Smart Board & Property Manager Legal Guide: Fining Procedures For Condominium and Homeowner Associations

So this is our area. This is what we do all day, every day. We get a lot of questions about fining from our clients and one of the reasons we get a lot of questions, it's actually more complex than initially you might think, particularly if you're new to a board or a new volunteer to the community association world. Fining sounds like something that may be very helpful in certain scenarios. Maybe it is, maybe it isn't. Maybe you find out it's more complex. Maybe you find out the violators are playing some games.

So we're here to go over these big picture issues. I'm already seeing a number of questions about specific instances that can or maybe not can be fined for and how to deal with them. Some of those are going to be document driven potential violations. So I want to back up big picture before we get started and say that this is meant to be a review of the statutory requirements. That's what we're going to be doing here, particularly heavy emphasis on the Homeowner Association statutory requirements because this last year in the summer, the legislature added a lot of very detailed restrictions and requirements to that part of the statute that they did not add to the condominium statute. We're going to go over both. Homeowner associations and condominiums but the homeowners is going to be very detailed, so be ready for that. We are also going to try to provide some practicalities as we explain these convoluted statutory processes that help with a step by step, but it is going to be very detailed, so please do listen to the process.

Next slide, please. This is going to be our agenda. I'm going to start out with a little general overview of some of the shared concerns that come with both condos and HOAs, and then going back to Mark's question about a fining committee. Next up will be a discussion by Jennifer Hicks on the fining committee. Then we're going to go over the specific statutory fining processes with Jim Turffs going over the homeowner associations, and then I will go over the condominiums.

At the end, we're going to try to address some alternatives to fining, but there's not going to be a whole lot of time, candidly, as Alan was saying. There's a lot of details in this presentation, so we're going to try to hit some of those points, but I'm quite confident you're going to come away really feeling like you've got a lot of information about fining and maybe just some touches on other thoughts. So just keep that in mind. We only have so much time in our less than an hour here.

Next slide, please. Okay, general fining guidance. Both condominiums and homeowner associations have the statutory right to levy fines against owners under certain circumstances. It is a statutory right. So if your government documents are quite old or maybe silent on this issue, you are still going to have a statutory right to follow this fining process. So that's why we are going to go over the statute because what is important about that is that this next statement here on this particular slide is that the fining process must comply with those statutory requirements. It must comply. There is actually case law that discusses that there is a due process right, a constitutional right that owners have to be fined properly with due notice and to be aware of the process. So to the extent that there is almost always a process where you have to send the owners certain notifications and do so timely, fining is really a high threshold.

If you are required to send out your notice in 14 days and you send it in 13, you did not complete the statute, your fining can be challenged on its face regardless of whether the person did or did not even do the action. You have to follow these processes. Now that being said, there could be some processes that are additional in your governing documents that add burdens to what the statute already says. So we highly encourage associations that want to do fining to make sure they have a fining policy, that that policy is compliant with current statutes, and if you're a homeowner association and you have not updated your fining policy in the last year or so, you are not up-to-date with the statutes.
The fining policy also, when reviewed or helped assisted with counsel, can make sure if there's any extra qualifications or requirements in your governing documents, that that policy does cover all those bases so that your board and your fining committee both have a policy they can follow and feel confident as long as they have met those deadlines and those notice requirements and the policy for fining itself that they are complying with those minimum requirements and that the fines will be properly processed.

Another point to remember. Fines are meant to be punitive, coercive. They are meant to bring a result. They're meant to stop bad behavior. They are not income, they are not revenue. They are not meant to make money for the association. As a matter of fact, if a fining issue goes in front of a judge, if it's contested in court, a judge is likely not to look favorably on an association that is using fining to make money as opposed to using fining to try to stop some bad behavior.

Next slide, please. Okay, so both homeowners associations and condominium associations can levy fines against owners for violations of the governing documents and they can also levy fines committed by owners, their tenants, guests and invitees. So you are not necessarily just limited to fining the owner. You may be able to also fine the tenant. You may be also be able to fine a guest. So that is something that, again, if you have a good fining policy, it will lay out those options.

That being said, the owner is ultimately responsible for the persons who are committing these violations because they are there with that owner's permission. So you are going to want to seek out fining from the owner, but maybe also with tenants, guests and invitees.
Okay, so fines by statutory default may not exceed a $100 per day up to a maximum of a $1,000. Most associations do like to follow that $1,000 cap at a $100 a day, but that doesn't mean you have to. You can fine $50 a day, you can fine $25 a day as long as you don't exceed that maximum $1,000.

Not condominiums. Condominiums are capped at that $1,000 but homeowner associations have the option to have in their documents a higher fining amount. So to the extent you've heard about maybe some of your neighbors or seen in the news or heard stories about homeowner associations that have fines that are maybe three, four, $5,000, that is not going to be a condominium in Florida if they're following the law, but could be a homeowner's association if they have that authority in their documents to charge a fine higher than a $1,000.
Now that being said, fining is again meant to persuade people to not behave badly. It is not meant to make income, and if you start as an association fining large amounts against owners, they're more likely to potentially contest that amount, you're more likely to have some legal battles, maybe run up some expenses. So I generally advise that fining amounts do be kept closer to a $1,000 and certainly not pushing $10,000 like I have seen some homeowner associations do because you can end up in an expensive legal battle. Again, fining is meant to be something that is not a moneymaker. It is meant to stop bad behavior.

