Is assessing fines without hearing legal

Hi everyone,
I live in CA and I'm on the board for my HOA. Our current violation enforcement policy is:
1) First violation: letter sent citing violation
2) Second violation: letter sent to attend a hearing to discuss with the board, if not resolved at this time then a $50 fine is imposed and mailed out to homeowner
3) Continuing violation: letters sent to attend additional hearings to discuss with the board, if not resolved then a $75 fine is imposed
4) Repeat step 3) until violation is resolved

One of the board members wants to change things so that we fine in step 1). In other words he wants to be able to fine without giving the homeowner a courtesy letter or the chance to appear and discuss with the board. Needless to say I'm appalled by this, but there is nothing in the CC&Rs that seem to prohibit this and I'm concerned if other board members agree with him, in which case I'd have to resign from the board as I think that this seems to be completely illegal to me.

I was wondering what others thought about this, and if anyone is aware of any legal precedent or maybe something in the Davis-Stirling act that would make this kind of ruthless enforcement of rules and regulations illegal.

Thanks,
Bill Fleites

Roger, Does your governing documents or any other resriction state that you must have a hearing before you receive the fine?

Apparently Bill's don't. Mine don't and my POA don't, but both allow for appeal, is your's written this way?

Bill, I was just going to recommend you research Stirling-Davis since you're in California.

In Kentucky we do not have to give a hearing at all. Ever.

But our policy is that we send a courtesy letter first.

In fact, the subject line includes the phrase: Courtesy Reminder.

However in the closing paragraph we remind the homeowner that the specific violation, if not correct, carries a fine, and the fine will be assessed from the date of the first letter if not corrected within XXX days of the date of the letter.

Since we have added that language (only added it last summer) we have only had to send out 3 second notices with the fine statement.

Weird.

Hope the pattern continues!

I think I found my answer, and it is that in CA according to the Davis-Stirling Act it is illegal to fine without the first two steps I mentioned. On their website the following webpage details out the "Dispute Resolution Flowchart" and there they show "Step 1 - Violation Notice", "Step 2 - Hearing", and then finally "Step 3 - Fines Levied".

http://www.davis-stirling.com/MainMenu/MainIndex/DisputeResolutionFlowchart/tabid/1237/Default.aspx

Bill check this out. (Bold by me)

Civil Code §1363. Management Authority; Parliamentary Procedure; Notice of Meetings; Records; Member Discipline.

(a) A common interest development shall be managed by an association that may be incorporated or unincorporated. The association may be referred to as a community association.

(b) An association, whether incorporated or unincorporated, shall prepare a budget pursuant to Section 1365 and disclose information, if requested, in accordance with Section 1368.

(c) Unless the governing documents provide otherwise, and regardless of whether the association is incorporated or unincorporated, the association may exercise the powers granted to a nonprofit mutual benefit corporation, as enumerated in Section 7140 of the Corporations Code, except that an unincorporated association may not adopt or use a corporate seal or issue membership certificates in accordance with Section 7313 of the Corporations Code.

The association, whether incorporated or unincorporated, may exercise the powers granted to an association by Section 383 of the Code of Civil Procedure and the powers granted to the association in this title.

(d) Meetings of the membership of the association shall be conducted in accordance with a recognized system of parliamentary procedure or any parliamentary procedures the association may adopt.

(e) Notwithstanding any other provision of law, notice of meetings of the members shall specify those matters the board intends to present for action by the members, but, except as otherwise provided by law, any proper matter may be presented at the meeting for action.

(f) Members of the association shall have access to association records, including accounting books and records and membership lists, in accordance with Article 3 (commencing with Section 8330) of Chapter 13 of Part 3 of Division 2 of Title 1 of the Corporations Code. The members of the association shall have the same access to the operating rules of the association as they have to the accounting books and records of the association.

(g) If an association adopts or has adopted a policy imposing any monetary penalty, including any fee, on any association member for a violation of the governing documents or rules of the association, including any monetary penalty relating to the activities of a guest or invitee of a member, the board of directors shall adopt and distribute to each member, by personal delivery or first-class mail, a schedule of the monetary penalties that may be assessed for those violations, which shall be in accordance with authorization for member discipline contained in the governing documents. The board of directors shall not be required to distribute any additional schedules of monetary penalties unless there are changes from the schedule that was adopted and distributed to the members pursuant to this subdivision.

(h) When the board of directors is to meet to consider or impose discipline upon a member, the board shall notify the member in writing, by either personal delivery or first-class mail, at least 10 days prior to the meeting. The notification shall contain, at a minimum, the date, time, and place of the meeting, the nature of the alleged violation for which a member may be disciplined, and a statement that the member has a right to attend and may address the board at the meeting. The board of directors of the association shall meet in executive session if requested by the member being disciplined. If the board imposes discipline on a member, the board shall provide the member a written notification of the disciplinary action, by either personal delivery or first-class mail, within 15 days following the action. A disciplinary action shall not be effective against a member unless the board fulfills the requirements of this subdivision.

