Fine Policy & Fine Schedule

There is no legal requirement for an association to impose monetary penalties (fines) on members for violations of the association’s governing documents, though such requirements may be contained within the provisions of an association’s governing documents. If an association adopts a policy for imposing fines, Civil Code Section 5850 requires the association to adopt a “schedule” of fines that may be imposed for violations, and to distribute the fine schedule to the membership as part of the association’s annual policy statement. (Civ. Code §§ 5310(a)(8), 5850(a).)

Fines Restricted to Amounts Stated in Fine Schedule
Any fine that is imposed on a member for a violation of the governing documents may not exceed the amount of the applicable fine stated in the fine schedule that is in effect at the time of the violation. (Civ. Code § 5850(c).)

Amending the Fine Policy & Fine Schedule
The fine policy and fine schedule of an association constitutes an “operating rule” within the meaning of Civil Code Section 4355. (Civ. Code § 4355(a)(3).) Accordingly, a change to the fine policy or fine schedule must be performed in accordance with the rule change procedure mandated by Civil Code Section 4360. In sum, that procedure requires thirty (30) days advance notice of the proposed rule change, a decision to make the change at a board meeting, and notice to the membership within fifteen (15) days after the decision has been made. (See “Adopting & Amending Operating Rules.”)