Transient Occupancy Question for CA HOA's

Started by LindaK5 • 24 replies • 1766 views

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

⚡ Takes 30 seconds

Already a member? Log in

LindaK5 (California)
Posts: 242

Posted:

We've had an ongoing transient occupancy issue in our community with one of our homeowners. It is currently being resolved through an appropriate fine as the Board has documented evidence of said violation.

For those of you in California, how do you deal with a homeowner that, though fined for this particular violation, continues to do it? I'm only asking because this homeowner stated in correspondence that they would stop and obviously didn't so do.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Linda

Are they paying the fines? Double them per occurrence.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Can your fines be turned into a Lien? Many states do not allow fines to be the basis of liens or foreclosure. So may want to find out what kind of real power fines do hold. May want to find another option and talk to a lawyer about it.

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

Pretty sure you asked this previously, Linda, tho' I don't have time to check. Can't recall if you're on the board.

I believe the replies were to have the board increase the fines and to double them per occurrence (a la John C). As you know in CA the board must follow the procedure found in the Davis-stirling Act. I believe another reply was to via a hearing remove common area privileges from that property if you have any worth removing and your documents permit it.

LindaK5 (California)
Posts: 242

Posted:

Yes, Kerry - this was addressed before and heck if I could find the thread! Sorry.

We are following Davis-Stirling on this. We have a Fine Policy in place. She was just sent notice of the first fine and yes, subsequent fines will be doubled.

As to a lien - I don't believe we're able to do that in California. Perhaps small claims is our only option as far as the fines go.

I'm more interested in what the HOA can do if they continue to do it? Transient occupancy, in this case, is putting the Association at risk.

KennethS2 (California)
Posts: 36

Posted:

I am in Ca and have had this type of problem. Not paying fines. We have taken them to Small Claims when they get to around $2500. We have won all of them because of good documentation. If they then don't pay you can lein.

Ken

KerryL1 (California)
Posts: 14,550

Posted:

Is the Owner refusing to pay fines, Linda? Or are you worried she won't?

Whatever you do, follow Kenneth's advice and proceed exactly per the (CA) Davis-Stirling statutes and keep everything!

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By KennethS2 on 11/21/2016 9:31 PM
I am in Ca and have had this type of problem. Not paying fines. We have taken them to Small Claims when they get to around $2500. We have won all of them because of good documentation. If they then don't pay you can lein.

Ken

Ken

If an owner doesn't pay their fine, you can suspend their common area privileges (with due process), you can take them to small claims, and if you win, can record a judgement agaisnt them, but under Civil Code, you cannot lien for a fine.

LindaK5 (California)
Posts: 242

Posted:

Thanks, Kenneth ... good info.
Kerry .... I'm thinking ahead. I have a pretty strong feeling that they may refuse to pay.

Another question ... is it lawful to assess a fine for soliciting on an air Bob website? I'm thinking it would probably fly under operating a business, which isn't allowed either.

KerryL1 (California)
Posts: 14,550

Posted:

Good question! I think you'd need your HOA attorney's opinion on that one. We have the same no-biz operations on the premises too in our CC&Rs.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Fines work just like speeding tickets do... They are PUNITIVE monetary measures. They are not used to make the HOA a profit or benefit. So you need to put your fining process into prospective. No you can't use them for basis for liens/foreclosures in many states. A lawsuit may not fly as it's just another "judgement". One that one doesn't have to pay as the HOA has no right to one's social security number for certain collection options. Plus the person can simply sell their home and move without ever paying a dime. A lien holds the owner to the home till they pay the lien. A lawsuit doesn't.

So is the fine system really working? Seems you all may be blindly following a misconception just because it sounds like the right thing to do. Check and talk to a lawyer. It's the best advice I can give.

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

Fines work in our HOA, Melissa. But they must be hefty enough to discourage repeat behavior. An, of course, they (in CA) must be won a fine schedule tj that's sent to owners every e year. In addition, CA has strict hearing procedures to follow.

The purpose of fines is NOT "punitive" as I've read in many sources. Instead the purpose is to encourage compliance.

KerryL1 (California)
Posts: 14,550

Posted:

Fines work in our HOA, Melissa. But they must be hefty enough to discourage repeat behavior. An, of course, they (in CA) must be on a fine schedule that's sent to owners every year. In addition, CA has strict hearing procedures to follow before fines may be levied.

The purpose of fines in any HOA is NOT "punitive." Instead the purpose is to encourage compliance.

LindaK5 (California)
Posts: 242

Posted:

Yet another question on this topic for those who have experienced this aspect of it ..... what is a reasonable fine to charge for ongoing airbnb advertising?

Homeowner was sent a letter stating they have 10 days from the date of the letter to stop all online advertising for her airbnb. They are thumbing their noses and are continuing both to advertise AND have guests. We will continue to fine regarding guests. Our fine policy allows for daily assessments and I'm wondering if this is the time to utilize it? If so, what is a reasonable charge?

