Every homeowners association has its own set of rules/policies, fines (for when those rules/policies are violated), and procedures regarding the process of HOA rule enforcement. That being said, when it comes to rule violations and fining procedures, most HOAs follow the same basic structure with respect to enforcing rules and assessing fines/penalties.
Pre-Hearing (Notice of Violation):
There are some rare instances when HOAs address certain violations by moving forward with a fine – no warning given. However, in most cases, when members of a community violate rules/policies, the first step a board takes is to give a warning or Notice of Violation.
Depending on the HOA’s Covenants, Conditions and Restrictions (CC&Rs), this Notice of Violation can serve as merely a written warning (giving the homeowner/tenant an opportunity to course-correct in order to comply with the rules/policies), or it can serve as a Notice of Hearing when the HOA board will meet to consider (and possibly impose upon a member/homeowner) a monetary penalty, a daily fine, and/or a suspension of privileges.
When it comes to the method of delivery for any HOA Notice of Violation, California Civil Code §4040 dictates that notices must be sent:
“First-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service carrier… at the address last shown on the books of the association.” If the homeowner/member has previously consented (in writing or via email) a Notice of Violation may be sent via “email, facsimile, or (by) other electronic means…”
It should be noted that this consent for electronic delivery may be revoked by the homeowner/member, at any time and for any reason, either in writing or via email.
With respect to the timeline of sending a Notice of Violation, California Civil Code §5855 states that homeowners/members are to be given notice:
“at least ten days prior to the meeting” and that “the notification shall contain, at a minimum, the date, time, and place of the meeting, the nature of the alleged violation… the nature of the damage to the common area… and a statement that the member has a right to attend and may address the board at the meeting.”
The homeowner/member may also request that the board meet in Executive Session when addressing their violation (California Civil Code §4935).
California civil code also states that, should an HOA board impose a monetary penalty, they shall “provide the member a written notification of the decision, by either personal delivery or individual delivery… within 15 days following the action (decision)” – unless the community’s CC&Rs require a shorter notice.
If the HOA board does not fulfill the requirements of Civil Code §5855 and/or Civil Code §4040, monetary charges shall not be effective/enforced.
We briefly covered the timeline and process that HOA boards are legally required to adhere to when giving notices related Notice of Hearings, but for the next step in the process of enforcing rules and assessing fines, we will focus on the actual Hearings themselves.
When it comes to Hearings, one of the most important topics is that of Due Process.
The American Heritage Dictionary defines Due Process as: “An established course for judicial proceedings or other governmental activities designed to safeguard the legal rights of the individual.”
California case law also protects the right of Due Process:
“The purpose of the common law right to fair procedure is to protect, in certain situations, against arbitrary decisions by private organizations.” (Potvin v. Metropolitan Life Ins. Co. (2000) 22 Cal.4th 1060, 1066, 95 Cal.Rptr.2d 496, 997 P.2d 1153 (Potvin ).) 8 When this common law doctrine applies, a private organization is required to proceed in its decision-making process in a manner that is both “ ‘substantively rational and procedurally fair.’ ” (Kurz. V. Federation of Petanque)
For the purposes of conducting HOA meetings, there are two main forms of Due Process that are normally utilized: Substantive Due Process and Procedural Due Process.
Substantive Due Process requires that an HOA board:
“…show that it has followed its own standards and procedures prior to pursuing a remedy, that those procedures were fair and reasonable and that its substantive decision was made in good faith, and is reasonable, not arbitrary or capricious.” (Ironwood Owners Assn. IX V. Solomon)
When considering what is “reasonable,” California case law states:
“The criteria for testing the reasonableness of an exercise of such a power by an owners’ association are (1) whether the reason for withholding approval is rationally related to the protection, preservation or proper operation of the property and the purposes of the Association as set forth in its governing instruments and (2) whether the power was exercised in a fair and nondiscriminatory manner.” (Laguna Royale Owners Association V. Darger)
Procedural Due Process ensures fairness in the hearing process by making sure that homeowners/members are (a.) given Notice of Violation, (b.) provided an opportunity to defend themselves, and (c.) be granted access to review and refute any/all evidence of the alleged violation (Civil Code §5855).
Here are some key takeaways that homeowners/members and board members should be aware of with respect to Procedural Due Process:
- Earlier this post discussed the procedural right of members’ Notice of Hearing (above), but it should also be noted California Civil Code 5310 ensures that all members be provided (annually) with a copy of their association’s discipline policies and any/all schedule of penalties for violations
- Although members/homeowners have a right to see any/all evidence against them and to refute it, members do not have any right to review evidence in support of their violation prior to their hearing (i.e. there is no right to pre-hearing discovery)
- If there is/are any reason(s) why homeowners/members are unable to attend their hearing, they may submit a defense of their alleged violation in writing (California Corporations Code 7341)
- Both homeowners/members and the HOA board have the right to call witnesses, however there is no right to cross-examine witnesses
- Although homeowners/members do not have the right to cross-examine witnesses, they do have the right to direct questions to board members (or the HOA board as a whole)
- With respect to lawyers, unless the right is delineated in the CC&Rs, homeowners/members do not have a right to be represented by legal counsel at their hearing(s)
After the hearing has ended, if the HOA board has imposed a penalty, fine, and/or disciplinary action against the homeowner/member (and/or their tenant), the board must send a Notice of Decision (mentioned above) within 15 days following the action – unless the CC&Rs and/or rules/policies require that this notice be provided earlier.
When HOA boards draft Notice of Decision letters, they should be written in such a way that a person who is unfamiliar with the case (e.g. a judge, arbiter, etc.) could determine the who, when, where, and why of violation(s) and resulting decision(s). When drafting this letter, it is a best practice to include:
- The date of the hearing
- The specific rules and/or policies that were alleged to have been violated (citing the specific CC&Rs and/or rules/policies)
- A statement with respect to whether the homeowner/member and/or their representative was present at the hearing – *if the homeowner/member/tenant was not present, the notice should mention if they submitted a defense of their violation in writing
- A synopsis or outline of any/all actions, by the HOA board and the homeowner/member/tenant, leading up to the hearing
- Any/all evidence in support of and against the allegation of violation
- The final ruling made by the HOA board
- And any/all disciplinary actions and/or penalties levied by the HOA board
HOA rules violations are usually resolved after the HOA board hearing has ended. Sometimes violation disputes drag on to Internal Dispute Resolutions (IDRs), Arbitration (ADRs), and Litigation. However, due to the high financial burden on both HOA boards and its members, the low statistical probability of these actions taking place, and for the sake of brevity, we will save these post-hearing topics for another blog. The most important takeaway from this post is that, whether you are an HOA board member, a homeowner, or a tenant, it is vital to understand the basic process of HOA rule enforcement and the rights that are guaranteed to you by law.
Hopefully you found this information useful, but if you have any questions, we highly recommend that you contact a lawyer – as nothing in this blog should be considered legal advice.
If your community needs assistance navigating issues related to rule enforcement (or any other), you should consider the advantages of hiring a professional HOA management company like Association Management Concepts Inc. (AMC) who can work for and with you to resolve/settle disputes of any kind – even if you’re a self-managed association.
If you have any questions, we encourage you to contact AMC at (916) 565-8080 (ext. 324)