All Things Enforcement:

Follow Up to June 27, 2024 Board Basics (Part 2) webinar on Rules and Enforcement

Authors

Susan M. Hawks McClintic, Esq. CCAL	Rhonda R. Goldblatt, Esq.

 

Question: If a prior board of directors failed to enforce the governing documents, can the current board take enforcement action?

Answer: Yes. An association is obligated to enforce its governing documents, and may expose itself to liability for failing to do so.  A current board is not doomed to compound a prior board’s mistakes by re-making them.  The current board can and should enforce the governing documents.  That being said, boards may want to consider notifying the membership that it will enforce the governing documents more “strictly” moving forward, so that members are aware of the upcoming change. Circumstances permitting, it may also be appropriate for a board to grant a brief grace period before stricter enforcement of the CC&Rs begins. This may help re-enforce the message the association’s goal is compliance, not punishment.  Note that this language avoids admitting that the association failed to enforce its governing documents in the past, which is a good thing.  A homeowner could use the association’s admission that it failed to enforce the governing documents in the past as an argument that the association cannot enforce the governing documents in the future, so it’s best to avoid admitting that.

 

Question: If a lawyer cannot represent an association in to collect a member’s unpaid fines, how can an association get competent representation?

Answer: Attorneys generally cannot represent parties in small claims court.  That being said, attorneys can still help prepare parties for small claims court, including preparing a complaint, submitting evidence to the court, and putting together a memorandum summarizing the party’s best arguments and points to use at the hearing.  Management staff may be willing to represent an association in small claims court, which may be helpful to boards.  Finally, many small claims courts have online resources, as well as a help line to speak with an advisor who can answer questions about the small claims process.

 

Question: Can the board still fine a homeowner if the homeowner cures a violation right before their hearing?  What if the homeowner has been called to hearings many times for the same violation, and cures the violation right before the hearing every time?

Answer: The point of fines is to gain the homeowner’s compliance.  As such, when a homeowner has cured a violation, the board should carefully consider whether it makes sense to levy a fine or another type of discipline.  However, when a homeowner routinely violates the governing documents in the same exact way and then cures the violation right before the hearing as a pattern, it very well might make sense to levy a fine.  In that case, the fine is being levied in order to gain the homeowner’s continued compliance.  In other words, breaking the pattern.  The board can also consider when deciding whether to fine a homeowner (or waive a homeowner’s fine) whether the association incurred any costs to bring the homeowner into compliance. If the association incurred attorneys’ fees or other administrative costs, it might be reasonable to fine the homeowner (or refuse to waive their fine).  Finally, some associations we represent have had good experiences with gradually reducing and ultimately waiving a fine to acknowledge a homeowner’s continued compliance. As above, this approach can be used to re-enforce the message that the association’s goal is compliance, not punishment.  It’s ultimately a business decision.  However, boards should be careful to treat homeowners consistently in enforcing the governing documents, including when deciding whether to refrain from fining or waive a fine.

 

Question: How can you amend an association’s fine schedule?

Answer: Fine schedules are typically adopted as an association rule, so amending the fine schedule is a rule amendment.  Civil Code section 4360 requires an association to send out a proposed rule amendment to the membership for at least 28 days.  The notice must include the text of the proposed amendment, along with the purpose and effect of the proposed amendment.  The board must then decide whether to adopt the proposed amendment at a noticed meeting after considering any homeowner comments.  The board must finally provide notice of the amendment within 15 days of the meeting.  You can always reach out to your friendly community association counsel for help with the rule amendment process.  We don’t bite!