We also get asked about successive fines. Well, we already fined this person for this event, action, whatever it was. It's still not been rectified or they've done it again. Can we fine again? Potentially yes. That is going to be a factually driven question, but there is no general blanket in the statute that says something that once someone has done something, you can't necessarily fine them again. So that's going to be a factually driven question, but yes, you do potentially have that option.

So with that opening, I'm now going to turn it over to Jennifer Hicks to discuss the fining committee setup.

Jennifer Hicks, Esq.:

Thank you, Cindy. So the fining committee is required regardless of what your documents say at this point, and it is also one of the hardest parts of the fining process other than, as Jim will go into later, the process the owners can cure. And it's hard because your fining committee or your violations committee, your hearing committee, whatever you call this committee that makes the decision to levy the fine, it must consist of at least three members. Your members of this committee are appointed by the board at a board meeting, but they may not be any of your directors, your officers, your employees; so your manager. Nor can they be the spouse, parent, child, brother, sister, any of the relations of an officer, a director, or an employee.

This is where it gets hard. As someone else said earlier this morning, you are a volunteer board. Your committee, whatever the name may be, is also going to be a volunteer committee. It is sometimes very hard in communities, especially very small communities, to fine three people unrelated to the board to help. Unfortunately, it is a requirement, it is statutory, but the statute also does not provide any leeway for small communities. I know we have a small community of about 10 units, so three are around the board, three are in arrears, and they don't have enough people to have a fining committee. So it is difficult. There is no leeway unfortunately, and it is a requirement.

Next slide, please. So what is this committee going to do? You're lucky enough to find three people who are willing to do this. What's their job? Their job and their sole purpose really is to approve or deny a fine recommended by the board. So they don't get to change the amount of the fine or impose a different kind of penalty. They get to say yes or no to the fine instituted by the board, and that is their sole decision and that is their sole authority in this place. The fining committee meetings may be held by phone or electronic means, so you can have it by Zoom. And owners have the right to attend telephonically or by electronic means. So even if your fining committee is meeting in person, your owners have a right to call into that meeting or to attend by Zoom. They do not have to attend in person.

And while it's not strictly required by statute, we strongly recommend that your fining committee keeps meeting minutes. This is so if you fine one owner for something but not another, you have the meeting minutes to go back and say why that happened, and it's a level of protection for your owners and for your committee.

And finally, if your association cannot assemble this fining committee, you can't find enough members that aren't related to the board, you cannot levy fines, period. There is no, oh, we can do it this way because we're a small community. No. No fining committee, hearing committee, whatever you want to call it, no fines. That's the end of the process for you. If you don't have a fining committee, you have no fines. And I say that a lot because at the end of the day, we've seen it where a fining committee isn't available, the doesn't have one, and they try to levy fines, and it's just not possible at that point.

So like I said, your fining committee is going to be one of the most important parts of your fining process, and I think that goes to Jim to walk you through the process.

James "Jim" Turffs, Esq.:

It sure does, and you get to see Jim Halpert from The Office there showing you that friendly neighbor who loves to peer out his window at everybody to make sure they know exactly what's going on in the community and then ratting them out to the board for fining and punishment. Fantastic look.

So I'm going to talk to you guys about the actual process that goes into fining. What are the step-by-step processes that you need to go through to maintain compliance with the statute and make sure that your fines are even effective? I'm going to do that by explaining the new HOA fining method. Now, there's a little bit of difference here between what HOAs and condos have to do in the fining world. Why there's a difference, I have no earthly idea. Frankly, condos provide far fewer options for owners to cure their violations and avoid fines where HOA fining now goes very far out of its way to make sure that owners can cure their violations. Probably more legislatures live in HOAs than they do in condos, I'm guessing.

But anyway, I'm going to describe the HOA fining process and then we'll have, I believe it's Cindy, briefly talk about the small differences between condos and HOAs. So treat this as if it all applies to you, and then we'll go ahead and cut out some exceptions at the end.
Where do we start? We start with a violation. Somehow your owner or their guest, invitee, tenant, somebody who's on your premises with their permission have violated your governing documents. You've got a rule that says you have to keep your yard in a neat and clean condition. It has to be trimmed this way. The bushes can't be taller than that. They're not doing it. They become a nuisance. They're playing loud music all night and it's disturbing their neighbors. They're violating your governing documents.

Of course, from the violation that notice has to make it to the board, whether that's your CAM doing a drive-by who sees some sort of inappropriate structure in their front yard, or whether it's a neighbor complaining about the loud music. Somehow the board has to become aware of the violation. That can be done through director observance, neighbor report, or CAM drive throughs, whatever it is. You can't just jump to fining at that point. So the board has to be alerted to the presence of the violation, and generally it's a best practice to send a notice to that owner saying, "Hey, you're violating the governing documents. This is what the documents say. This is how you're breaking them. This is how you stop breaking them, and you need to stop breaking them in a reasonable amount of time."

If you have pictures of a physical violation, that's helpful. The more evidence you can present in that letter, the better. But basically the first step should be that you alert them and give them a chance to stop breaking the rules. The statutes do technically allow you to jump right to fining and go right to the board. The CAM can say, "Hey, they've broken the rules," and the board can say, "All right, we recommend this fine. Send it to the fining committee." You do that, you're going to get a bunch of grumpy owners showing up at a fining committee going, "We didn't even know we were breaking the rules. How can you fine us?" Like I said, it's a best practice and honestly, you're probably going to have more success by sending those violation letters than by jumping right to fining. And so you can take a look at slide three there, and of course this presentation will be available on our website in the following weeks so you can always come back and view these slides in this presentation at a later date. Still stay on that slide for a second.

