Assessing Fines

Ok, I need to find a picture of someone beating a dead horse as that is ME!!! But, I'm still not satisfied. I received an email back from our current lawyer that specializes in Estate Planning and Wills. I'm still waiting for the lawyer that specializes in HOA to respond but since it's a free consult, I'm thinking it could take awhile. Anyhow, our current lawyer states that:

"Section 24 allows for fines. Technically any homeowner in an HOA can sue another homeowner for violation. However, this could turn into a legal nightmare – thus the creation of HOA’s. HOA’s still do not take away the right of the homeowner to sue another homeowner, it just allows for other avenues to fix a violation without litigation. Fines are definitely allowed under paragraph 24. The assessment of fines could be laid out more clearly, but the fines are covered under this paragraph. The problem with getting very technical in the assessment of fines is if they change over time, then you have to do an amendment, which could be viewed by all parties as an administrative nightmare. This is why some by-laws and C&R are very vague – so they can be construed to the HOA side. This is a commonly seen issue with HOAs."

Here's section 24:

""24. If any person shall violate or attempt to violate any of the covenants herein set forth, it shall be lawful for any other person or persons owning or having an interest in any portion of said subdivision to institute and prosecute any proceeding in law or equity against such person or persons to restrain such violation or to recover damages or other compensation for such violations. In the event of such proceedings between any property owners affected by these covenants, the prevailing party as determined by the results of the litigation shall be entitled to an award of attorney fees and costs associated with such litigation. This provision specifically includes enforcement of unpaid Association assessments."

But, SC law reads in regards to assessing fines:

"Section 27-30-580. Unless a specific procedure for the imposition of fines or suspension of planned community privileges or services is provided for in the declaration, a hearing must be held before an adjudicatory panel appointed by the executive board to determine if any lot owner must be fined or if planned community privileges or services must be suspended pursuant to the powers granted to the association in Section 27-30-520(4) and (12). If the executive board fails to appoint an adjudicatory panel to hear such matters, hearings under this section must be held before the executive board. The lot owner charged must be given notice of the charge, opportunity to be heard and to present evidence, and notice of the decision. If it is decided that a fine must be imposed, a fine not to exceed one hundred fifty dollars may be imposed for the violation and without further hearing, for each day after the decision that the violation occurs. These fines are assessments secured by liens under Section 27-30-670. If it is decided that a suspension of planned community privileges or services should be imposed, the suspension may be continued without further hearing until the violation or delinquency is cured."

So, my questions:

1. Is my current lawyer correct in that section 24 allows for fines? It sure is vague. I guess the sentence "other compensation for such violations" covers it all.

2. If SC law requires a hearing (assuming I am reading that correctly), does that mean we have to do a hearing before we deliver fine letters? It says the hearing could be in front of the executive board. I've never heard mention of a hearing at our HOA meetings (board or members).

Heather,

Is section 24 in your governing documents or in SC state law? I couldn't find anything like it in SC state law.

I don't interpret that section the way the lawyer does either. The problem with a lawyer practicing outside of his/her speciality is that they may not be much better than a layperson in interpreting some laws. Lawyers who practice regularly in a certain area typically subscribe to services that keep them informed of court decisions of interest. Our legal system is based on common law and knowing how the courts have interpreted and applied the law in past cases in essential if one is to know how to interpret a given law, especially if it is vague.

Heather - doesn't your HOA have PROCEDURES when it issues a violation?
From the very first notice and then up to charging fines?

If not . . . IF it gets to a point where the homeowner has disregarded the violation and the Board want to assess fines or take away privileges, THEN it has to follow the state law UNLESS it has its own steps it takes.

to me, section 24 is simply saying what all courts uphold, plainly stated once "In the US of A, you can sue a ham sandwhich if you want."

It simply seems to give wording to the effect that all owners have a tortable interest in the association, and can, should they choose, sue (or seek other legal redress, if available) any other owner for violation of the contracts.

Doesn't mean they will win, or win anything if they do win, just that they have a right to seek legal redress against their neighbors... which, all people have, to some extent anyway. it doesn't mean you can fine your neighbor, just that you could sue them and take your chances in court.

I don't think that section 24 gives the HOA the right to impose a fine. I think it merely restates that anyone in the neighborhood can initiate court action to enforce the covenants (including the payment of assessments). It further states that if such action is taken, then the winner shall be entitled to their court costs.

That being said, I think that the section of the law that you posted does give the right to impose fines. If there is procedure spelled out in your declarations (covenants and possibly bylaws) then that procedure must be followed. If not, then it states that the executive board must hold a hearing.

"Section 27-30-520. Subject to the provisions of the articles of incorporation or the declaration and the declarant's rights therein, the association may:

(12) After notice and an opportunity to be heard, impose reasonable fines or suspend privileges or services provided by the association, except rights of access to lots, for reasonable periods for violations of the declaration, bylaws, and rules and regulations of the association;

(4) Institute, defend, or intervene in litigation or administrative proceedings on matters affecting the planned community;"

So, it appears that (12) above does allow for fines... after a hearing has been allowed. Very interesting. Wish my current lawyer knew how to find SC HOA online law like I do now. Guess that would be asking too much of her $250/hour charges.