Board members impose HOA fines to penalize rulebreakers and discourage violations, but they can’t just ask for money and be done with it. There are certain steps and requirements that associations must follow. Going against these procedures will not only render the fine void but also expose the association to liability.
What are HOA Fines?
Homeowner association fines are monetary penalties that an HOA or condominium imposes when a resident violates a rule. For example, if a resident fails to maintain their lawn according to the community’s standards, the board can levy a fine after due process is followed.
Homeowners have an obligation to adhere to the rules and face the consequences of violations. If they ignore fines, it can lead to more serious penalties, such as legal action, liens, and even foreclosure.
Can an HOA Fine You?
Whether or not an association has the authority to impose fines hinges on state laws and the governing documents. In Maryland, Section 11B-111.10 of the Homeowners Association Act requires boards to meet certain requirements before levying HOA violation fines.
As for the governing documents, the CC&Rs and bylaws, in particular, should grant the association the power to fine owners for violations. These documents may also contain further details on the requirements and procedures boards must follow.
Are HOA Fines Legal? Understanding Due Process
In Maryland, Section 11B-111.10 outlines the specific steps that boards must take before imposing fines on homeowners. This due process also applies to other types of penalties, such as suspending voting rights or taking away other rights.
1. Written Warning
First, the association must send the owner a written notice that includes the following:
- What rule the owner allegedly violated,
- What they need to do to fix it, and
- At least 15 days to correct the issue without penalty.
If it’s a one-time issue, the board will warn the owner that future violations could lead to penalties.
Starting with a written warning gives owners a chance to remedy the situation rather than face fines. It is a show of courtesy and consideration.
2. Notice of Hearing
If the owner fails to fix the issue or repeats the violation within 12 months, the association must send another notice. This notice must:
- Explain the violation again,
- Tell the owner how they can request a hearing,
- Give the owner at least 10 days to request that hearing, and
- State the possible penalty.
A hearing allows the owner to present their side of the story, along with supporting evidence or witnesses. Of course, owners have a choice about whether to pursue the hearing.
3. Right to a Hearing
If the owner requests a hearing, the board must schedule it and give them at least 10 days’ notice. At the hearing, the owner may present evidence, speak, and question witnesses. This hearing typically takes place at a closed board meeting or executive session.
On the board’s part, it is important to document everything and record the outcome of the hearing. This creates a paper trail, which the board can reference for follow-ups or future decisions.
If the owner doesn’t request a hearing, the board can decide on the outcome at the next meeting. This includes deciding whether a violation has occurred and whether to impose a penalty.
Do You Have to Pay HOA Fines?
Assuming the board followed due process, homeowners must settle their fines. When they first buy a home in the HOA, owners agree to adhere to the association’s rules and face any consequences for violations. Failure to pay fines can result in further legal issues.
What Happens if You Don’t Pay HOA Fines?
When an owner refuses to pay fines, the association can impose late fees, take legal action, and place a lien on the property. This lien can even lead to foreclosure.
1. Late Fees
Depending on the governing documents, an HOA may add late fees to the fines that owners fail to pay. This compounds the amount owed and results in a heavier financial obligation for the owner.
2. Legal Action
An association may take legal action against the owner. Common practice includes suing for a judgment to compel the owner to fix the issue or pay the fine. If the HOA wins, the owner may also be ordered to pay the association’s legal fees.
3. Liens and Foreclosure
Depending on state laws and the governing documents, an HOA may be able to file a lien for unpaid fines. In Maryland, fines are not included in the portion of the HOA liens that has priority.
Liens make it harder for an owner to refinance their mortgage or sell their home. After all, nobody wants to buy a house that has existing debts attached to it. In extreme cases, the association can even initiate foreclosure proceedings to settle the debt.
How to Fight HOA Fines
The best way to avoid fines is to comply with the association’s rules. So long as the board followed due process and has the legal authority, HOA fines for violations should be paid and cannot be fought.
That said, if the owner believes they’re in the right, even after the hearing, they can appeal the decision. To do this, the owner should approach the board or manager and open a formal dialogue. If this does not work, the owner may challenge the fine in a Maryland court.
Common Mistakes HOA Boards Should Avoid
Imposing fines allows the board to discourage violations and maintain order in the community. Yet, fines can be difficult to defend if the board fails to follow the requirements and procedures set by state laws and the governing documents.
Here are the most common mistakes boards make that render fines void.
- Skipping the required notice process
- Not giving enough time to cure the violation
- Failing to offer a hearing
- Poor or vague violation notices
- Inconsistent enforcement
- No documentation or weak records
- Fining for unclear or unenforceable rules
- Imposing excessive or unreasonable fines
- Not following the HOA’s own governing documents
- Deciding the outcome before the hearing
- Failing to document the final decision
Are HOA Fines Enforceable? Answered!
Simply put, fines are enforceable provided state laws and the governing documents authorize them. Before levying a fine, associations must give notice, allow time to fix the issue, and offer a hearing. This ensures a fair and legal process, protecting both the HOA and its board from potential liability.
Majerle Management, Inc. provides enforcement assistance to HOAs and condo associations in Maryland. Call us today at (301) 220-1850 or contact us online to get started!
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