Special Assessments (whatever) Versus Fines

I do realize laws can vary widely especially from state to state but let me begin.

We are transitioning from Declarant to Owners and have been interviewing management companies. One MC company that presented said that unpaid fines cannot be used to lien/foreclose but special assessments for violations could be used.

I have seen comments about this on this chat (especially the Farran case in VA), but I cannot recall all. Could someone point me to any article/document that might further explain/clarify this.

Thanks

Run away from this management company. Do not walk.

Assessments, including special assessments, are levied against all owners and are based on a perceived budgetary need. Fines are punishments levied against one owner.

In the section that Tim quoted, your condo board may foreclose for an unpaid "share of common expenses chargeable to any apartment." [Emphasis added.] A fine is not a common expense. Had the SC legislature intended to include unpaid fines, they would have said so.

The management company that suggested calling fines special assessments to evade the law will get your association into big trouble. Steer clear of them.

Tim and Larry

Thank you for the replies. I will take the time and read the links.

Ironically we did not chose the MC that raised the issue as one of my concerns was they were trying to "play lawyer". Additionally they seemed to nickel and dime their charges but another subject.

I think I have enough information.

Again, thanks.

And I agree with Glen. It is common in Texas for language to describe Special Assessments to be applied to property owners generally, and other Special Assessments to be applied to a specific property owner, such as when the property owner, relatives, guests, etc. damage Association common elements.

The (individual) Special Assessment is not a fine as it is not a compliance matter, it is a process used to recover expenses incurred by the Association when the cause was an action or actions taken by a property owner or those for whom the property owner is responsible which resulted in damage to Association property.

the above does not imply application "new york", where I am not.

Do some jurisdictions avoid the terms "(civil) fine" like the plague ? If it cannot be lawfully labelled a fine, maybe the PMC bidders know it by some other name ? unit-specific charge without express legislative platform ? assessment for wrongdoing ? Thanks for checking.

The problem with fines in a HOA is that they are not "defined". HOA's have the right to fine but the definition and scope is missing in that statement. Which often leads to erroneous out of the wind fines to fit the whims of the board. Your cat meows after 10 pm? Well here is a fine for $100 and/or get rid of the cat...etc... What basis do you have to enforce this? You can fine but is that in the documentation that cat's meowing is a violation?

It is important to establish a "Fining Schedule". When developing one it is important to also know your state laws and restrictions. You may not be able to enforce fines like $50 a day till resolved. There is usually a cap. It's more falls under "Loan Sharking" type laws in your state. (If your doing research this may help give a direction). My rule of thumb is to look at the Bank's methods of collections such as late fees and such. Whatever the bank is doing is most likely the most legal pursuit.

We never fined in my HOA. We had another method which is a bit controversial for some. However, many HOA's do have the right to do in their documents. If the person is in violation of safety or aesthetic, then we could pay for the fix to put it back into agreement. We then send that bill to the owner if they refused to have corrected it on their own. If they do not pay that amount, then we can LIEN on that amount of money. We can not foreclose for it though. Our method worked like a fine but had more teeth. We could collect by lien or lawsuit after we spent the money. The court would consider that "damages".

Fines work like speeding tickets. Rarely anyone gets their car taken away for not paying their speeding tickets. They get jail time, points off license, or fined. In a HOA that would equal to restricting access to common areas, late fees, or a lien. Fines are NOT money making for a HOA. They are only punitive measures.