HOA Board offering a discount on monthly dues to members who turn in their neighbors for violations of the CC&Rs or By Laws

At our last HOA meeting the President offered a discount, of $5.00 per month off their dues, to anyone who will turn in their neighbors for violating our CC&Rs or By Laws. I thought this was illegal in California. Can they do this, I can't find anything in Davis-Stirling to address this issue. Thanks

My understanding is that a Board does not have the authority to waive assessments.

If they want to pay members to turn in others, then they need to issue checks.

As Richard pointed out.

Can they do it? Yes - until challenged (possibly through the courts)
Should they do it? No - CC&Rs specify that expenses are to be shared
Do they have the authority to do it? I don't think so. But someone will need to challenge the issue, and possibly challenge it through the courts.

My suggestion:

Write a letter asking the Board where the authority to waive assessments come from? Cite your own documents that specify assessments are to be applied equally and that you believe the proper way to do what they want to do is to physically cut a check to the individuals vs. waiving any assessment. Additionally, encourage them to seek a legal opinion on this decision.

Dumbest idea ever... You never ever waive dues. The problem? When it comes time to file a lien for unpaid dues, where do you begin? What is forgiven and what was owed?

Plus the HOA board should concentrate on issuing their own violation actions than have them reported to them. I need no paid incentive to turn in a member in violation. Otherwise I don't think it's a violation or care...

Legal or illegal, it is one of the worst ideas I have ever heard on the chat.

I agree 100%. Of course, the strategy of pitting neighbor against neighbor was quite effective for Hitler and Stalin, among others, so maybe they're onto something.

Your President does realize a HOA is ONLY funded by it's members FOR it's members? So this "discount" is coming out of the HOA budge. Which leaves your HOA with less money to work with... Just sayin that it may not take long to figure out this stupid move... If not, your not dealing with a dictator but stupid...

I have dealt with situation of "incentives" to homeowners for a number of reasons. I have seen it used as an incentive to vote. I have seen where 5 homeowners were given a month free of dues in a raffle. Never heard, yet, of someone paid for "ratting" out their neighbor.

I have found no case law, nor any statue prohibited such practice. It could actually be included in the budget somewhere.

So can it be done, unfortunately yes. Should it be done, NEVER. But, left unchallenged, it will continue.

Court cases have established that all owners of similar class property must pay the same assessment amount. Additionally HOA funds must be used to maintain the common area. Paying assessment dollars (discounts) to residents reduces their assessment amount (unequal treatment) and violates the use of assessment provisions which restrict funds to common area use only. Take your HOA to court if they persist in this activity.

Richard. Until 2014, our community offered a 5% discount for assessment payment in full. In 2015 the attorney said that court cases had said discounts were illegal because all residents had to pay the same amount. I contested this and asked in numerous letters for the lawyer (board) to provide copies of these rulings. As usual, the board ignored me which they usually do unless I threaten court action. In this case, I decided not to pursue this because I felt that a judge would agree with everyone paying the same assessment. I would, however, be happy to spend my money in court if the board were using rebates (my money) to influence residents to turn their neighbors in for violations. I would take the board to court in the referenced case because I would feel that I was almost guaranteed to win the case. I can hit our attorney again for the case files but it is really not worth the battle it would take to get the case histories. I do believe they exist.

Bottom line is that everyone is to pay what is owed according to the CC&Rs.

Discounts should not be applied.

If you desire to discount, then the Association should collect the full amount and write a check for the discounted amount.

$5 is not a $5 refund... There is costs associated with giving refunds. Plus it makes no sense to do such a practice. Reimbursement of expense paid is a better approach. A refund is more of a benefit or award. A reimbursement is along the court lines of "damages". One can sue for not being reimbursed. How does one sue for a refund for awarded benefit?

Anything a board does that does not contribute to the common area assets in some way should be challenged, whether it be a check issued to someone or a reduction in assessments. A check written to a resident who submits an itemized receipt for a part to repair the clubhouse plumbing would, I suspect, pass the test. A check written to a resident who submits a receipt for expenses related to a party for his boy scout troop or a contribution to the food bank would not. It all goes back to what residents are willing to support. I have successfully prevented, without legal action, several expenditures that did not directly apply to the common area and benefit our residents from whose pockets these funds came.

And if that doesn't work, rally the homeowners to attend the next meeting and demand that this practice cease immediately - or consider pushing for a recall of the president for such a stoopid idea (that is, if the rest of the board doesn't step in and remove him/her from the position)!

If CCR violations are an issue, there are better ways to address this - here's one person's suggestions. First, the board should identify which ones are causing the most problems - a quick way to get a handle on this is to poll the homeowners on what they're most annoyed about. From there, you can determine which ones are true association issues vs. neighbor/neighbor disputes (the board should stay out of those unless an issue begins to impact several neighbors). It should then publish an article or two in the community newsletter or website (or both) reminding people of what the rules are and why they exist (not to mention that all homeowners are legally obligated to comply). It should then state that a new emphasis on rules enforcement will begin immediately and how it will work. Begin with the issues homeowners have stated are a real pain in the ass, such as litter piling up on someone's lawn.

To keep things fair, the property manager should conduct periodic walk-throughs of the community looking for those problems instead of nitpicking over everything else and issue a report to the board. CCR violation notices can be mailed with deadlines for compliance and appeal rights. The frequency of the walkthrough is up to the board - it may be as simple as doing it every quarter or you may have to start with a weekly walkthrough and then reduce it as you get a better handle on the problem. Your newsletter and website should also have updates on the rule enforcement progress.

Yes, people will moan and complain, or yell about selective enforcement, and a few will threaten to sue, but if you apply the rules fairly and consistently, and document what you do and why, the majority will understand why this is necessary. One of the attorneys at our association's law firm did this with another client and noted the board will have to anticipate some pushback at first, but if they keep at it, people will soon realize rule enforcement is begin taken seriously. It takes longer, but is a lot more effective than this paying people (which can bring up a number of problems besides screwing around with the budget)

why does the reward make the difference between being a snitch vs. being a good citizen?

Tim. The question started out, and is, use of HOA funds to pay those reporting violations (not crimes or potential crimes) and not people who are dishonest and take money from the government. We should stay on point in these discussions

Your examples do not apply.

The IRS will provide a percentage of the money recovered for reporting tax evaders. No Difference. Money comes from funds recovered

Many States (SC for example) offer rewards for whistleblowers. No Difference. Money comes from funds recovered

The reward of a safer neighborhood is provided by reporting crimes or potential crimes. Difference is money comes out of the pockets of residents when their assessments are used.

We have an MC and don't pay them to identify violations. We pay them for lot of other services. Residents tend to report violations to the PM in our high rise because of noise nuisances, or fluid coming off a balcony.

IF the MC contract includes a circuit very so often to look for violations, then that's the contract. It either should be enforced by the board, of the board should reduce the price of the contract.

I've read on this forum of boards who themselves take a tour now & then to look for violations.

Yes, there are HOAs with variable dues, but they are set out in the governing documents that no board or prez can arbitrarily change

Jack,

I have no idea if it would be less expensive or not.
The last time we had a contractor doing that, we were paying them $350 a month.

I'm simply playing devils advocate for discussion sake.

If you read my initial response, I said it was sucky to pay residents to snitch, but if the Association was going to pay, they should not discount the assessment but issue a check. This way, the cost can be budgeted properly.