In Texas, can a POA issue fines for restriction violation if no fines are mentioned in CCRs

RogerJ1 (Texas)
Posts: 550

Posted:

In my POA, there is someone repeatedly breaking a restriction. Act in question is openly burning. The Board has sent the owner a letter about the violation. Also, the person has been verbally requested by the Board to stop. The CCRs do mention a fine. There is a section on violations, discussing notice, time to cure, etc. but no mention of fine per se. The Board wants to take action and issue a fine but there is opinion it dos not have authority to levy a fine since a specific fine is not mentioned in the CCRs.

This is in Texas, so Texas law will be applicable.

The long section in the CCRs covering violations does not mention a fine.

It seems silly to have restrictions if the POA cannot issue fines, since some will not comply when just asked not to do an act, but perhaps that is the situation.

Anyone know?

RogerJ1 (Texas)
Posts: 550

Posted:

Edit: I cannot edit the above message, but I meant to state: The CCRs do NOT mention a fine per se.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Roger

In order to fine, an association must have a fining schedule typically cover the amount of the fine and the repetitiveness of the fine. Then fine away. Associations get in trouble when fines are capricious.

BillH10 (Texas)
Posts: 1,217

Posted:

The guidance received from the attorney who represented the HOA in which we formerly lived in Plano was a resounding NO with respect to issuing fines without specific authorization to do so.

He told the Board there must be enabling language in the Declaration, something along the lines of "The Board of Directors may create, modify, and communicate to the property owners, a schedule of fines which may be applied to owners whose property is not in compliance with the following guidelines" or words to that effect.

He was asked if other words such as "out of compliance violation schedule" or some such could be used. His response did not change. He told the Board he would not represent them should a fine schedule be developed and enacted without an amendment to the Declaration to explicitly empower the Board to do so.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By BillH10 on 05/07/2021 1:36 PM
The guidance received from the attorney who represented the HOA in which we formerly lived in Plano was a resounding NO with respect to issuing fines without specific authorization to do so.

He told the Board there must be enabling language in the Declaration, something along the lines of "The Board of Directors may create, modify, and communicate to the property owners, a schedule of fines which may be applied to owners whose property is not in compliance with the following guidelines" or words to that effect.

He was asked if other words such as "out of compliance violation schedule" or some such could be used. His response did not change. He told the Board he would not represent them should a fine schedule be developed and enacted without an amendment to the Declaration to explicitly empower the Board to do so.

Our Covenants say:

"reasonable fines as may be imposed in accordance with the terms of this Declaration."

Our attorney told us, as it says, you can fine but you need a fining schedule and a copy mailed to each owner. He said you set the fines and time line do be "reasonable". Our fines start at $50 and double if the violation still exist after a period of time. Some timelines are defined like weekly on trash cans left out. All say a repeat occurrence at any time is an additional offence, not a first one.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By BillH10 on 05/07/2021 1:36 PM
The guidance received from the attorney who represented the HOA in which we formerly lived in Plano was a resounding NO with respect to issuing fines without specific authorization to do so.

He told the Board there must be enabling language in the Declaration, something along the lines of "The Board of Directors may create, modify, and communicate to the property owners, a schedule of fines which may be applied to owners whose property is not in compliance with the following guidelines" or words to that effect.

He was asked if other words such as "out of compliance violation schedule" or some such could be used. His response did not change. He told the Board he would not represent them should a fine schedule be developed and enacted without an amendment to the Declaration to explicitly empower the Board to do so.

Bill

If your Covenants need an amendment on allowing fines it should be a no brainer. Owners would most certainly approve it.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By BillH10 on 05/07/2021 1:36 PM
The guidance received from the attorney who represented the HOA in which we formerly lived in Plano was a resounding NO with respect to issuing fines without specific authorization to do so.

He told the Board there must be enabling language in the Declaration, something along the lines of "The Board of Directors may create, modify, and communicate to the property owners, a schedule of fines which may be applied to owners whose property is not in compliance with the following guidelines" or words to that effect.

He was asked if other words such as "out of compliance violation schedule" or some such could be used. His response did not change. He told the Board he would not represent them should a fine schedule be developed and enacted without an amendment to the Declaration to explicitly empower the Board to do so.

Thanks.

BillH10 (Texas)
Posts: 1,217

Posted:

John, two points

1. I agree completely regarding the schedule of fines, the attorney also counseled a process be developed and communicated. Generally, the process must describe what takes place when a compliance issue is noted, there must be documented intervals for the owner to address the issue, what happens if it is not addressed, when is the fine applied, must there be a hearing before it is and so forth.

2. I hope your comment regarding the owners was facetious "If your Covenants need an amendment on allowing fines it should be a no brainer. Owners would most certainly approve it." In the twelve years in which we resided in that Association many of us stood on our heads in attempts to have an amendment approved, to no avail. We have not lived in that Association since 2010 although we still have friends who do. Nothing has changed, members of the Board reach a point where they can no longer accept the criticism from owners who want something done about another owner's lack of compliance and resign. Those who want something done will not step up to the plate and assist the board in working an amendment through the process.