(i) Whenever two or more associations have consolidated any of their functions under a joint neighborhood association or similar organization, members of each participating association shall be (1) entitled to attend all meetings of the joint association other than executive sessions, (2) given reasonable opportunity for participation in those meetings, and (3) entitled to the same access to the joint association's records as they are to the participating association's records.

(j) Nothing in this section shall be construed to create, expand, or reduce the authority of the board of directors of an association to impose monetary penalties on an association member for a violation of the governing documents or rules of the association.

Hi Glen,
Thanks for looking into this.
Item (g) seems to be notice that when a board implements or changes a fine schedule it needs to be published to the membership. We've conformed to this.

Item (h) does speak to the having to the fact of a hearing before fines can be imposed.

Is there a webpage that has a downloadable verion of the Davis-Sterling Act ?

Thanks,
Bill Fleites

Oh my Bill,
I am afraid you are in for a struggle. Maybe the first or second time you try to explain some of the Covenants and Retsrictions to some apathetic Homeowner, he will label you a "communist" or worse, probably "dictator".
Keep your sense of humor, you'll need it.

Here are a few I found but I mainly use davis-stirling.com. They also have a weekly email newsletter which I find very informative; past issues are on their website.

http://www.internet-realty.com/Davis-Stirling.pdf

http://www.condoproperties.com/_docs/civilcode-SAMPLE.pdf

http://www.davis-stirling.com/MainIndex/DavisStirlingAct/DavisStirlingAct/tabid/791/Default.aspx

Bill,

For your late night reading from davis-stirling.com

Due Process
Penalties, such as fines and suspension of privileges, cannot be imposed against a member unless due process has been followed. This includes disciplinary action for repeat violations. "Due process" is procedural fairness in the board's decision-making process. The process must be fair and reasonable, and not arbitrary or capricious. Ironwood Owners Ass'n IX v. Solomon.

Elements of Due Process. The elements of due process include: (i) giving the accused notice of the alleged violation; (ii) providing a reasonable opportunity for the person to defend themselves; (iii) knowing the identity of the accuser; and (iv) giving the accused an opportunity to examine and refute the evidence. Applebaum v. Board of Directors (1980) 104 Cal.App.3d 648, 657; Carson v. Glass Bottle Blowers (1951) 37 Cal.2d 134, 144; Civil Code §1363(h); Civil Code §1363.05(b); Corp. Code §7341(c)(3).

When Violations Occur. Before imposing penalties, associations should do the following:
Notice of Procedures. The procedure for imposing penalties or suspending membership privileges must be in the governing documents. In the alternative, it must be annually sent to all members. Corp. Code §7341(c)(1).

Notice of Hearing. The person must be given written notice of the violation and hearing by personal delivery or first-class mail, at least 10 days prior to the meeting at which monetary penalties are imposed (unless the governing documents provide for a longer notice period). Civil Code §1363(h). For suspension of privileges, the notice must be at least 15 days prior to the hearing. Corp. Code §7341(d). The notice must be reasonably calculated to provide actual notice to the member. Corp. Code §7341(d). The notice must contain the following:

The date, time, and place of the hearing,
The nature of the alleged violation for which a member may be disciplined, and
A statement that the member has a right to attend the hearing and present evidence in his/her defense. Civil Code §1363(h). See sample notice.

Executive Session. Hearings should always be in executive session. Members have the right to submit their defense in writing rather than make an appearance before the board. Corp. Code §7341(c)(3).

Defense. The accused has the right to know the identity of his/her accuser and must have an opportunity to examine and refute the evidence. This may include questions during the hearing.
Decision. Unless the association's governing documents provide for a longer notice period, notice of the board's decision must be given by personal delivery or first-class mail within 15 days following the board's decision Civil Code §1363(h); Corp. Code §7341(c)(2).

We have found it is better to offer an alledged violator the right to request a Hearing rather than to always schedule a Hearing (unless the governing documents require otherwise). Some governing documents state that a Hearing shall be held. The problem with this procedure is that often the violator does not attend and therefore it has wasted the time of the Hearing committee members. So we have suggested to those HOAs to amend their document to only hold a Hearing if it is requested by the Owner. Following is an example:

A Violation Notice shall be sent to the Owner advising them on the controlling regulation which they are violating, a time limit for correction, and the right to request a Hearing to challenge the cited violation. To dispute a cited violation the Owner shall immediately submit a written request for a Hearing. Upon receipt of such a request, the Hearing Committe will schedule a meeting. The Owner shall be mailed a Notice of the Hearing date, time, and location. The Owner (or their representative) and the party bringing the charges will be allowed to present evidence and witnesses to support their position; and be offered an opportunity for rebuttal but not cross-examination. After the Hearing the Owner will be advised in writing of the decision.

Tino,

It means that whatever is stated in civil code 1363 does not take away the assn's right to impose monetary penalties. In other words, restrictions may be imposed on the assn in assessing penalties but they still have the right to do so.