So let's assume you've sent out that letter. You've sent out the warning letter, that violation letter that says, "You've broken the rules and this is how." And it's specific for HOAs that you need to detail what portion specifically of the governing documents they violated. This protects both you and the owner. It gives the owner very clear indication of what they're doing wrong and what the actual rules are, and it prevents the board from trying to violate somebody for something they may think is a fineable offense, when in fact it's not exactly how it's worded in their governing documents.

So now for HOA specifically citing to the provision of the governing documents that the owner is violated is key. You've sent out your letter and you said, "You have 15 days to trim your lawn," or, "You have 30 days to fix your roof." Whatever your notice says, whatever that reasonable time limit to cure the violation happens to be, the owner still hasn't done it. That's when you really want to start looking at fines. That's when the board should meet at a meeting and say, "Hey, this unit is in violation because it's been doing this for this long. We recommend a fine of whatever it may be, $75 a day for five days because it was a five-day violation," and $75 is reasonable for whatever they did.

You shouldn't just necessarily throw that maximum of $100 a day. I know one of our earlier presenters talked about that. But I want to hit that again. Just because you can find somebody a hundred dollars a day for up to 10 days doesn't mean you have to. Fines should be reasonable, and as Cindy mentioned at the outset, they should be designed to coerce those owners to fixing their problems or at worst, to punish them for something that they've done. So once the board has met, that violation has been confirmed, warnings have been sent, the owners refused to participate, now it's time for the board to meet and say, "Here's your fine." And once they've set that fine, they transmit it to the fining committee. Now we can go to the next slide.

And so at that point, a 14-day hearing notice needs to be sent. So the fining committee has the board's recommendation, the fining committee or the board; probably your fining committee, since they're usually in charge of when they meet; is going to send out a notice at least 14 days in advance of the hearing. It says, "Hey, you've broken the rules. The board has recommended a fine. This is the rule you've broken." Again, we're back in there saying again, "This is the rule you've broken. This is how you've broken it." And if possible, if the violation is still ongoing and is capable of being cured, you have to tell them how. Some violations may not be capable of being cured at this point.

There's been a lot of talk about parking violations in the chat. Parking is an extremely bad example right now because of the recent statutes, which limit a lot of associations ability to enforce parking restrictions. But from a purely hypothetical standpoint, let's presume that your association does have the ability to fine for parking on the street after dark. You probably don't, but let's pretend you do. In that instance, they did it for five days, you warned them. They did it for another five days after you warned them. You can probably fine them for those five days and if they've stopped at that point; you still want to punish them, but they've stopped parking on the street after dark; you don't have to keep telling them how to cure that violation. You can go back, you can fine them for what they did and say, "You do it again, you're going to be fined more." That's one way to handle that situation in a purely hypothetical world.

If you're considering parking violations for your community, talk to your attorney. You frankly may not really have that authority anymore regardless of what your documents say. And if you do, you need to be very particular in how that's handled. So work with your attorneys and don't rely on my general advice if it comes to just parking restrictions.

Back to the hearing though. The fining committee says, "We're going to have this hearing for you." It has to be at least 14 days in advance. For HOAs I believe it cannot be more than 90 days in advance. So you have a 14 to 90-day window. I recommend you give at least 15 days notice just so you avoid any accounting or math errors. And then the owners, they have the option to attend that hearing. If they want to attend and give some excuse or mitigating factor or whatever it happens to be, they do that at the hearing. But the notice itself, again, the exact rule that's being broken, how it's being broken and if it can be cured, how it's cured.

Jen mentioned that owners have the absolute right to attend fining committees by virtual appearance. So your fining committee probably still should offer an in-person meeting place for its meetings. It could technically be purely virtual if you're governing documents allow for that and you've taken the necessary steps to make that possible. But by and large, you should have a physical component, but now you need to be available to let the owners appear by telephonic or Zoom. It doesn't have to be Zoom. You can set up a conference call if that's what you want to do, but they need to have some remote appearance option available to them because they have the right to demand that.
Now, again, while not specifically required by the statutes, the best practice, in order to avoid these challenges coming from disgruntled owners who have been fined down the road, you should consistently at every step of this process keep referencing the specific provision of the declaration, bylaws, rules. Whatever violation it is you're accusing them of breaking, you should consistently keep telling them what that is and how they've broken it.

And again, as I mentioned earlier, if you have photographs of, say, lawn maintenance violations or something like that, the more evidence you can send them and the more specific you can be about how they can fix it, the better. Because for HOAs, as you'll find out, owners have a big opportunity to cure those violations before you can actually collect the fines from them.

Now we can go to the next slide since I've already talked a bit about appearing via telephonic or electronic means at the fining committee hearing. So the owners do show up whether in person or via electronic means, and they're allowed to address the committee. The committee may be talking about multiple fines that night as they go through each unit. That owner who's been given specific notice, they've been mailed notice saying, "Here's your 14-day hearing notice. It's been mailed to you, it's been hand-delivered." Whatever method it got to them.

