3 Fundamental Steps A Board Takes To Enforce HOA Rules
Overview
For homeowners living in homeowners’ association (HOA) communities, one of the questions often asked is, what happens when rules are ignored? How do associations enforce the rules? Can an association penalize homeowners? How can members of the community respond to violation notices?
These are all issues that individuals who reside in communities governed by HOAs and those who are considering purchasing properties in such communities need to consider carefully.
When a property inside an HOA community is purchased, the homeowner automatically becomes a member of the association. With that membership comes the responsibility to abide by not only the Covenants, Conditions, and Restrictions (CC&Rs) but also the rules and regulations that the homeowners’ association has put in place.
Typically, included in the rules are provisions that require payment of dues and often other provisions governing noise, maintenance, property use, and a whole host of other restrictions.
Therefore, we always recommend that each homeowner read and become familiar with the rules and regulations adopted by the association to avoid problems. Doing this will also help homeowners become functional members of the community and keep positive relationships with their neighbors.
Before we go over the steps homeowners’ associations take to enforce the community rules, let us understand the association’s power and authority to enforce them.
Power And Authority to Enforce HOA Rules
The ability of a homeowners’ association to enforce its rules and what powers it has to do so will vary based on state law and also the powers that are included in the association’s CC&Rs, Bylaws, and other governing documents. Thus, some of the information mentioned below will vary depending on a variety of these factors.
Many community associations have a process in place that requires discussion of a violation at an HOA meeting before the association’s board can take action. Others might have a written notification process for members involved in a potential violation of the rules. The process an association takes will depend on what the enforcement policy of the particular association dictates.
When enforcing the rules, associations must apply consistent enforcement efforts against all community members. In other words, an association cannot selectively enforce rules against certain members and not others. Not only does this lead to bad feelings in the community, but it could also lead to legal action against the association. See, e.g., Bloch v. Frischholz, 533 F.3d 562 (7th Cir. 2008).
Courts have held that associations that inconsistently enforce their covenants effectively waive the right to enforce that covenant. Liebler v. Point Loma Tennis Club, 40 Cal. App. 4th 1600, 1610-11 (4th Dist. 1995); Prisco v. Forest Villas Condominium Apartments, Inc., 847 So 2d 1012 (Fla.App. Dist.4, 2003). We recommend that members read our previous discussion on this subject to gain a better understanding of selective enforcement by an HOA.
Here are the steps associations typically take to enforce HOA rules:
STEP 1: Associations Levy Fines To Enforce Compliance
The primary option associations use to enforce rules is the imposition of monetary penalties or fines. However, some states regulate how and when an association can penalize homeowners. For example, in California, members must be provided with a schedule of fines and fees in writing in advance, and they must be “reasonable.” The question of what might be reasonable in a particular circumstance may vary.
Importantly, associations must provide the homeowner with actual notice of the violation before a fine is charged to the members’ account. This due-process requirement also makes sense in that it gives members the chance to correct a violation before being fined.
Many association rules and regulations allow for a different fee schedule for repeat or habitual violators of the rules and regulations.
In Florida, for example, associations are allowed to charge a fine up to $100/day per violation with a maximum cap of $1,000. These fine charges can certainly add up in a hurry, which is why homeowners must receive an actual notice and the opportunity to cure or dispute an alleged violation.
There are also significant variations in state law as to whether fines for violations of the rules might become liens on a property. Some states, like Florida and California, prohibit the inclusion of fines or penalties in a lien and require HOAs to utilize a process such as an arbitration or mediation to resolve disputes over fines.
In many states, associations are free to file a lawsuit or other legal action in order to collect fines from homeowners. If a judgment is obtained, associations use traditional collection procedures such as garnishment of wages and bank accounts.
Step 2: Associations Use Internal Resources To Gain Compliance
Depending on what the association’s governing documents authorize, associations may utilize available resources to gain compliance with the community rules and regulations. These options typically include:
Suspension of Voting Rights
HOAs may choose to suspend a member’s right to vote until he or she remedies a violation or cures the delinquency if provided in the association’s governing documents.
Self-Help
One question often asked by homeowners who are part of an HOA is whether the association’s board can use self-help to address a rule violation. This enforcement tactic will also depend on state law as well as the association’s governing documents.
Often associations can use self-help to repair something that is a health or safety concern and bill the homeowner for it. Typically an advance notification to the homeowner would be required before self-help can be used.
Restriction of Access to Community Amenities
It might also be possible depending on the association’s documents that if the member fails to pay assessments that access to community amenities such as a swimming pool, exercise room, or other areas might be limited. Again, this would also be dependent on the association’s governing documents.
Utility Shut-Off
If utilities are provided as part of an assessment, that can also be an option to utilize utility shut off to ensure compliance with the payment. However, that is also an area that often involves a review of state law, which has additional protections.
The other consideration also is whether the property could be adversely affected by the utilities being turned off and whether that would serve the best interests of the community.
Step 3: Associations File Legal Actions To Enforce Compliance
As mentioned above, sometimes legal action is required in order for an association to enforce rules and regulations against the members. However, in most states, some processes and procedures try to keep such disputes out of court by requiring mediation or arbitration as an option. However, sometimes at the end of the day, a court battle will result.
In some cases, if a member fails to cure a violation after ample notices, an association may choose to file an enforcement action against the member to gain compliance via an injunction order from the court.
Moreover, in many states, if a member fails to pay fines when due, an association has the authority to file small claims or other legal action against the homeowner.
All of this translates into a straightforward concept – both the member and the association should find other ways to resolve fines and other disputes that do not involve legal action.
No one enjoys spending time and money litigating over this type of issue, and frankly, most judges are not huge fans of it either. Thus, both sides are well served to avoid litigation.
Association’s Duty to Maintain the Community
Another related issue arises when the association fails to provide the services or maintenance that it has agreed to provide to its members in exchange for their assessment payment.
Typically the association’s CC&Rs specify what items must be maintained by the association, which may include maintenance of common areas, pools, snow removal, roof and elevators of condominiums, and other related items. If the association fails to maintain the community as required by the association’s governing documents, the member may have a cause of action for breach of contract against the association.
Most association documents will provide a process by which members must notify the association of a failure to provide the agreed-upon services. This lack of maintenance has often arisen on a large scale basis when there have been communities affected by foreclosure and abandonment. Sometimes the association essentially ceases to operate or does not have sufficient funds to provide the services.
It is important to note that homeowners cannot withhold or offset payment of maintenance assessments even if the association fails to fulfill its obligations to maintain the community. This is another reason why homeowners should practice great caution when considering purchasing a property governed by an HOA.
Conclusion
Rules and Regulations in an HOA community form an essential part of making the community experience good for all members. A thorough review of what the association’s governing documents require from members is an excellent place to start.
After that, understanding the rights and responsibilities of homeowners and associations, how the rules can be enforced, and also what members can do if they are not receiving the proper services from the association are all of critical importance.
Ultimately the goal is to have a trouble-free and smooth living environment that works to preserve the value of the properties in the community. With everyone’s combined help, that can be a more realistic goal.