My wife and I formed our management company while we resided in that community. One of our business rules is we will not take on a client HOA which does not have an enforcement mechanism specifically authorized in the Declaration.

RogerJ1 (Texas)
Posts: 550

Posted:

I found a Texas HOA law help sit that appears to be a Texas government site (it ends with Texas.gov)

https://guides.sll.texas.gov/property-owners-associations/ccrs

It state:

" Texas law does not automatically give a property owners' association the right to impose fines or use a self-help remedy. These powers must be granted by the declaration of covenants, conditions, and restrictions."

and

" A property owners' association or some “other representative designated by an owner” may also file a lawsuit in court to enforce a restrictive covenant. According to Texas Homeowners Association Law, the end result most typically sought in this kind of lawsuit is something called “specific performance.” This means that one party is asking the court to order the property owner to do — or stop doing — whatever it is that is a violation of the restrictive covenant. Failure to follow the court's orders may result in a property owner being held in contempt of court."

So it looks like no is my answer, but any HOA/POA could seek a court performance ruling.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By BillH10 on 05/07/2021 3:29 PM
John, two points

1. I agree completely regarding the schedule of fines, the attorney also counseled a process be developed and communicated. Generally, the process must describe what takes place when a compliance issue is noted, there must be documented intervals for the owner to address the issue, what happens if it is not addressed, when is the fine applied, must there be a hearing before it is and so forth.

2. I hope your comment regarding the owners was facetious "If your Covenants need an amendment on allowing fines it should be a no brainer. Owners would most certainly approve it." In the twelve years in which we resided in that Association many of us stood on our heads in attempts to have an amendment approved, to no avail. We have not lived in that Association since 2010 although we still have friends who do. Nothing has changed, members of the Board reach a point where they can no longer accept the criticism from owners who want something done about another owner's lack of compliance and resign. Those who want something done will not step up to the plate and assist the board in working an amendment through the process.

My wife and I formed our management company while we resided in that community. One of our business rules is we will not take on a client HOA which does not have an enforcement mechanism specifically authorized in the Declaration.

Bill

I do believe an amendment allowing fining would easily pass as people like punishing wrong doers.

BillH10 (Texas)
Posts: 1,217

Posted:

John, an amendment requires 67% of the owners to agree. We just could not gather that much support.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By BillH10 on 05/08/2021 12:40 PM
John, an amendment requires 67% of the owners to agree. We just could not gather that much support.

I hear you but I still think if people believed such was protecting themselves, especially if some way of punishing renters was in there, it would pass.

Kind of like in order to punish an owner for the behavior of their renter and/or punish non rule abiding owners, we need this fining ability. Would not work in the case of where there were a lot of renters....LOL

My first action would be to have a creative thinking lawyer read the Covenants with an eye to looking for the right to fine even though the word fine might not be in there.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By BillH10 on 05/08/2021 12:40 PM
John, an amendment requires 67% of the owners to agree. We just could not gather that much support.

I hear you but I still think if people believed such was protecting themselves, especially if some way of punishing renters was in there, it would pass.

Kind of like in order to punish an owner for the behavior of their renter and/or punish non rule abiding owners, we need this fining ability. Would not work in the case of where there were a lot of renters....LOL

My first action would be to have a creative thinking lawyer read the Covenants with an eye to looking for the right to fine even though the word fine might not be in there.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Understand I like fining as a method to make violations go away. I do not advocate fining for income.

RogerJ1 (Texas)
Posts: 550

Posted:

Something in reverse. If one received a high fine ($200 per day which is the maximum permitted by the Texas Property Code) from an HOA that has no fine schedule, how would one defend oneself against the high fees if it is not possible to fix the violation in a quick matter (large scale physical damage to property and contractors and insurance company are prolonging repairs.) Any advice on how a property owner should handle that situation?

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By RogerJ1 on 09/28/2021 5:42 AM
Something in reverse. If one received a high fine ($200 per day which is the maximum permitted by the Texas Property Code) from an HOA that has no fine schedule, how would one defend oneself against the high fees if it is not possible to fix the violation in a quick matter (large scale physical damage to property and contractors and insurance company are prolonging repairs.) Any advice on how a property owner should handle that situation?

https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/312113/view/topic/Default.aspx

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By MaxB4 on 09/28/2021 7:30 AM

Posted By RogerJ1 on 09/28/2021 5:42 AM
Something in reverse. If one received a high fine ($200 per day which is the maximum permitted by the Texas Property Code) from an HOA that has no fine schedule, how would one defend oneself against the high fees if it is not possible to fix the violation in a quick matter (large scale physical damage to property and contractors and insurance company are prolonging repairs.) Any advice on how a property owner should handle that situation?

https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/312113/view/topic/Default.aspx

Thanks. New York is a different state but carries weight in case law as I understand it, but I suspect it would be expensive to get to the court level that would take NY case law arguments.