Unless otherwise stated in an association’s governing documents, an association may adopt a “policy imposing any monetary penalty, including any fee, on any association member for a violation of the governing documents, including any monetary penalty relating the activities of a guest or a tenant of a member.” (Civ. Code 5850(a).) These “monetary penalties” are commonly known and referred to as “fines.” Fines are used in order to deter violations of the governing documents, as well as to compel compliance from a member, guest, or tenant who is in violation.
Authority to Impose Fines
The language of Section 5850 may not “be construed to create, expand, or reduce the authority of the board to impose monetary penalties on a member for a violation of the governing documents.” (Civ. Code § 5865.) However, the California Court of Appeal has indicated that the authority to impose fines need not be explicitly provided for in an association’s CC&Rs in order for the board to adopt a fine policy and utilize fines in its enforcement efforts. (Liebler v. Point Loma Tennis Club (1995) 40 Cal.App.4th 1600, 1613-1614.)
Distinct from Reimbursement Assessments
“Reimbursement assessments” (aka “compliance assessments”) refer to special assessments levied against an individual member to reimburse the association for its costs incurred in repairing damage to the common area caused by the member, his guest or tenant. (See “Reimbursement & Compliance Assessments.”) By contrast, fines are imposed in order to deter violations and compel compliance; they are not necessarily tied to any expenses incurred by the association as a result of a violation.
Fine Policy & Fine Schedule
The imposition of any fine must be in accordance with the association’s published fine policy and fine schedule that is adopted by the board and distributed to each member as part of the association’s annual policy statement. (Civ. Code § 5850(c); See also “Fine Policy & Fine Schedule.”)
Civil Code Section 5855 contains procedural requirements that must be satisfied before a fine imposed upon a member becomes effective. Those requirements include:
- Notice and Meeting (Hearing) – The board must provide the member with individual notice of the meeting (hearing) where the board is to consider imposing the fine at least ten (10) days prior to the meeting. (Civ. Code § 5855(a).) The notice must contain, “at a minimum, the date, time and place of the meeting, the nature of the alleged violation for which a member may be disciplined…and a statement that the member has a right to attend and may address the board at the meeting.” (Civ. Code § 5855(b).) The board must meet with the member in executive session if requested by the member. (Civ. Code § 5855(b).)
- Notice of Decision – If the board imposes the fine, the board must, within fifteen (15) days following the action, “provide the member with a written notification of the decision, by either personal delivery or individual delivery pursuant to Section 4040.” (Civ. Code § 5855(c).)
For more information on these procedural requirements, see “Notice & Hearing Requirements.”
No Liens Allowed for Fines
When a member fails to remit payment of assessments owed to the association in a timely fashion, the association may record an assessment lien against the member’s property to act as security for the payment of the member’s assessment debt. (Civ. Code § 5675(a); See also “Notice of Delinquent Assessment (Assessment Lien).”) However, a “monetary penalty” (i.e., a fine) “imposed by the association as a disciplinary measure for failure of a member to comply with the governing documents…may not be characterized nor treated in the governing documents as an assessment that may become a lien against the member’s separate interest enforceable by the sale of the interest” through nonjudicial foreclosure. (Civ. Code § 5725(b).)
- Civil Code Section 5865. Effect on Authority to Impose Penalties.
- Civil Code Section 5855. Disciplinary Measures; Notice of Hearing; Notice of Decision.
- Civil Code Section 5850. Schedule of Monetary Penalties (Fines).
- Civil Code Section 5725. Liens for Reimbursement Assessments, Monetary Penalties; Limitations.
- Civil Code Section 4040. Notice or Delivery to Individuals.
Related Case Law
- Liebler v. Point Loma Tennis Club
(1995) 40 Cal.App.4th 1600
[Operating Rules; Non-Resident Use] A HOA may create and enforce a rule excluding non-resident owners from use of the HOA’s common area recreational facilities.