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Fines by Resolution

Started by JenniferP9 • 9 replies • 484 views

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JenniferP9 (Alaska)
Posts: 1
Posted:
Our condo association consists of 10 units. The board of directors has signed a resolution for fining owners $250 if they do not submit a proxy or attend the annual meeting. The manager's office has not sent it out yet so the exact wording is not known. The resolution is supposed to cite the specific authority to do so. There have been problems in the past with reaching a quorum at the annual meeting. The bylaws state the board can establish and collect fines for violations governing the use of community facilities. The bylaws also state an owner may submit a proxy. There are no requirements listed that owners have to submit a proxy or attend the meeting. Has anyone heard of fining by resolution?
MaxB4
Posts: 3,513
Posted:
It would NEVER stand up in a court of law.
TimB4 (Tennessee)
Posts: 21,059
Posted:
I've never heard of imposing monetary penalties for failure to vote or attend a meeting.

To impose monetary penalties for violation of covenants, then the authority must be within the covenants or State statutes. A resolution will not withstand a court challenge.

To impose monetary penalties for violation of common area rules, it's possible to use resolutions. However, one should check with an attorney on proper wording.

To me, the authority to vote or not is within the covenants and bylaws. Therefore, I believe a covenant change would be required.

Now, to be realistic, if nobody is willing to go to court over these monetary penalties, then they would likely stand until challenged.
CathyA3 (Ohio)
Posts: 6,299
Posted:
I agree that this probably won't fly legally. And it's better to try the carrots before bringing out the sticks.

With only ten units, it's very possible for the board to knock on doors and talk to the neighbors! Who knows, you may get more of them to attend the meeting in person. Quorums for annual meetings can be pretty low - if yours is as well and the entire board attends, you should be close.

Other suggestions for making quorum:

* Talk up the meeting well ahead of time.

* Candidates for the board should campaign actively.

* Have a hot button item on the agenda or include a speaker who will address topics of interest to the community. Covid, anyone?

* Serve refreshments.
KerryL1 (California)
Posts: 14,550
Posted:
Agree with others. How many are owner occupied? What % of owners is quorum for your HOA?

If affordable, you might try a drawing for those who voted with a $xx gift certificate at your nearest supermarket.
CleoD (Alaska)
Posts: 1
Posted:
Hi all,

Jennifer and I are members of the same association. If I said to you that our Declaration says that we are all equal co-owners, the Articles of Incorporation say that the Association was formed for to manage our shared property and "to join in and agree to assume the burdens and duties" of managing the property, and the bylaws say that the Board is endowed with the authority to make rules and levy fines in enforcement of those rules - would that change anyone's opinion regarding the legality of the issue?

Thanks!
CathyA3 (Ohio)
Posts: 6,299
Posted:
It would not change my opinion.

The CC&Rs need to have some kind of language in them authorizing the board to fine members for violations before the board can developing a fining schedule. Without that language, the board is creating an authority for themselves that they don't have.

Alternatively... look for language in the CC&Rs that defers this sort of authority to your state's laws governing community associations (may have different laws for condos vs. HOAs). If your CC&Rs do have such language, look at the relevant state law to see what it says about ability to fine members. If it says nothing, then the authority isn't there.

If the board chooses to go ahead without any legal authority to do so, it's asking to be sued.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By CathyA3 on 05/07/2021 5:54 AM
It would not change my opinion.

The CC&Rs need to have some kind of language in them authorizing the board to fine members for violations before the board can developing a fining schedule. Without that language, the board is creating an authority for themselves that they don't have.

Alternatively... look for language in the CC&Rs that defers this sort of authority to your state's laws governing community associations (may have different laws for condos vs. HOAs). If your CC&Rs do have such language, look at the relevant state law to see what it says about ability to fine members. If it says nothing, then the authority isn't there.

If the board chooses to go ahead without any legal authority to do so, it's asking to be sued.

I agree.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By JohnC46 on 05/07/2021 10:27 AM
Posted By CathyA3 on 05/07/2021 5:54 AM
It would not change my opinion.

The CC&Rs need to have some kind of language in them authorizing the board to fine members for violations before the board can developing a fining schedule. Without that language, the board is creating an authority for themselves that they don't have.

Alternatively... look for language in the CC&Rs that defers this sort of authority to your state's laws governing community associations (may have different laws for condos vs. HOAs). If your CC&Rs do have such language, look at the relevant state law to see what it says about ability to fine members. If it says nothing, then the authority isn't there.

If the board chooses to go ahead without any legal authority to do so, it's asking to be sued.


I agree.

I said I agree but I do not believe fines for not attending an owners meeting can stand up. It would be laughed out of court and I expect court costs awarded.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By CleoD on 05/07/2021 1:09 AM
Jennifer and I are members of the same association. If I said to you that our Declaration says that we are all equal co-owners, the Articles of Incorporation say that the Association was formed for to manage our shared property and "to join in and agree to assume the burdens and duties" of managing the property, and the bylaws say that the Board is endowed with the authority to make rules and levy fines in enforcement of those rules - would that change anyone's opinion regarding the legality of the issue?
Case law and many HOA statutes hold that the Board is allowed to make "reasonable" rules pertaining to xyz in the covenants or bylaws. There is nothing in your Bylaws or covenants that require people to attend. Therefore, a rule requiring attendance or a proxy may not be lawfully enforced, and god help the board that takes this a step further and attempts to fine people for failure to attend the annual meeting or submit a proxy.

JenniferP9 and CleoD, your board likely thinks it can create and/or amend the covenants and/or bylaws at will. (It's a common mental illness of inept, amateur HOA/condo boards.) This is not so. The covenants and bylaws have exact procedures for amending. Alaska statutes may say even more on the subject. What this Board is doing is a de facto attempt to amend the covenants and/or bylaws without following the correct procedures for doing so.

Someone needs to urge this board to seek the advice of a competent HOA/condo attorney.

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