Fining Policy

We are getting ready to re-write our fining (and lien) policy

Was hoping that some of you migh share what yours say - so we can get an idea of what others do.

NPS

During our transition we began working on a fine schedule. It was getting long and convoluted. Our management firm said they use a simple scale. $25 first offense, $50 second offense, $100 third offense. They said fines are not meant to make money. They are designed to correct an offense. They also leave things vague as per time frame between fines. The principle being some offenses are more egregious then others and we wanted them corrected fast. Recent one was a car parked on the grass. The MC phoned them and gave them 24 hours to correct or fines would be daily. Car was moved within 24 hours.

Here are ours, NpS. Since we're a high rise, many won't apply to detached homes or to THs. Some of the time periods are mandated by CA statutes.

VIOLATION ENFORCEMENT PROCEDURE
1. Discovery of Violation
A. Any conduct that is a violation of the Governing Documents, including the Community Handbook of the Association, will be processed according to the procedures outlined herein.
B. In the event one or more residents or Management files a Violation Report, the Board will act as follows:
1. Send a letter to the Owner/resident stating the violation and date by which said violation must be cured.
2. Upon expiration of the cure date, if the violation still exists, the homeowner will be called to a hearing. Notice of the hearing will include the date, time and location of the hearing. The notice will be mailed no less than 15 days prior to the hearing.
3. The Owner will be notified of the decision rendered by the Board as a result of the hearing. If the Owner is found to be in violation of the Association's Governing Documents, the Board will either:
a) seek remedy by use of alternative dispute resolutions such as mediation or arbitration;
b) apply monetary fines to the Owner's assessment billing;
c) choose to correct (or cause to be corrected) the violation and assess the Owner for reimbursement of costs;
4. If the decision is to pursue a monetary fine system, the Association Fine Schedule will apply.

NOTE: A violation is defined as an act in conflict with the Governing Documents of the Association, which includes this Community Handbook.

VIOLATION FINE SCHEDULE
1. First Notice—Courtesy Letter
A Courtesy letter with a request to correct or repair the deficiency.
2. Second Notice
A hearing letter informing the homeowner that the Board may decide to charge a fine for the violation.

Except as specified elsewhere in this Handbook, and below, the basic fine for the first offense is $50. Fines will continue to double with each repetition of the offense.
The Board of Directors will determine the time for curing of violations for each owner consistent with previously reported similar violations as applicable.

Note: Any issue that requires immediate Board action will result in being called to hearing without prior notices sent.
Note: Should a violation occur which imposes financial obligations on the Association, the responsible party for said violation will reimburse the Association for the obligation by way of special assessment. Example: damage to walls, carpet, and/or any other common area, repair and replacement costs will be charged to the Owner.

SCHEDULE OF FINES
Except as noted below, homeowners are called to hearing with the second courtesy letter.
Except as noted below, most violations of the Governing Documents, including those in this Handbook, carry a fine of $50.00.
Liquid or solid materials dropped from balconies, decks or patios.
Immediate call to hearing, plus any cost of cleaning or repair $100
Liquid or solid deposits from pets in common area including the
street exterior of our buildings. Immediate call to hearing, plus any
cost to clean. $100
Corroborated noise nuisances from pets or people. $100
Corroborated report of inappropriate behavior towards staff.
Immediate call to hearing. $100
Unauthorized move in/move out. Immediate call to hearing and any costs to repair damage. Up to an additional $250.00 fine. $175

Leasing of a unit for a term less than thirty (30) days, $1,000 or for hotel, motel or transient purposes. Immediate call to hearing.
Unauthorized architectural changes. Up to a $500 fine and cost to restore to previous condition. $500

PROCEDURE FOR RESIDENTIAL OWNER HEARINGS
If you have been invited to attend a hearing for an alleged violation of the Association's Governing Documents, the following procedure will be followed:

Procedure:
1. You will be introduced to the Board of Directors and other Association representatives.
2. The acting chair will summarize the reason for your invitation to the hearing.
3. You may present written or oral evidence to state your position.
4. The requirements of the Association's Governing Documents will be reviewed for clarification of issues.
5. The Board may ask you questions.
6. You may ask the Board questions and make a final statement.
7. Your participation in the foregoing is appreciated by the Board. The Board will deliberate and vote in closed session.
8. You will be notified of the Board's decision, in writing, within ten business days.

We have a fine process similar to Kerry's HOA.