They're there and they say, "Hey, fining committee, this is why my roof has been tarped for the last six months. It's because I'm fighting with my insurance company and it's evidenced in my insurance case. I literally cannot repair my roof until the insurance case is settled." That's a perfectly valid excuse. And at that point, the fining committee could say, "All right, fine, no fines, but you need to keep ..." Well, all the fining committee can say is, "No fine."That's it. The person goes forth, no fines are levied, everybody's happy.

The flip side of that is maybe they come in and say, "Fining committee, I didn't maintain my lawn because I hate you guys." Well, hey, you know what? Probably true, but not really a great excuse. And so at that point, the fining committee can say, "Too bad. Now you're being fined."
And as Jen mentioned and as is worth mentioning again and again and again, your fining committee's role is only to approve or disapprove the fine. I saw a question in the chat about whether a fining committee can delay compliance or can modify the fine in some way. No, they can't. If the fining committee wants to give the owner a greater ability to cure their violation, all they can do is deny the fine and put it back in the board's court.

By and large, that's what they're there for. Your fining committee are neutral homeowners. They're not supposed to have any personal ties to directors. So they're supposed to be a fair, impartial hearing committee that can talk to your owners and say, "These are your violations. We understand. We want to give you context. We want to give you the chance to explain why you shouldn't be fined." And if they do it, that's the fining committee's job to say, "You've convinced us. You're not being fined." Or, "Hey, you have no good excuse. You have to be fined." And again, the committee can't do anything else. Just think of them as the Caesar of fining in your committees. It's thumbs up, it's thumbs down. That's it. Next slide.

So let's go through a world where a fine was actually approved by the committee. Board said they're going to be fined $50 a day for seven days. The fining committee had the hearing, owner didn't present a good evidence, and they say, "Great, you're getting that fine. It's $75 for five days for your violation." Within seven days of the fining hearing, which of course have that 14-day notice. All these time limits are out there and they're very important time limits. You cut any of these short, your fine is not going to be enforceable." So again, very technically detail oriented here and very strictly compliant processes required for your fines to be valid.

So fining committee hearing seven days. Within seven days of that hearing, the fining committee or the board ... Or I'm sorry, the fining committee, not the board, shall provide written notice to the owner at their designated mailing or email address if they've consented to email notifications and provided that to the association. And if applicable to any occupant, licensee, invitee, et cetera, who may still be on the premises and related to this. If you send that notice after seven days, it's likely your fine will be invalid. So it's important for the committee to send those notices out within seven days.

That notice has to include a description of the committee's findings. "We met on such and such a date. We held a hearing. At that hearing the fining committee determined that we're going to levy a fine of $75 a day for five days."

Also at this point, if the violation is still curable, if you're still talking about an ongoing law and maintenance violation, for example; their lawn is overgrown, whatever; that's still something they can fix while this fining process is going on. And if that's possible, if it's a situation that can still be fixed, even this notice must explain to the owner how they can fix it. So yes, we've levied the fine $75 a day, five days, fining committee hearing, this is what you violated. You can cure this violation by mowing your lawn and trimming your bushes to this height." And then finally, the seven-day post-hearing notice also has to include the payment date. Okay. Just checking if we can go to the next slide. Yeah, we can go to the next slide.

The date that that fine is due for an HOA; and this is going to be one those things that is different for a condo; but for HOAs, send that seven-day letter after the hearing, within 30 days of that letter, the fine has to be paid. Or I'm sorry, at least 30 days after that letter, the fine has to be paid. So 14-day notice, hearing, within seven days of the hearing the notice to the owner, and that notice says, "At least 30 days from the date of this letter you have to pay your fine." So day 31, day 35, whatever date the association wants to affix to it, that's fine. It just has to be at least 30 days from the date of the post-hearing notice.

If you're not already confused, I'm surprised and I expect you to be confused because the statutes and the legislature have made this an absolutely insane process. There are so many little restrictions here. I think one takeaway you may have is that fining is maybe more problems than it's worth. Some cases that's very true. But at any rate, you set the date by which the fine has to be paid and the owner still hasn't paid it. Then the fining committee can engage an attorney to collect the fine.

Up until this point, up until the fine was due and not paid the association cannot charge attorney's fees to the owner for any of this. So if you're working with your attorney to prepare your violation notices or to assist you with investigating or understanding the nature of the violation, those are all attorney's fees that are going to be paid by the association. Only if a fine is levied and it remains unpaid after the due date, can the association start trying to get fines from the owner and those fines are going to be limited to the cost of collecting the fine itself.

Okay, and so again, we've talked about HOAs. Fines totaling less than a $1,000 in the aggregate may not become a lien against a parcel. So if you've levied a fine for anything less than that full $100 a day for 10 days hitting a $1,000 ... And remember HOAs in their governing documents can increase that limit. I don't recommend increasing it too far. I had an association that had a $30,000 fining limit, which just led to massive fines against owners that then became completely unpayable. Just doomed themselves in the long run. But again, let's work on the statutory assumption that you have your $1,000 maximum.

A $999.99 fine cannot become a lien. A $1,000 total fine can become a lien and liens can be foreclosed on if the owner doesn't pay. So that goes back to step nine on there. If the date for the owner to pay the fine has come and gone and that fine is at least a $1,000, the association can hire their attorney to go in and file a lien foreclosure lawsuit against that owner. Requires filing a lien, a bunch of pre-suit hurdles, but those types of attorney's fees and costs are going to be attributable to the owner in the long run So that's a method that you do have available to you. Next slide.