TimB4 (Tennessee)
Posts: 21,062

Posted:

Linda,

If the fines are not deterring the activity, it may be time to take legal action.
The Board can send a letter to the owner that the Board considers this activity a continuing violation and further activity will result legal action.

KerryL1 (California)
Posts: 14,550

Posted:

How much IS the fine, Linda? As I recall from your previous post, your fines were pretty small, but you were considering having your Board raise them. Did that ever happen? How much per day? Or per incident?

Where in your HOA's documents are short term rentals prohibited??

Ours for a rental under a month is $1,000 as I've mentioned previously. Another condo near us is $2,500. But rentals for these are very expensive.

If she refuses to comply, you'd have to follow Tim's advice

LindaK5 (California)
Posts: 242

Posted:

Tim - they just received their first fine letter advising them of the Executive Session to set the fine (to which they are allowed to attend to state their case). It's not for another week, but in the interim, in the same letter, they were told to stop all advertising, which isn't happening. I will suggest to the Board that legal action take place once the fine has been set.

Kerry - fine is $200 per violation/incident for the airbnb use. As to the online advertising, I want to suggest a daily assessment per each day the ad stays up (we also have daily assessments in the new fine policy).

Yes, we adopted a new fine policy recently. Declaration states no short term rentals or home-based businesses.

LindaK5 (California)
Posts: 242

Posted:

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By LindaK5 on 11/27/2016 4:37 PM

Yes, we adopted a new fine policy recently. Declaration states no short term rentals or home-based businesses.

My recommendation is to not approach it as a home based business. This can open up other issues the Association might not want to get into (the consultant who works out of their home, daycare provider, etc.).

Instead, concentrate on the obvious - no short term rentals.

LindaK5 (California)
Posts: 242

Posted:

Thanks, Tim.

Any recommendations on a daily fine assessment? $1, $5, $10? I have no clue where to go with this or what to present to the Board. I'm hoping someone else has dealt with something like this.

TimB4 (Tennessee)
Posts: 21,062

Posted:

Virginia Statutes limit monetary penalties to $10 per day, not to exceed 90 days for continuing violations.

I can offer the following:

Fine Policies in HOAs - How to Be Reasonable and Follow California Law article by ECHO

Fine Policy from Davis-Stirling web site

Fine Policy from an HOA

Penalties for Violations in the Homeowner's Association Article in San Francisco Gate

Enforcement Policy and Fine Schedule from a CA HOA

The one thing I am noticing is that if the Association doesn't already have a fine policy in place, they simply can not wing it now. Any penalties must comply with your Association fine policy and you may need to rewrite (or write) the policy prior to enforcing a per day charge.

Hope this helps,

Tim

KerryL1 (California)
Posts: 14,550

Posted:

I think you'd better talk with your HOA attorney about whether you can fine her for advertising a short term rental. I say this because your HOA doesn't have a rule against advertising, only actually renting it. And even if you can fine her for advertising, you may not fine for every day she advertises if it's not in your HOA's schedule of fines. You only can set a fine for this behavior by way of a rule change, which you presumably know how to do. If not, see D-S.com.

You can, of course, lecture her about this if she shows up for the hearing.

You say your fine for this violation is $200 per incident. But if she can get $700 for a long weekend, $200 isn't a deterrent. In that case, your Board may want to make a new rule that the fine per incident is much more. But this must be done per Now IF your rule says you can double it, that should stop her. But you must have an actual written rule that say fines may be doubled on repeat violations of the same rule.

The fine only needs to be "reasonable." If she can get $700 for a long weekend, a $700 fine per incident is reasonable.

Do read Tim's citations.

LindaK5 (California)
Posts: 242

Posted:

She is charging $70 per night. A $200 fine assessment seems reasonable.

We do have the option of charging more. Up to $500 per fine assessment.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By KerryL1 on 11/28/2016 2:33 PM
I think you'd better talk with your HOA attorney about whether you can fine her for advertising a short term rental. I say this because your HOA doesn't have a rule against advertising, only actually renting it. And even if you can fine her for advertising, you may not fine for every day she advertises if it's not in your HOA's schedule of fines. You only can set a fine for this behavior by way of a rule change, which you presumably know how to do. If not, see D-S.com.

You can, of course, lecture her about this if she shows up for the hearing.

You say your fine for this violation is $200 per incident. But if she can get $700 for a long weekend, $200 isn't a deterrent. In that case, your Board may want to make a new rule that the fine per incident is much more. But this must be done per Now IF your rule says you can double it, that should stop her. But you must have an actual written rule that say fines may be doubled on repeat violations of the same rule.

The fine only needs to be "reasonable." If she can get $700 for a long weekend, a $700 fine per incident is reasonable.

Do read Tim's citations.

I agree. A fine for an ad is on very weak grounds as it might not be a violation of the Covenants/ByLaws whereas the nightly "renting" is.

LindaK5 (California)
Posts: 242

Posted:

Thanks for the feedback!

🎯 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