowed to fine? Your doc's does not allow you to levi fines ? If that is the case, then you'll be lucky to ever get these folks to comply...I would consider myself lucky to have 90%.

Again, no, but the CC&Rs allow for them to pay legal expenses incurred to get them to comply. They pay the attorney's fee for writtig the third letter and any subsequent costs such as court fees. To them, this is in effect, a "fine". We don't receive any money but they pay money.

Am I not being clear somehow?

There's two ways to attempt to insure compliance:

1. Fine everybody until they comply. Piss them off.

2. Educate the members on the benefits of compliance and have "voluntary" compliance.

#2 makes for a more pleasant community and less screaming and threatening at the annual meeting. This is what I would strive for. I realize that a few people will only respond to #1. I'm hoping that if people look at their neighbor's properties and don't see violations, they are more likely to comply voluntarily.

Ron
SC

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Ron:
You have said your docs do not allow you to fine violators--but you are able to send 2 ltrs from ARC and the third ltr from an attorney who then is able to charge his fee to the violator.
Those few 10% who don't want to comply are really doing their own thing and know they will not be held accountable with a fine. So, in their mind, why comply?
What state are you in? Have you reviewed your state's docs on handling violations and if a fine schedule is able to be put in place?

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By PaulM on 04/02/2007 1:43 PM
Ron:
You have said your docs do not allow you to fine violators--but you are able to send 2 ltrs from ARC and the third ltr from an attorney who then is able to charge his fee to the violator.
Those few 10% who don't want to comply are really doing their own thing and know they will not be held accountable with a fine. So, in their mind, why comply?
What state are you in? Have you reviewed your state's docs on handling violations and if a fine schedule is able to be put in place?

GEEZE I'm having a bad day communicating today!

The violator who doesn't comply after the second letter gets to pay the attorney for writing the third letter. Let's say the attorney charges $75.00 as someone else suggested. The violator gets the letter from the attorney and a bill from the attorney for $75.00. That should be incentive enough to comply.

I have not found a state law that would or wouldn't allow for fines but the CC&Rs would have to be ammended to impliment fines.

Ron
SC

DwightT (Idaho)
Posts: 664

Posted:

Quote:

They don't have a direct fine assessed by the HOA, but there is still a penalty for non-compliance in the form of the attorney's fees. My HOA is the same way: no fines specified in the CC&Rs but we are able to assess fees to recover any legal expenses. Plus if the homeowner still fails to comply even after the attorney letter there is still the option of taking him to court.

Ron's method actually sounds better to me. If I understand him correctly, the attorney bills the non-compliant homeowner directly. In our case, the HOA pays the attorney and then it's up to us to recover from the homeowner, filing liens if necessary (which will probably involve the attorney again, running up still more legal fees that we have to try to recover from the homeowner).

Ron - if my understanding is correct, what happens if the homeowner refuses to pay the attorney bill?

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By DwightT on 04/02/2007 1:57 PM

They don't have a direct fine assessed by the HOA, but there is still a penalty for non-compliance in the form of the attorney's fees. My HOA is the same way: no fines specified in the CC&Rs but we are able to assess fees to recover any legal expenses. Plus if the homeowner still fails to comply even after the attorney letter there is still the option of taking him to court.

Ron's method actually sounds better to me. If I understand him correctly, the attorney bills the non-compliant homeowner directly. In our case, the HOA pays the attorney and then it's up to us to recover from the homeowner, filing liens if necessary (which will probably involve the attorney again, running up still more legal fees that we have to try to recover from the homeowner).

Ron - if my understanding is correct, what happens if the homeowner refuses to pay the attorney bill?

I haven't been involved with this since I've been on the board so I'm going by what previous board members have told me and it hasn't been discussed in detail.

Ron
SC

RonaldW (South Carolina)
Posts: 901

Posted:

The practice of forcing the violator to pay the attorney eliminates any suspicions on the part of homeowners that the HOA is using fines as a "revenue source". You can be sure there are a few who would believe this just as there are some who believe levying fines for not wearing seatbelts is a scheme for the government to get rich.

Again, we have no choice, we work with what he have.