And this is going to be the last slide for me before I give Cindy a chance to cut out for you exactly the differences between this process and those few things that condos do a little bit different. But as of July 1st of this last year, when this last slate of laws came through and became effective, homeowners association owners; this is different than condos; but for HOAs, your owners have up until the day that fine is due to cure the violation. And if they cure the violation, assuming it was curable at this point, if they cure it before the fine actually became due, they don't have to pay the fine.

Think about that. They have a violation. They have the time it takes the violation to be noticed, reported to the board, for the board to meet and recommend a fine, for it to be recommended to the fining committee who then sends at least a 14-day notice of the hearing. Then within seven days after that, they send another letter saying, "You have at least 30 days to pay your fine." Throughout that entire process, even after the fine has been recommended and that seven-day letter has been sent to the owner, the owner can still cure the violation and get away without paying the fine.

So like I said, if you're not starting to think that fining is more trouble than it's worth, just think about how long it is that that owner gets away with that violation and certainly can milk this and just keep poking the bear right up until that last day and then they cure it. They go mow their lawn, they go and trim their bushes. They do whatever it is. They have to pressure clean their driveway. Whatever it is they have to do, they do it that last day. It's always.

So it's not to say fining is not proper in any circumstance, but measure out how much of this trouble is worth for you for certain violations. And as we'll talk about toward the end here, there are other options you may want to consider instead of fining for these reasons. And again, the recent laws have also eliminated or limited an HOA's right to levy fines for certain things. Where leaving your garbage cans out used to be a pretty common basis for fines, that's now being changed by statute. They have to be given specific notice. They have to leave their cans out for a certain period of time and then be given a certain notice. And basically, as the math works out for garbage can violations, it's almost completely unfinable because by the time all the notice and warnings and all that stuff is done, you're back to the next garbage collection day. Garbage receptacles probably can be left out on the curb for quite a period of time now.

And also, leaving holiday decorations up. Again, a lot of associations had rules that said decorations have to be removed within a certain period of time after the holiday ends. Christmas decorations have to come down within 15 days of Christmas or whatever it happened to be. Again, there's an additional warning element now. The owner has to be provided with advanced warning that, "Hey, you've left them up." You have to wait for a week after that deadline to pass before you can even go to the owners about it, provide them their notice. And so again, a little bit harder to levy fines for Christmas decorations, Halloween decorations, whatever decorations they may be or garbage cans.
And so with that, I think we kick this over to Cindy and she can talk to you about the five or so things that condos do a little bit differently here.

Cindy Hill, Esq.:

I can see we have a lot of questions, but I think some of them are also connected to how condominiums are a little different than HOAs. Before I get into condominiums though, I do want to say that earlier in the presentation there were some comments about, "Well, do we have to call it a fining committee? Can we call it a violation committee? Can we call it a hearing committee?" I want to be clear, the statutes don't give a designated name for the committee. To the extent we talk about a fining committee, you can call it a hearing committee, you can call it a violation committee. There's not a designated name. What matters is that that committee follows the processes that Jim just described and that Jennifer also went over.

And looping back to that question that came up earlier in the presentation by the gentleman who spoke, the members are your fining committee are appointed by your board. That being said, you may have some restrictions in your particular documents about authority that a president may have in lieu of what the board can do. So if you have questions about a conflict between the president maybe appointing the committee members or the board doing as a board decision, you're going to need some legal counsel as to what your documents advise.
So condominiums. If you're sitting in this presentation and you're in a condominium and you're thinking, "Oh my goodness, if I want to fine, I'm so glad I'm not an HOA," you're in luck. Condominiums have a much easier list of obligations. That being said, I sympathize with the managers listening to this presentation because if you're managing both HOAs and condominiums, as you can tell, keeping up with the differences is not going to be easily done without sitting down and comparing the statutes, which really is a role that management does not want to undertake. I would encourage you therefore to encourage your boards to get legal advice and again, get fining policies so that they know these requirements are being followed.

So again, condominiums have a lot of similar processes, but very important one. With condominiums, your fine cannot become a lien against the unit. As Jim was saying just earlier, there's options where maybe an HOA can lien for a fine. It's going to be document-driven for that HOA, but condominiums are forbidden by statute to lien for a fine. So don't even consider it if you're a condominium. It's off a table.

And similarly where HOAs may be able to increase the maximum fine over a $1,000 based on what's in their documents, a $1,000 is all the condominium act can fine that allows a condominium to fine. So if you take away anything as a condominium from this presentation, you cannot lien and you cannot fine more than that a $1,000 for that particular violation.

Now that being said, if someone has a violation for, oh, I don't know, we'll use the example of someone who maybe put something in the common areas and they won't move it. And they also may also have a violation though for parking problem. That's not to say you couldn't fin them potentially a $1,000 for each separate violation, but it is a $1,000 per violation total. So you cannot go over a $1,000 for any one bad act.
Okay. And here's a big difference between the HOA Act where there's this time for payment that candidly maybe is too long, but maybe it also makes good sense. That's up for debate. Under the Condominium Act though, once the fining committee approves the fine, it's payable in five days after notice is sent to the owner. That's really not much turnaround in a world of what's become potentially pretty slow mail and email that can go into junk folders and other ways that an owner might not actually realize within five days the payment is due and may not legitimately realize that. That's a pretty tight timeframe, but that is what the Condominium Act provides, that they have to pay it within five days. And again, HOAs, you get a lot more time there.

