Closed Meetings for Fine Reviews

Started by CjS • 8 replies • 1170 views

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CjS (Maryland)
Posts: 21

Posted:

When a homeowner (or developer) has appealed a fine all the way up the the BOD, is the discussion with the party held in an open or closed meeting? Recently one of ours was held in a closed meeting and we would like to know the discussion since the fine that was waived was substantial. (We are in Maryland) Looking at the Open Meeting exceptions, there doesn't seem to be one that "fits"

SheliaH (Indiana)
Posts: 6,964

Posted:

You should check your documents, but in most cases hearings regarding rules violations are closed. How did you find out about the waived fine and how much it was?

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

CjS (Maryland)
Posts: 21

Posted:

We found out from a member who resigned over the lack of backbone from the BOD to stand up to the developers and hold them responsible. We don't know the argument made since it was closed. We are not really sure if in fact we are allowed to issue fines. It seems that this is discussed in the "guidelines" but not in the Covenants.

SheliaH (Indiana)
Posts: 6,964

Posted:

Even if this now former board member is correct about the lack of backbone (and that’s only an opinion since you weren’t there), it’s inappropriate for him or her to discuss ANY details of that meeting, so it’s a good thing he resigned.

Generally, closed board meetings should be rare - usually done to discuss issues like – rules violations (which may or may not involve fines), personnel matters, discussions of contracts with third parties, issues that are in litigation (e.g. foreclosure, settling lawsuits), or employee matters. Since this stuff is considered privileged information, other homeowners don’t have a right to attend unless they’re part of the proceedings (e.g. the homeowner’s who’s been fined). The board should announce in advance if there will be a closed session, providing a general reason for it (e.g. discuss foreclosure option for delinquent accounts).

You also mention the developer, which may cloud the issue even more. If you’re still under developer control, it basically runs the show until the community’s turned over to the homeowners, so there may have been a limit to what the board could do.

As for your covenants, there's probably language giving the Board the authority to enforce them and the board is able to issue additional rules (guidelines) to do this, as long as they don't contradict the covenants. That may include issue fines, so your guidelines should dictate when and why they're assessed, the amount, appeal rights, etc.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

KerryL1 (California)
Posts: 14,550

Posted:

In CA, meetings to "discipline" Owners, i.e., to levy fines, remove common area privileges, etc., are in executive session. They're not open to other members (Owners).

What, CjS, are these "guidelines" you refer to? Do your covenants say they're "governing documents?" I ask because in CA, types of violations, amount of fines, hearing procedures, etc., must all be spelled out. In my HOA, they're in the rules & Regs. I don't know about MD law. Sometimes, apparently, they're in the bylaws.

Sounds alike some of you feel the violator, perhaps the developer, got away with avoiding a fine. And I guess the rest of the owners are stuck with a bill for something you feel they shouldn't pay?

CjS (Maryland)
Posts: 21

Posted:

We are not in developer control. We have a fully voted in board but the developer still needs Environmental Control Committee approval to do any building, taking down of trees etc. The Guidelines are purely a product of a committee that spells out what they enforce and how. It is not part of the By Laws or the Covenants.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Honestly, you most likely can't even sue to regain those fines. Fines are not exactly "legally" enforceable. They are considered "punitive" damages. Civil courts typically don't enforce punitive damages.

It's why we never fine any of our members. Instead if it's a violation, we give them the opportunity to correct it. If they do not or refuse, then the HOA can remedy it and send the member the bill. If the member does NOT pay that bill, then the HOA can lien for that money. This I think has more teeth in it than a fine.

If your HOA does decide to sue instead of lien, then don't expect immediate payback. The owner can simply sell their property and leave without paying a dime. Unless your HOA wants to spend year and lots of money pursuing collections. A lien a owner/member can NOT sell until the lien is paid off. A lawsuit doesn't have such hold backs.

So I would not be so upset over the fine collections. A smart homeowner would know most of it is a bunch of bull and walk out. It is most likely what this owner told your board.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By MelissaP1 on 03/20/2017 4:15 PM
Honestly, you most likely can't even sue to regain those fines. Fines are not exactly "legally" enforceable. They are considered "punitive" damages. Civil courts typically don't enforce punitive damages. .

Melissa,

This may be the case where you live.
IT IS NOT the case where others live.

I've provided you, on several occasions, links to statutes that support this.

TimB4 (Tennessee)
Posts: 21,059

Posted:

CJ:

Maryland statutes are available at http://www.lexisnexis.com/hottopics/mdcode/

Per MD § 11B-111, meetings of the board may be held in closed session when addressing Discussion of individual owner assessment accounts. An argument can be made that any fine would be part of the assessment account.

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