One of the most commonly asked questions by board members is “what do we do when a homeowner violates our covenants?” As a preliminary matter, the association should have a policy in place that addresses the enforcement of covenants and rules, including notice and hearing procedures and the schedule of fines. That being said, there are generally six options when it comes to enforcing your covenants and those options are set forth below. The appropriateness of any particular option depends upon the nature of both the violation and the violator.
1. Fines. Be sure your association has the authority to impose fines, as well as to collect them. Fines must bear a reasonable relation to the violation involved. Courts will not allow an association to continue to fine until the amount owed becomes unreasonable. The Colorado Common Interest Ownership Act allows associations to treat and collect fines in the same manner as assessments. Therefore, an association can place a lien on the violator’s property and ultimately foreclose its lien if payment is not received, or file suit to obtain a money judgment for the amount owed. However, before a fine can be imposed for a violation, Colorado law requires the satisfaction of certain due process requirements. Specifically, the violator must receive notice of the alleged violation and be given an opportunity to have a hearing. Without this notice and opportunity for a hearing, fines are unenforceable. Fines are the most commonly utilized enforcement mechanism and can be effective for common rule violations.
2. Internal Resources. There are a number of internal resources a community can use to encourage a resident to conform to the association’s covenants and rules. This option commonly includes:
- Suspension of Owner’s Voting Rights
- Suspension of the Use of Recreational Facilities and Common Areas
- Utility Shutoff
- Towing
- Self-Help – Self-help means the association takes action to correct the violation itself without a court order
Some associations go so far as to restrict access to amenities such as elevators. These methods can be considered aggressive but can be effective especially towing for parking violations that may cause community hazards. They are also effective as a “last resort” when other options fail. However, before using any of the internal enforcement resources, consult with an attorney to verify that the association has the legal authority to take such action.
3. External Resources. Associations can also draw on resources within the broader community to help them enforce covenants and rules. Do not overlook local government agencies and municipal services as resources for enforcing your rules. Cities, counties, and municipalities do not enforce covenants, rules, regulations or architectural standards. However, many covenants mirror county or city ordinances and you may be able to get the governmental agency or municipal service to enforce its ordinance instead of spending association time and resources on enforcement. Some examples include :
- Local Health Department-Your local health department can be asked to enforce the local health code. This can be used in hoarding situations.
- Local Building/Zoning Department-This local agency can assist with enforcement of such rules as fence, setback, and shed restrictions.
- Local Law Enforcement-In some jurisdictions, the police or sheriff’s department will enforce traffic regulations or issue tickets and/or tow violators of the community’s parking rules.
- Local Fire Department-Your local fire department may help with enforcement of fire lanes and the removal of hazardous materials.
- Animal Control Department-You can request that this agency patrol your community for animals in violation of its pet rules or local ordinances.
4. Alternative Dispute Resolution. A number of associations are turning to Alternative Dispute Resolution (ADR) as a means of encouraging people to comply with covenants, rules and standards/guidelines. It involves submitting a dispute to a trained, uninvolved third party for resolution (e.g., mediation or arbitration). The third party’s decision may be non-binding (e.g., mediation), or binding on all the parties (e.g., arbitration). However, this approach can be a more efficient and effective way to resolve a dispute than other means. An association might propose ADR when confronted with a difficult rule enforcement situation or the possibility of prolonged litigation or disputes that involve difficult personalities. It is also good for neighbor to neighbor disputes involving violations that are difficult to substantiate such as noise violations.
5. Legal Action. The ultimate recourse of the association is to seek civil legal action against an owner in violation of a covenant or rule. Legal action may entail seeking a restraining order to stop the offending action and then an injunction to prevent any further violation. The association may also seek to have the court force the owner to restore the property or situation to that which existed prior to the violation and to reimburse the association for any costs incurred in enforcing the restriction including attorney fees. This is most often necessary for enforcing assessment provisions and building restrictions within the covenants or in situations whereby the owner is unreasonably “dug in” and unwilling to compromise. A number of factors go into the decision to pursue legal action. Such a decision should never be made without consulting first with the association’s attorney.
6. No Action. Board members often mistakenly believe they must enforce all violations either because they have a legal duty to do so or by failing to enforce a violation, they will have waived their right to enforce against a future violation. This can lead to unnecessary lawsuits and expenses for the association. While the association, through its board of directors, is charged with enforcing its covenants and rules overall, not every single violation must be enforced. The law permits the board to exercise its reasonable business judgment and make a case by case determination of whether (and what type of) enforcement is appropriate. It is important for the board to document in writing, its reasoning and decisions not to take action.
As you can see, there are a myriad of enforcement options available to the Association. The best advice is to have standardized procedures for processing violation complaints and to consult with legal counsel to determine which alternative is best suited to address the particular violation.