Also, the association must provide written notice of the fine by mail or hand delivery to the owner and if applicable, if you've also fined tenants and ViTs, whereas the HOAs have an email option that's not included in the Condominium Statute. Now that being said, I do routinely tell clients to the extent there's statutory requirements of certified mail, of hand delivery, of whatever delivery sources stayed in the statute, you can always also do email. So condominiums can't just send an email with a fine saying, "Here's your fine," and not follow the other requirements but you can always also do an email.

Going back to that five-days payment. A certified mail letter most likely won't get to an owner within five days, even if the address is local. But again, if you send it via certified mail and then also copy email, an owner has a much better chance of finding out they've been fined against.
And then let's see this last one. Condominium owners subject to fines are not provided that opportunity that Jim just went over in great detail to cure that HOA owners potentially have. So again, HOA owners may be able to cure a violation anytime before the fine becomes due and be able to avoid the fine per the statute. But condominium owners don't have this get out of jail free card, so to speak. They may be liable for fines not cured depending on the circumstances.

So these are really the takeaways from the difference between condominiums and homeowner associations. That being said, before we get to the alternatives for fining, I think some of these questions, Jim, now that you've gotten a chance maybe to look at them, are there some coming out of your part of the presentation on HOAs that you see some questions coming up repeatedly or you want to address?

James "Jim" Turffs, Esq.:

I'm seeing a lot of stuff about parking and unfortunately, like I said, parking is just such a terrible example right now because by and large ... Well, first of all, if your association has public roads, as we call them; they're not owned by the association; whatever parking restrictions you have in your governing documents have now been converted basically to say you can only enforce what the local ordinances, laws, statutes, codes put in place. So basically if you have public roads, people can park on them before and after dark, unless your local county or city has some parking ordinance in there that creates a restriction for them.

If you have private roads, the jury's still out on whether that new law applies to you or not. Certain attorneys out there are saying that, hey, if you have private roads, then you don't have to worry about this and you can keep enforcing your restrictions. And that may be true. This hasn't gone through the courts yet, so we don't know if that's really true or not. And so it's a question of how much you want to fight about that. But parking is common and quite frankly, we just can't give you good answers about it right now. And it's so specific to your association. So talk to your general counsels about parking and things like that if you're trying to enforce it.

Cindy Hill, Esq.:

Okay. Were there any others that ... I'm also scrolling through. There's a lot of questions and I think similar to parking, some of these others are very factually driven and we don't know what's in your documents, so we can't necessarily give specific advice for some of these issues. But I think that also takes us into Jen Hicks's next part of the presentation, which is alternatives to fining because the extent you may be finding fining to be frustrating, to be onerous, to not be getting the job done, there are alternatives. So Jen, I will let you run with that.

Jennifer Hicks, Esq.:

Thanks. So real quick, I just saw a question pop up about the Kauffman language. That is a legal opinion and that's not something we can go into on a general discussion like this.

But back to alternatives of fining. As Cindy said, and Jim, fining is complex. It requires strict compliance with what the statute says for the procedure. You need your fining committee, you have to give owners a very long time in some situations, and all of that complicated process really allows a much better opportunity for owners to challenge your fine. Now, if they challenge and they are successful, it could result in a financial liability to the association. So with the risks, sorry, and the ability to cure for so long, especially in the HOA world, what else can we do? So there are some alternatives. Michelle, next slide, please.

And going through, we've got a little bit of time, so I can touch on each one of these. Your pre-suit mediation is just what it sounds like. It's mediation. It's a confidential and cooperative tool to get the board or at least the board members in a room with the owner to have a discussion and try and settle it. Let's not continue to fight. Let's not throw knives at each other. Let's have a discussion and see where we can go to get this resolved.

The good thing about mediation is the entire discussion is really confidential, so it allows the owners and the association to discuss the situation more openly and it does have a high success rate, sorry, of just being able to get everyone to come to the table and have a discussion.

Next, you have the option to suspend use rights. This was asked earlier in chat. Boards do have the right to suspend use rights for certain issues. Now, you're not going to be able to stop someone from driving on the condominium roads to get into their unit. You can't stop them from using the elevator or the stairs. You cannot stop an owner from being able to get in or out of their own property. But you can stop an owner from, say, using the pool or the clubhouse. It is a statutory right so it is a discussion with your general counsel of how that process works.

You also have, as Jim suggested in the very beginning, a non-confrontational communication. If you can have an open conversation with the owner without the need for mediation to see what's going on. As Jim said, if you haven't repaired your roof after the hurricane, why haven't you? "Well, because I'm fighting with my insurance and it's considered evidence, so I can't." Okay, that's good to know. Let's not go through the fighting process. Let's just have that open conversation.

Depending on the nature of the violation and the owner's personality, because we know that runs a lot of things in these communities, it's sometimes best to have the director or the CAM, your manager, approach the owner and discuss it with them and see how they feel. And if that's a possibility, that's often a good one to get it resolved without the tension.

