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Steven R. Braten, Shareholder, Rosenbaum PLLC Jul 23, 2018 6 min read

To Fine Or Not To Fine, That Is The Question?

Our community association clients often ask whether fining an owner for violating the governing documents of the association “is worth the effort?” We respond, “Well, that depends. Do you have a formal fining process in place and is the association following the statutory process to properly levy and impose fines.” A response we hear too frequently is “I’m really not sure. Can you help us verify we are following the correct procedure?”

ED-AT536_paulac_P_20150417161838When the Confusion Started
Part of the confusion among association boards over whether their association is imposing fines correctly is that the Florida Legislature changed the statutes under Florida’s Condominium Act (Chapter 718) and Florida’s Homeowners’ Association Act (Chapter 720) in 2015 that created confusion. Prior to this legislative change, legal practitioners, community association managers, and board members understood that a fine could be levied by a “Committee” (typically referred to as a “Fining Committee”) after first giving an owner a written warning of a violation of the governing documents. So long as the association provided the violator at least 14-days’ notice of a hearing before the Committee and opportunity to be heard before the Committee, the Committee could then vote to both impose a fine, as well as determine the amount of the fine or fines to be imposed. In 2015, the Florida Legislature made changes to § 718.303 and § 720.305, Florida Statutes, that created a two-step process, requiring the Board to first hold a meeting to “levy” a fine (i.e., vote whether to fine the member and for how much) and then the Fining Committee must then meet to vote whether to “confirm or reject” the fine(s) levied by the Board.

Imposing a Valid Fine Under Current Law
To impose a valid fine under current law, the first step is to provide the member a warning and the opportunity to cure the violation. Remember, a member is not only responsible for his or her conduct but also that of “the member’s tenants, guests, and invitees.” Therefore, we recommend focusing on fining the member. Your association may have other more effective ways of dealing with a tenant who violates your association’s governing documents directly, such as eviction (if expressly provided for in your association’s declaration). Next, if the member fails to take corrective action, then the board of directors must hold a duly noticed meeting to vote whether to “levy” a fine and set the amount of the fine not to exceed $100.00 (unless your association’s governing documents provide otherwise). If your community is fining its members, the board of directors should consult association counsel to verify that the governing documents comport with the statutory maximum “cap” on fines, whether per violation or the maximum that can be imposed for a continuing violation. After the Board votes to levy a fine or fines against a member and the amount to be levied, the fine is not considered “imposed” until the association provides the member with 14-days’ notice that the Board has voted to levy a fine against the member and that the member has the opportunity to be heard before the association’s Fining Committee. This notice must clearly state the date, time, and place of the hearing.

The Fining Committee must consist of at least three (3) members of the association who are not “officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee” of the association. See, e.g., FLA. STAT. §720.305(2)(b) (2018). The role of the Fining Committee is expressly limited to either “confirming or rejecting the fine or suspension levied by the board.” Id. Thus, it is not the Fining Committee’s role to grant extensions or otherwise change the amount of the fine levied by the Board. The Fining Committee should post notice of its meetings in the same manner as board meetings – at least 48 hours in advance and in a conspicuous place in the community. We also strongly recommend the Fining Committee keep minutes of its meetings, which need only summarize what took place at the meeting. Most importantly, the minutes should reflect that after considering all evidence presented as to each matter before the Committee, the Committee voted on each violation it considered and the outcome of the vote. If a majority of the Fining Committee does not approve the fine levied by the board, the fine may not be imposed (or collected). Also, depending on the reason for the Fining Committee’s decision to reject the fine(s), this could negatively impact the association’s ability to successfully pursue other remedies for the member’s violation. Therefore, the association’s representative should be prepared to present a compelling case to the Fining Committee to confirm the fine.

If the Fining Committee votes to confirm the fine, then “the fine payment is due 5 days after the date of the committee meeting at which the fine is approved.” Id. This payment due date was added to §718.303 and §718.305, Florida Statutes during the 2018 legislative session, effective July 1, 2018. These statutes require that the association provide written notice of the fine. Therefore, we recommend that the association provide the member written notice via certified mail, return receipt requested, and regular first class mail, that the Fining Committee voted in favor of accepting the board’s decision to levy the fine against the member in question and payment is due 5 days from the date of the notice. In the case of a homeowner’s association, if the fines for a continuing violation are at least $1,000.00, then the association may record a lien against the member’s Lot in accordance with the same procedure to collect assessments.

Can the Board Dispense with Voting to Levy Fines?
Depending on the size of the community or the frequency of violations, the board can become bogged down dealing with fines rather than focusing on operating the community. Many of our clients often inquire whether the board of directors can avoid voting to levy a fine on every violation committed by the membership. The most effective way to decrease the frequency that a board must vote on levying fines is to establish a formal covenant enforcement policy that not only clearly states the fining process from start to finish, but also contains a schedule of common violations that occur in the community and the amount of the fine that will be automatically levied without further board action after a member receives a warning letter. This allows the association to issue the 14-day notice to appear before the Fining Committee after a warning notice if the member persists with the violation conduct.

Where to Start?
Contact your association counsel to review your association’s current fining structure to determine what steps need to be made to maximize the deterrent affect of the association’s fining capabilities. Discuss any current fining schedules with counsel to determine where revisions should be made. Don’t miss out on the opportunity to utilize the fining process to enforce certain provisions of your governing documents prior to resorting to a legal proceeding to enforce your governing documents.