Offense:

1. Courtesy letter with a 10-day deadline to correct
2. If not corrected by 10-days, letter informing the homeowner of hearing
3. Hearing is held
4. $25 fine is levied if it is still not corrected after the hearing within 10 days
5. $50 fine is levied if it is still not corrected within 10 days
6. $100 fine is levied if it is still not corrected within 10 days

At our hearings, if it coincides with a quarterly board meeting, it requires the board and the offending homeowners to be present. We state the violation (include the article or paragraph # to cause a violation) and attempts/letters to the homeowners. We then give the homeowners 5 minutes to state or re-state their case. At the hearing, we do not allow them to ask questions or have a dialogue. If it has reached the hearing point, they know which article or paragraph they supposedly violated. After their 5 minutes, they are dismissed and the board deliberates. We send them a letter by certified mail stating that a $25 fine will be assessed if the violation is not corrected.

Also included in our by-laws, if a homeowner accumulates 4 violations, the board could have the association's lawyer send the homeowner a letter.

In our 8-year history, we have only fined 1 resident. This particular homeowner had multiple violations over a 2-year period, many for the same thing. Our previous MC would send the courtesy letter and the homeowner would correct the violation. The PM insisted that the clock would re-start even if it was for the same type of violation. Therefore, we never reached the fine level. We changed MCs and they said, "no...if the homeowner has the same violation then we can take action." That is when I found the 4 violations paragraph. At the time we had our lawyer send the homeowner a letter, they had 3 outstanding violations. In the end, we fined them a total of $75 ($25 + $50). We did assess a $100 fine but decided to waive it based on their compliance. They, in turn, sued us in small claims court (they lost). They grumbled a lot about the hearing process, especially on the 5 minute time limit imposed. They wanted a "conversation" but I told them that the time for coversations were over. They knew our position and they had sent us a 5-page response letter (prior to the hearing).

since your NOT asking for money, sorry!

Our success rate in this process was high and never experienced any real issues. It was already written into our CC&R's on this process. So if someone was in violation, we simply pointed out the section and the resolution available to us to take.

Matter of fact the biggest issue we had with this policy was the con-artist ex-president. He was trying to use this tactic to his advantage. He wanted the HOA to write a member up for a paint job violation. He owned his own painting service. That way the HOA would pay him to repaint the house and pay him out of the HOA money. He figured the HOA would then get back the money when we liened for it. A Win-win for him. Unfortunately for him, I ain't that stupid... The HOA had to HAVE the money first to paint or fix the violation.

Keep in mind our HOA setup is that you own the house and the lot the house sits on. Everything outside of that is "common property". The HOA is responsible for maintaining and controlling the common property. An owner/member has "exclusive use" areas but we still could override it. This setup allowed us to do the one thing we were responsible for doing. Lawncare. It would NOT be considered "Trespassing" for the HOA to enter anyone's property area to address issues. So we could indeed go and fix a violation on someone's property or paint a home. Not every HOA is setup this way. However, does not mean they can't have the same policy.

Our HOA wanted to "forgive" dues of members who died for the month they died. It was intended to lessen the load on the surviving member family who may have to pick up the bills. This sounds "honorable" and reasonable. However, it's just NOT practical.

If an owner dies, the home goes to probate court to sort out with or without a will. That process takes up to 6 months or more. That means 6 months of non-payment of funds. We had a rule of 6 months we lien. So you can imagine what do you do with an empty house that isn't paying their dues waiting to process through the court system. Do you place a lien on a home during the grieving process? The HOA doesn't even know if the family plans on keeping the home, there were no heirs, or the family is going to sell/rent it out.

So forgiving a monthly due throws a wrinkle in that process. We would still have to lien due to policy but we'd have the extra month to deal with. Do you add it or subtract it? Do you skip the late fees and interest on that amount? What if the HOA forgot that the owner had died and just sees no payment?

So when you institute policies be very careful. In this case, if an owner dies it is best the HOA does NOT skip the dues. Instead, the owners should contribute enough money amongst each other to pay the dues owed. That in the long run would help out everyone involved. The HOA gets their money, the family isn't going to face a lien, and the probate court should have made their decision by then.

I know by now everyone is going "this is off topic". However, felt that a situation like this should be mentioned to get a different angle on income issues in a HOA. What if this owner was facing fines at the time of their death? Do you forgive them or collect them? Think a few steps ahead when developing policies. Even the littlest ones can have a huge effect.