Voluntary association question

I live in Florida in voluntary homeowners association subdivision. Should they have still provided me with a copy of the covenants and declarations and if I'm not part of the association (don't pay dues either) and can they sue for violation of these restrictions?

Also...what is the difference between mandatory and voluntary other than not having to pay dues?

Haven't been through this before...thank you.

The CC&R's are PUBLIC documents available at your local COUNTY courthouse in the RECORDS department. The by-laws may or may not be filed with those. If they aren't then they are under the HOA's board control. You should find a copy there.

As far as "suing" a member for violating a rule/violation, that's not exactly right. A HOA shouldn't sue. They have other better options for them to collect money. Those are liens and foreclosures. However, those ONLY apply to UNPAID dues NOT violations. As far as issuing fines, most states do NOT allow for fines to be the basis or part of liens/foreclosures. The HOA can enforce the rules by other methods besides lawsuits.

I've heard the states of Texas, florida, P.A., and possibly Arizona to name a few. I don't live in any of those but read other posters from those states post this information several times.

I would like to state again what I stated in other posts. Fines and late fees are NOT considered a source of income of the HOA. Only Dues/special assessments are considered "income". That means that the HOA has to suffer a loss of income in order to pursue legal actions such as liens or foreclosures. Mind you it would be the cost of the legal action that the HOA could collect but NOT the actual fine.

Example: Someone leaves their garbage out on the street over the weekend. The HOA board votes to notify the owner to remove the garbage or be fined. The owner doesn't comply. The HOA then sends them notice that they will fine the owner $5 a day to a $100 max fine every time they see the trash outside of collection day. The HOA couldn't lien for the $100 max or the $5 fine because the HOA isn't losing any money due to the violation. It's just a rule violation. The HOA isn't paying money from it's account to correct the action.

However, IF the HOA has to contact an attorney, draft a violation letter, pay postage costs, and/or pay someone to clean up the garbage, that is subject to lien/legal actions. That is a "loss" or "damages" to the HOA. A judge can ONLY rule to make the HOA "Whole" not give it extra money it never lost. A fine is a gain from a subjective rule violation.

Think of the HOA's budget as a pie chart. A circle with segregated parts. The judge can't make that circle larger but can fill in the slices that may have been removed. Paying out to correct a violation removes a slice. Issuing fines just makes the circle larger.

Andrea,
In Florida the basic difference is whether you are required to pay fees or not. No one is required to provide copies of the documents to you. The only thing required is that you were furnished a notice that there are deed restrictions on the property you bought. It is up to you to find out what they are. Some associations try to be proactive and help owners by providing copies of the documents. Others are so understaffed, underfunded, or uncaring that they do little to nothing beyond what is required by law.
Yes, you can be sued for not complying with the covenants. You are required by the deed restrictions to comply. Covenants are not tort law, so to force compliance the offended party (association of your neighbors) must file a civil lawsuit to force compliance and recover the costs of enforcement.
In Florida we have a lot of homeowners' associations and therefore the state has been heavily involved in regulations. There is a Florida state statute that requires conflicting parties go to mediation first to prevent tying the courts up with lawsuits. The point is that conflicting parties should try to resolve their differences by talking instead of seeing who can throw the most money at lawyers.
Please read your covenants and decide if you are at fault or not. If you believe you might be at fault, fix what you have done. If you believe you are not at fault, then go to mediation. The state wants you to resolve disagreements without a lot of conflict.
Kevin

Not necessarily true. Not all money collected is considered "income" per se. The HOA's income is based on dues. The budget that is to be made out each year is NOT based on what kind of money the HOA is going to collect from fines or late fees that year. (Although some feel like the HOA is setup that way.)

Let me put it in another way. Do you know what your yearly salary is? Do you develop a rough budget for the year based on that salary? Do you factor in your raise, the possible hours overtime you may work, awards, and/or bonuses? Most likely not. You may plan for your raise but you don't really know for sure what the percentage will be. (Most cases).

The HOA is NOT much different. The budget it is required to develop at the beginning of the year can ONLY be based on the number of members and the dues they must pay. (That budget may include factors of percentage of who may NOT pay.) It can't be based on other "income" such as late fees, collecting on liens/legal judgements, or fines.

Although it may appear that fines, late fees, or judgements are "income" on the surface, they are really "Extras". Matter of fact, liens are more like taking a slice of pie out of the pie. If the HOA gets paid back for a lien, it just fills in that slice that was taken out. Making it a whole pie again.

Remember a HOA is a NON-Profit corporation. It has to spend exactly the same amount money out as it collects. That money has to be spent on the operational and maintenance costs of the HOA. It can include a spot for savings/Reserves. So fines, late fees or other collections may tip the scales a bit too much and cause some tax headaches if not handled properly. Much like winning money on a game show. It sounds great to win a million dollars on Jeopardy. However, once you get home, you find Uncle same gets $400,000 of it. The leftover $600K may be considered "income" and now your measly $50K a year salary jumps to $650K. That ALL taxable at the higher rate. Now is it really worth the Million dollar win?

A HOA fall under NON-Profit in MOST cases. They can be FOR-PROFIT as well but rare. Those kind of HOA's tend to allow for expansion and purchasing of more land using the proceeds of sales. A worthy note to take notice to. The NON-Profit status MAY require the IRS to declare it as a Non-Profit or For-Profit organization. That probably applies more to the charitable organizations. I do know when you file the corporation paperwork with the state, it notes if your a non-profit or for-profit corporation. It's best to look in your Articles of Incorporation to make sure what you are.

The difference between a Non-profit and Not-For-Profit can be mostly the wording in this case. I think what you want to know the difference between a Non-Profit organization/corporation (HOA) and a Non-Profit CHARITABLE organization. (Red Cross). This is a good question and often is VERY confusing.

You can NOT give or raise money in a Non-profit organization/corporation. You can raise or give money to a CHARITABLE Non-profit. That's because in a Charitable Non-profit their ONLY source of income is donations. There is usually No "membership fee" or other regular payments in order to gain their services. A HOA Non-profit has a source of income that is mandatory to pay to fund it. There is no outside source of income allowed except for what the members pay in through dues, special assessments, or other collections.

Technically you can't have a bake sale/lemonade stand to raise money for a HOA. (It could be taxable.) A HOA is ONLY funded by it's members FOR it's members. IF it has to raise money for a special project then it has the option of doing so in a Special assessment. That's the purpose of having those. A Charitable Non-profit has to gather money from any source it can.

I can't answer much more right now. Have a thunderstorm nearby. Hope this does give you the right direction. By the way, a boy/girl scout group may not be a non-profit charitable organization. They may be a for-profit since they produce cookies.

Thanks for your clarification Gloria. I agree, a HOA incorporates as a not-for-profit and pays taxes accordingly.