In a homeowners associations, violations of the rules can lead to HOA fines. Before levying fines, board members must first understand their authority to do so and what procedures they must follow. This will help them avoid liability and ensure homeowners can’t challenge the decision.
What are HOA Fines?
A homeowners association fine is a monetary penalty that boards impose on residents who violate the community’s rules. As anyone who has lived in an HOA or condo community knows, these associations enforce strict rules to maintain order, aesthetics, and harmony.
Common rule violations include:
- Modifying home exteriors without approval from the HOA board or the Architectural Review Committee
- Allowing lawns to become overgrown or neglected
- Growing unauthorized plants
- Abandoning vehicles
- Parking vehicles in no-parking areas
- Leaving trash cans out too early or too late
- Making too much or too loud noises, especially during quiet hours
- Failing to keep pets on leashes or not cleaning up after them
- Putting up holiday decorations too early or keeping them on too long after the end of the season
- Violating restrictions against short-term rentals
- Leaving personal items such as bikes, toys, or kayaks in public view
The objective of HOA fines is to discourage residents from committing violations. They also penalize offenders and deter repeat offenses. That said, associations must follow state laws and their governing documents when imposing fines.
Are HOA Fines Legal?
Whether or not an association can levy fines depends on state laws and the governing documents. In general, HOA fines for violations are legal and enforceable, provided the HOA or condo has authority. More often than not, the CC&Rs and bylaws allow boards to impose fines for rule breaches.
Sometimes, state laws impose additional requirements on associations that fine owners. For example, in Texas, if an HOA is authorized to levy fines, Section 209.0061 requires the association to develop an enforcement policy and to make it available to all residents.
Can the HOA Fine You?
As previously explained, state laws and the association’s governing documents should determine whether an HOA or condo has the authority to impose fines. In Florida, for instance, Section 720.305 of the HOA Act permits associations to levy reasonable fines for rule violations.
Some states defer to the association’s CC&Rs and bylaws. Texas is one such example. In the Lone Star State, associations don’t have the inherent authority to impose fines. Instead, they must get this authority from their governing documents.
Additionally, most states and bylaws require associations to follow due process. Before levying fines, the HOA board must first provide the owner with written notice. This notice should include all pertinent details, including the penalties the owner faces if they fail to correct the violation.
Associations must also typically extend the owner an opportunity to be heard. This disciplinary hearing allows the owner to plead their case before the board makes a final decision.
Do You Have to Pay HOA Fines?
Provided the association has the authority to levy fines and follows all requirements, homeowners do have to pay HOA fines and penalties if they violate the rules. This is part of the agreement between the HOA and the homeowner.
When someone first buys a home in an HOA and moves in, they receive a set of disclosure documents outlining the association’s policies and penalties. By proceeding with the purchase, the owner agrees to abide by these rules and fulfill their obligations to the community.
Is There a Limit to HOA Fines?
Whether fines are capped also depends on state laws and governing documents. Some states regulate fines by imposing a strict limit. For example, in Virginia, Section 55.1-1819 of the Property Owners’ Association Act limits the fine to $50 for a single offense and $10 per day for continuing violations. Other states simply require that fines be reasonable.
When setting fine amounts, board members must strike the right balance. Fines must not be so low that they essentially grant rich residents “permission” to break the rules. At the same time, they must not be so high as to be considered excessive.
In general, minor violations should carry a lower penalty than major ones. Something that puts other residents’ health and safety at risk, for instance, would need to result in a heftier fine. Still, it is important to check state laws and the association’s bylaws when deciding fine amounts.
What Happens if You Don’t Pay HOA Fines?
Homeowners must settle their HOA fines or else face a number of potential consequences. These consequences can range from late fees or interest charges to legal action, liens, and even foreclosure.
1. Late Fees or Interest Charges
When a fine remains unpaid, the HOA board will encourage payment by adding late fees or interest charges. This authority, of course, must be granted by the governing documents.
2. Legal Action
Many associations contract a collection agency to settle delinquent accounts, including outstanding fines. This agency will then take a percentage of the collected amount as payment for services. It is worth noting that many agencies report owner debts to credit bureaus, which means that unpaid fines can impact credit scores.
Apart from collection agencies, an HOA may also choose to take legal action. If the association wins, the court may order the owner to pay the fine amount, along with any additional charges and attorneys’ fees.
3. Liens and Foreclosure
Depending on state laws and governing documents, an HOA may be able to place a lien on an owner’s home if they fail to pay fines. In Virginia, for example, fines are treated as assessments for the purposes of Section 55.1-1833.
Worse yet, the association can foreclose on the lien to satisfy the debt, which means owners can lose their homes because of an unpaid fine. That said, not all associations can attach a lien and subsequently initiate foreclosure proceedings if the delinquency solely consists of fines.
Avoiding Liability
Before levying a fine, board members must first make sure they have the authority to do so. They must also follow due process, including notice and a hearing, and ensure that fines are reasonable. For homeowners, the best way to avoid HOA fines is to understand the rules and abide by them religiously.
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