And finally, you have litigation. Litigation should always really be your last result or last effort and last resort in resolving these issues. It's inherently confrontational and it comes with significant financial risk both to the association and the owner obviously, and it leads to more conflict in the community between owners and the board. So if not every owner agrees it's a violation and now you're in litigation and all that is just more and more anger in the community.

But that's not to say that sometimes litigation is simply the only way it will work. It's the only way to get the attention of the owner and the only way to get it resolved. For most violations, you're going to have to go to pre-suit mediation first in order to protect the association's right to collect attorney's fees for the process. So it is a complication. It is a little bit more detailed, but again, if you're going to litigation or considering litigation, it's definitely something you want to discuss with your general counsel first.
We're happy to discuss these options, but at that point, those are your options. Cindy?

Cindy Hill, Esq.:

Yeah, we do try to keep up with the chat here because there are a lot of questions and one of them was; and I'll just go ahead and say; "Does the homeowner pay cost of mediation?" So my response to that was per the statute, the association and the owners split the cost of the mediator. So if the mediator is charging, let's say $400 an hour, the association pays $200 and the owner owners pay $200 for each hour.
So yeah, I think that this circles back around to a lot of the questions are about basically we fine them and they're not paying. We fine them and they're not paying. We fine them and they're not paying well, then fining really isn't getting the result you want. It's not making people comply, so you may have to get more aggressive and go with the pre-suit mediation option. And that is an option where again, you can get parties in a room and a mediator serves as a facilitator and maybe gets a resolution.

Sometimes you might have to go to a lawsuit because here's what you have to balance out. Do the extent you get a reputation in the community that owners do what they want and the association imposes fines but doesn't collect them or do other actions, you potentially have a bit of a rolling boulder there getting out of control and maybe ruining some of your community restrictions that really a lot of owners want.
So where I'm going with this in a long roundabout way is that getting with your association's council can be the best way to proceed to make sure that you're going to tailor what you decide to do to your community's needs and what's happening in your community.

So with that being said, I think now we have a little more time than I anticipated. I think now we can try to also start answering some of these questions. Jim, Jennifer?

James "Jim" Turffs, Esq.:

Yeah, I was just about to start answering a question about, "What do I do if my owner did not pay the fine within 30 days and continues to be in violation?" Well, I think we may have answered the question after it was asked, but once the fine is levied and the deadline to pay has come and gone, you can attempt legal action. Just like a regular debt collection action or if the fine is a $1,000 or more, you can also pursue it through a lien foreclosure.

If you're not anxious to go through the collection stuff and you just want to address the continuing nature of the violation, you can do some of the stuff that I think it was Cindy or Jen we're talking about at the end there. The other options such as pursuing litigation or mediation, things like that. So you have other options to deal with fines or with violations like that.

And quite frankly, in my experience, fining tends to create a lot of anger and really seems hostile. Going through the pre-suit mediation process is often a better choice. It's a general recommendation, but again, it's not a one size fits all thing.

Alan Tannenbaum, Esq.:

Cindy, could you address selective enforcement? Let's.
Let's say there's a similar violation that there's five homeowners are violating. What kind of choice does a board or committee have and what's the risk if you have multiple violations by multiple owners from a selective enforcement?

Cindy Hill, Esq.:

So selective enforcement, for those of you who haven't heard this term before, means that you're targeting violations for some owners in the community and not others. And it's a defense that owners who are being targeted will raise and say, "You're not acting fairly, association. You're letting my neighbor down the street do whatever it is you're trying to fine me or tell me I can't do."

Now, just because the owner raises that defense doesn't mean it's true, but it is a defense that all boards of associations need to be cognizant could be an issue. So for selective enforcement, if you know for instance that you have ... I'm just going to make this up. You have five owners in your community that have non-compliant mailboxes. Maybe you had an amendment passed last year that everybody has to have a compliant mailbox and these owners are not getting their act together. You don't have any reason on paper in that scenario not to treat them all equally in terms of starting the same fining process, sending them the same notices and letters.

Now that being said, there could be reasons that may not be obvious to other owners, or it may be that there's five mailboxes your board has seen and there's actually seven out there. And when one of the notices goes out to one of the five owners, they say, "Actually, why are you picking on me? There's these other two guys." And then you go, "Okay, now we know about them, so now we can take action against them as well."

So again, if you have a good fining policy, it will set up a process that the board will be sure they're following routinely and consistently. But keeping in mind that the board does not have a duty to wander around the community with a clipboard and try to find every issue that's happening. So if you do hear about an issue from an owner after you proceed against them, and you know now there's another owner that is fair, that's reasonable to proceed that way. And again, there could be reasons why you are legitimately treating owners differently. One could be that an owner is in bankruptcy, for instance, where there can be restrictions on what an association can or can't do. So it's a complex question, and actually we've done entire hour presentations on selective enforcement, but I hope that help answer some of the issues that are coming up you're seeing in the chat, Alan.

Alan Tannenbaum, Esq.:

Cindy, what if in a situation where you have multiple violations and let's say one owner has been in violation for six months and another owner, the violation just showed up. Would you think selective enforcement would apply under those circumstances? Is the length of a violation a factor that could avoid a selective enforcement defense?

Cindy Hill, Esq.:

That's hard to say as a generality because again, because of violations taking place, it may not mean that the board or management knows about it. Some of our associations are well over 800 homes and some of them are small, have home zone cul-de-sacs that people don't necessarily notice. So really what the board's position is going to need to be is thinking worst case scenario. Thinking they have to tell a judge why they took certain action and didn't take certain action. They're going to need to be able to present it as reasonable.

