In the never-ending quest of boards to obtain owners’ voluntary compliance with associations’ covenants and rules, many boards rely on “Old Faithful” (i.e. the fine) as a motivator for compliance.   Because use of fines is so prevalent in our communities, it is important to take a step back every so often and review your fine system and determine whether it is working for your community and giving you the results you seek.
How do I assess the success of my community’s fine system?  We’ve outlined some key indicators (and problem shooters) below:

Signs that your fines do NOT work

  1. There is no decrease in the number of violations in the community
  2. Owners are paying the fines but continuing to violate the covenants and rules
  3. Your association is resorting to legal action in many instances
  4. You’ve been told by legal counsel that the fines are “uncollectible” because they were not lawfully imposed (or for other reasons)

If you checked one or more items above, chances are you can improve your fine system/process to provide your community with better results.  Consider the following:

  • Are your fines high enough?  For example, is it less expensive for an owner to pay the fine and continue violating the covenants then to come into compliance?  If so, your fines are not high enough.
  • Are you affording notice and opportunity for hearing to your owners prior to imposing every fine?  If not, your fines may not be collectible because the owners are not receiving the due process required by law.
  • Do you have a violation policy in place and are you following the policy for all violations?  If not, this may impact the enforceability of your fines.
  • Are you uniformly imposing fines?  In other words, are all violators being treated the same way with respect to fines?  If not, your fines may be viewed by owners as “risks” rather than “definitive consequences”.

Signs that your fines ARE working

  1. You’ve seen an increase in compliance.
  2. There are less repeat offenders (i.e. once you’ve fined an owner, that owner does not tend to repeat the violation or violate other covenants or rules).
  3. You are spending less on legal fees for covenant enforcement actions.

Reviewing your fine system on a regular basis using the above indicators will help ensure your community is getting the most out of its fine process and is getting closer to its quest for voluntary compliance.

Author
Elina B. Hindley
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