Fining Policy

We want to create a fining policy. This policy will cover violations in the master deed and also violations that are in our rules and regulations. The only way to change our master deed is to have a majority of the residents vote AND also the majority of the first mortgage holders (banks). Does the fining policy have to be added to the master deed or can it be added to the rules and regulations therefore bypassing the banks approval?

We are in the state of Kentucky. So you think the fining policy can go in the rules and regulations and not the master deed?

HOLD your horses!!! There's a MAJOR issue here. MOST states do NOT allow fines to be the basis of liens or foreclosures!!! So the HOA can't legally file a lien or foreclose on a property if the person owes fines. It can ONLY be for non-payment of dues or special assessments. You can fine until the cows come home, but you legally can't collect.

Without going into ALL the legal mumbo jumbo and explaining liens, foreclosures, and lawsuits, I will take cut to the chase on this one. You can look up the other legal issues on other posts on here. It's been covered pretty extensively.

Most HOA's hate violations of the rules. So what do they want to do? They want to place Fines on these violations. Completely normal way of thinking. However, it doesn't work like that in a HOA for various reasons. Creating a fining policy is well and good if people are willing to ACCEPT this policy. They may well do it and pay the fines. However, your going to get your "challengers" and they are going to be right.

HOA's don't realize the power they already have. You may not need to change your documents at all. They just need to be read and understood. What many don't realize is the power of lien and foreclosure is strong. It's enough to get the violations cleaned up. It's just that the process is a little more complicated than sending in a "fine" notice.

The HOA has the power to clean up the violation and send the owner the bill. If that owner doesn't pay that bill, then the HOA may lien that member for that money. They can't lien for a "$25 a day up to $1000 MAX" fine to clean up the violation. The issue being that there is no "REAL" damages. A rule violation isn't the same as money being spent to correct the situation. Once money is spent, it's considered "damages". Damages can be used as a basis for a lien, lawsuit, or foreclosure.

Hence, why the HOA should send letters of the violation with the threat of "If you do not comply within a time frame, the HOA will clean up the violation and send the owner the bill. If that bill goes unpaid, the owner will be liened for that amount plus legal costs." Plus keep in mind, that dues payments can NOT be applied to fines. So the HOA can't apply the dues money toward paying down the entire account including fines. Fine payments are separate.