So maybe a violation sat for six months because it was on a house and a cul-de-sac. No one told the board, no one saw it. Whereas the house that gets a violation almost immediately for doing an action is right at the front of the community where everybody saw it. So it's hard to answer these and avoid other than boards, again, don't want the appearance of letting their friends get away with some things, but the people they don't like, not letting them get away with it. That's what you really want to avoid when it comes push to shove.

Alan Tannenbaum, Esq.:

I think a gentleman had a question about trying to control rentals within their community. What strategy are we recommending beyond fining for trying to enforce rental restrictions where let's say somebody is doing a short-term rental consistently when the documents require that, let's say, a unit can only be rented three times a year for a minimum of 60 days. What's the recommended strategy under those circumstances?

Cindy Hill, Esq.:

Well, first of all, I would say that some of these short-term rental actions that people are undertaking may be something you can report the county where you live. For instance, in Sarasota County, you cannot rent for less than 30 days unless you're on a barrier island generally. So if you have a community where someone is doing that, it's potentially reportable to the county. You may also want to look at your documents and see what rights you have. If you have rights of approval as a board. That you may have a basis to tell a continued violator like that, that you will not approve future tenants for their property. So that's a potential option as well.

Unfortunately, those scenarios can get expensive in terms of enforcement because they are ongoing activities where the owner is making some seriously good money, particularly this time of year, and is not inclined to want to do what the condo or HOA says. So if you're going to have to get aggressive, it's going to be my recommendation you get with your association counsel and make an aggressive plan. Because really when they look at their checkbook and they make, I don't know, let's say $8,000 renting out a unit for two weeks in February, and you just fine them a $1,000, they're not going to necessarily see a good financial reason to do what the condo wants. So those are some complex issues that really should be addressed with the association's counsel if you want to get aggressive because you're going to need lawyer letters, you're going to need potential legal action to get some of these folks to prioritize the rules over what they're making money on these short-term rentals.

Alan Tannenbaum, Esq.:

Any other questions that you folks have pulled out of the chat that you want to respond to?

James "Jim" Turffs, Esq.:

A question about if you can email notice of violations. It may be possible, depending on what your governing documents say and whether owners have agreed to accept written notices that way. By default and if you're in doubt, I'd recommend sending it via regular and certified mail depending on what step of the process you're at.

Cindy Hill, Esq.:

Yeah, honestly, one of the first things that owners will say if it does become a contested legal issue is, "No one told me. I didn't know. I didn't get it." So my general advice, even when you're not fining, just general violations, send multiple ways to the owner if you possibly can, so as to avoid those scenarios where, "Nobody told me. I didn't know."

Alan Tannenbaum, Esq.:

Okay, unless there are pressing questions that you folks want to answer in this session we have hit 12 o'clock noon.

James "Jim" Turffs, Esq.:

There's one more question I saw pop up that I actually would like to address.

Alan Tannenbaum, Esq.:

Go ahead, Jim.

James "Jim" Turffs, Esq.:

And that was, "Who is allowed to speak at a fining committee meeting?" And weirdly enough, I had to answer this question just recently in the past couple days. And this can be modified by your governing documents, but by default, most of these fining committee meetings are treated the same as board meetings, which means that by extension there is an opportunity for every owner to speak at a fining committee meeting, even if they don't have an interest in the potential outcome. The issue there is how much weight does the fining committee give to any of those other owners' comments? So yes, they do have a right to speak subject to any reasonable rules, but they don't necessarily have to be listened to if the fining committee doesn't find their comments valuable.

Alan Tannenbaum, Esq.:

Okay, with that, Cindy, you see any other question you wanted to hit or where are you?

Cindy Hill, Esq.:

There are so many questions honestly. This is obviously something that again, we're going to circle back and say the legislature set this up. One of the questions that was in the chat I responded to was, "Why have it this way?" And my answer was, generally, I can't tell you why. This is what the legislature imposed on us. So I would say that, and a lot of these issues do show that fining has a lot of questions for obvious reasons.

So again, it sounds self-serving, but I would say get with your general counsel, make a fining policy, make sure you have a process and procedure that your volunteers can follow and your management can assist you with. That's really the key if you're going to fine. If you're not going to fine, and my word, if we haven't given you enough reasons to maybe think not fining is going to be the way to go, keep in mind you have alternatives. First of all, you can send out friendly letters before you even get aggressive with owners. You can start sending out more aggressive letters. You can have an attorney send a letter, you can have pre-suit mediation. You can potentially go to court. You do have other options that might stop some of the problems in your community, again, if word starts to get out that the board is taking enforcement very seriously.

Alan Tannenbaum, Esq.:

All right, remember for the CAMs that are in this presentation, make sure you get your information over to Michelle Colburn with your CAM number so that she can report your attendance today. This presentation will be on our website probably within a week, so you can always go back and refer to it or refer to your other board members or committee members. So that'll be available along with the transcript that Zoom provides us with. And that will also be published.

Hope that we provided some information. We started out by a gentleman saying did I have good news for you? And I think we fulfilled when I answered his question we had news for you. Cannot characterize this as good, but at least we gave you some alternatives today. Thanks everybody. Have a great day and we will see you next month with another topic of interest. Thank you.