Deed restriction violations can be rampant in some Homeowner and Condominium Associations (“Associations”). Two methods that can be employed together or separately to curb violations are the 1) litigation; and 2) fining tracks. Associations often opt for the fining route so as to cut down on the out of pocket hard costs involved with enforcement of deed restriction violations.
Many of the fining procedures are driven by the Florida Statutes. Although the applicable statutory fining requirements for Homeowner and Condominium Associations are very similar, there are some distinct differences. Additionally, an Association’s governing documents must be reviewed before implementing the fining process to make sure the Association is meeting any additional requirements therein.
We will first discuss the statutory treatment of fining in Homeowner Associations. Pursuant to Florida Statute § 720.305(2), an “association may levy reasonable fines. A fine may not exceed $100 per violation against any member or any member’s tenant, guest, or invitee for the failure of the owner of the parcel or its occupant, licensee, or invitee to comply with any provision of the declaration, the association bylaws, or reasonable rules of the association unless otherwise provided in the governing documents. A fine may be levied by the board for each day of a continuing violation, with a single notice and opportunity for hearing, except that the fine may not exceed $1,000 in the aggregate unless otherwise provided in the governing documents. A fine of less than $1,000 may not become a lien against a parcel. In any action to recover a fine, the prevailing party is entitled to reasonable attorney fees and costs from the non-prevailing party as determined by the court.”
There is a lot to unpack in this provision. First, a fine must be reasonable. A reasonableness test is far from a bright- line rule. The second sentence promulgates a cap on fines of $100.00 per day unless the Association’s governing documents specifically allow otherwise. The conservative approach would be to stick with the $100.00 per day statutory cap. The further the Association steers from the statutory cap, the more vulnerable the fine becomes to a reasonableness argument. Additionally, there is a $1,000.00 cap in the aggregate unless the Association governing documents specifically allow otherwise. Again, the reasonableness of the fine decreases the further the Association strays from the statutory cap. And, regardless of what the Association governing documents dictate, an Association cannot undertake the lien process until the fine reaches at least $1,000.00. Arguably, the governing documents must also be worded in such a way to allow for fines to become liens.
Every person being fined must be given a single notice and opportunity for a hearing. Florida Statute § 720.305(2)(b) dictates that, “A fine or suspension levied by the board of administration may not be imposed unless the board first provides at least 14 days’ notice to the parcel owner and, if applicable, any occupant, licensee, or invitee of the parcel owner, sought to be fined or suspended and an opportunity for a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee. If the committee, by majority vote, does not approve a proposed fine or suspension, the proposed fine or suspension may not be imposed. The role of the committee is limited to determining whether to confirm or reject the fine or suspension levied by the board. If the proposed fine or suspension levied by the board is approved by the committee, the fine payment is due 5 days after the date of the committee meeting at which the fine is approved. The association must provide written notice of such fine or suspension by mail or hand delivery to the parcel owner and, if applicable, to any tenant, licensee, or invitee of the parcel owner.”
The safest approach for an Association is to set up a Fining Committee before voting to levy a fine. A best practice is to reference a date, time, and place for the fining committee meeting in the 14-day notice that is more than 14 days out from the date the letter is sent. The fining committee simply confirms or rejects the fine that is levied by the board. If the fine is approved, the Association must immediately get notice to the person being fined that the fine is due within five (5) days of the fining committee meeting. It is recommended that all notices go out via regular and certified mail. The more thoroughly the process is documented and the better the notice is evidenced, the more likely it is that an Association would prevail on the merits in any ensuing litigation. As a practical matter, it may be prudent to give owners a little more than five (5) days to pay the fine as the mailing of the letter may take up several of the allotted five (5) days and not allow much time for compliance. It may be prudent to reference the fact that any approved fines will be due within five (5) days of the Fining Committee meeting in the original 14-day notice.
A Condominium Association’s requirements for fining in Florida Statute § 718.303(3) allow that, “The association may levy reasonable fines for the failure of the owner of the unit or its occupant, licensee, or invitee to comply with any provision of the declaration, the association bylaws, or reasonable rules of the association. A fine may not become a lien against a unit. A fine may be levied by the board on the basis of each day of a continuing violation, with a single notice and opportunity for hearing before a committee as provided in paragraph (b). However, the fine may not exceed $100 per violation, or $1,000 in the aggregate.” The most glaring difference from the Homeowner Association provision is that fines cannot become liens, no matter the amount of the fine. Also, the $100.00 per day and $1,000.00 in the aggregate caps are hard caps which cannot be increased even if the governing documents allow for greater fine amounts.
Florida Statute § 718.303(3)(b) tracks its Homeowner Association counterpart almost verbatim in proscribing that, “A fine or suspension levied by the board of administration may not be imposed unless the board first provides at least 14 days’ written notice to the unit owner and, if applicable, any occupant, licensee, or invitee of the unit owner sought to be fined or suspended, and an opportunity for a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee. The role of the committee is limited to determining whether to confirm or reject the fine or suspension levied by the board. If the committee does not approve the proposed fine or suspension by majority vote, the fine or suspension may not be imposed. If the proposed fine or suspension is approved by the committee, the fine payment is due 5 days after the date of the committee meeting at which the fine is approved. The association must provide written notice of such fine or suspension by mail or hand delivery to the unit owner and, if applicable, to any tenant, licensee, or invitee of the unit owner.”
Certain violations lend themselves more readily to fining than others. It is easier to document and determine when a violation begins and ends when the violation is an unauthorized metal roof or a house is painted an unapproved color. However, other violations are harder to track and can come into and out of compliance on a weekly basis. For example, improper lawn maintenance can be a violation one day, remedied the next day and out of compliance again in a week. Unless daily inspections are occurring, some types of violations are more difficult to support with evidence. As such, Associations should work closely with general counsel to tailor an appropriate fining resolution and policy that meets the statutory and governing document requirements as well as recognizing the practical difficulties in enacting a uniform process that accounts for the nuances between categories of violations.