Ron
SC

HaroldS1 (Arizona)
Posts: 314

Posted:

Your members contract is with your HOA, not your attorney. Your attorney is an employee of your HOA. So does your documents actually give authority to an outside attorney to, in actuality, as per your statement, "fine" your members? If this attorney is sending letters, he is doing so per your instructions as your employee. As such, it is your HOA who owes him the money for the letter - and you then have the authority you quoted from your documents to go to the member for payment. You're skipping a step here! Your members have not contracted with this attorney - you have. If some attorney I never heard of sent me a letter and then told me I owed him $75 for sending it, I'd tell him to shove it where the sun doesn't shine. This is the weirdest sluffing off of responsibility. And yes, it is your board's responsibility to enforce your documents. Your attorney's letter is a tool, just the beginning of your "proceeding at law," nothing else. Harold
P.S. - you never answered: if the member refused to pay this attorney's fee, what happens? Does your attorney have the authority to sue the member for payment for a letter you authorized him to send? What if he ignores the letter and continues with the violation?

MikeS1
Posts: 668

Posted:

Since I was curious about other state laws in this case, I started looked at South Carolina’s laws and ran across this interesting site that details the various HOA laws for each state in the county. It’s called “Condominium, Cooperative and Homeowners Association Acts by State”. Some of the links on this site are not active but you can easily just google the name of the law or act listed here.
http://communitiesonline.org/laws/

In VA, it’s NOT the HOA docs or CCR’s that provide a schedule of fees or fines for violations. It’s actually the Virginia Property Association Act of 1978. See link.
http://www.rbdlaw.com/associations/files/statutes/Virginia%20POA%20Act%202004.pdf

(VA POA ACT - Section 55-513). They don’t actually call these “fines” or “fees”, but rather refer to them as “charges” or “assessment charges”. After looking at South Carolina and other states, I was somewhat appreciative of the VA legislature for writing this law which gives us the teeth to enforce the CCR’s. The two letter (Due Process) scenario with specific notification (time/service) requirements (like certified mail) is a little cumbersome, but it beats going to an attorney on the little stuff.

In SC, I could only find the horizontal property association act which as far I can see, doesn’t do a whole lot for the HOA in terms of making it easy to enforce the CCRs. Why should you have to resort to a civil action in order to achieve compliance?
http://www.scstatehouse.net/code/t27c031.htm
SECTION 27 31 170. Co owners shall comply with bylaws, rules and regulations and the like; remedy for noncompliance. Each co owner shall comply strictly with the bylaws and with the administrative rules and regulations adopted pursuant thereto, as either of the same may be lawfully amended from time to time, and with the covenants, conditions and restrictions set forth in the master deed or lease or in the deed or lease to his apartment. Failure to comply with any of the same shall be grounds for a civil action to recover sums due for damages or injunctive relief, or both, maintainable by the administrator or the board of administration, or other form of administration specified in the bylaws, on behalf of the council of co owners, or in a proper case, by an aggrieved co owner.

Peace!

RogerB (Colorado)
Posts: 5,067

Posted:

Harold asked "if the member refused to pay this attorney's fee, what happens? Does your attorney have the authority to sue the member for payment for a letter you authorized him to send? What if he ignores the letter and continues with the violation?"

In Colorado, the attorney sends billings to the delinquent owner on behalf of the HOA as authorized by the HOA. The HOA pays the attorney and legal costs either up front or upon collection and the homeowner pays the HOA for all costs involved.

If the owner refuses to pay the HOA the attorney files a lien, if not already done, and if not paid within a specified timeframe the attorney proceeds to court action to garnish wages and bank accounts for all owners listed on the deed. If still not possible to collect the attorney can be authorized to proceed to foreclosure. Alls costs are assessed to the property and collected eventually unless there is not sufficient equity in the property. In which case the HOA could delay the attorney from going through foreclosure.

HaroldS1 (Arizona)
Posts: 314

Posted:

Thank you Roger for confirming that all attorney actions must go thru and be authorized by the HOA, including payment for services. Ultimately the HOA is responsible for all actions taken. A local CAI guy got clobbered and sanctioned by a judge and by his Bar Assn for trying to go direct with an HOA member. This set up of allowing the attorney to "fine" and collect from the members is a lawsuit waiting to happen. Harold

RonaldW (South Carolina)
Posts: 901

Posted:

Well, I got lots of replies but little usefull information other than a suggestion to have a group of people talk to violators. I was hoping to find a way to use more "carrot" and less "stick" but I guess it can't be done.

Thanks anyway.

Ron
SC

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here