State laws and an association’s governing documents grant homeowners associations standing to initiate legal actions that are designed to enforce the association’s governing documents. The association’s board of directors has a duty to enforce the governing documents and when they fail to take appropriate action, homeowners can file actions against the association to compel it to take enforcement action.
In contemplating the appropriate action to take or not take for violations of the governing documents, directors are said to have deference under the “business judgment rule” . Under this rule, the directors may elect not to take action on a violation providing the decision is made in good faith following a reasonable investigation taking into consideration the best interests of the association and its members. Although the decisions concerning the appropriate action to take for violations are made by the board of directors, the action that is taken must be maintained in the name of the association.
Court case decisions have held that a homeowners association may impose fines for rules violations even if that power is not specifically provided for in the association’s governing documents. Even so, if an association seeks to impose fines for violations, it must first provide the alleged offender with due process by giving appropriate notice and an opportunity to be heard concerning alleged violations.
Recourse for Continuing Violations
In situations that involve continuing violations, an association’s board of directors needs the ability to impose daily fines in order to encourage compliance with the association’s governing documents. For example, if a homeowner wrongfully makes an architectural change that is in violation of architectural standards, such as painting the exterior of his or her home a color that is not allowed, the association’s board may, after following the required procedures, impose a daily fine that continues to accrue until such time as the homeowner cures the violation. The ability to impose a daily fine should be provided for in the association’s policies and schedules pertaining to the imposition of fines and it is a good practice for an association’s directors to be open minded about waiving a portion or all of the fine if compliance is secured without the necessity of taking further action against the homeowner. If, after following the appropriate procedures for imposing a fine, the homeowner does not correct the violation, the association’s board of directors must then decide whether or not to take legal action in an effort to obtain a court ordered directive to the homeowner concerning the violation as well as a monetary judgment for the amount of the fines that were properly imposed and such other relief as may be appropriate.
Distinction Between Continuing and Repeat Violations
A continuing violation is a single violation that persists for an undetermined period of time. When addressing a continuing violation, an association’s board of directors conducts a single hearing pertaining to the alleged violation and, if a violation has been found, it imposes a continuing fine for the continuing violation. A repeat violation occurs when a homeowner engages in conduct that violates the association’s governing documents one month, and then repeats the same conduct on a subsequent date. Because an association cannot impose a fine or discipline on a member without first providing the member with due process, each separate violation requires a separate process before the homeowner may be sanctioned for the violations. To deal with repeat offenders, homeowners associations’ policies concerning the imposition of fines typically provide for escalating fines that increase for each subsequent (repeat) violation.
Court Ordered Injunctions
If the imposition of fines or other penalties for violations of an association’s governing documents does not eliminate the problem, the association’s board of directors must consider taking legal action against the offender(s) in which a court ordered injunction is sought in order to compel compliance and recover damages, costs and fees incurred in connection with the enforcement action. Violations that continue after a court has granted an injunction that directs certain conduct can result in the violator being held in contempt of the court order and the imposition of additional penalties and/or incarceration in jail. When the association’s board of directors considers filing a court action against a violator, it must act in good faith and in the best interests of the association following a reasonable investigation of the facts.
When a homeowners association seeks to enforce its governing documents by court action, it must demonstrate that its actions against the alleged violator(s) were not “arbitrary and capricious” . An arbitrary decision by a board of directors is a decision that did not involve honest consideration and regard for facts that were presented and was based more on random choice. A capricious decision is a decision that is whim, impulsive and unpredictable. The association must also demonstrate that it properly followed the required procedures prior to filing the court action and that those procedures were fair and reasonable.
Action by Homeowners
Association governing documents and state laws typically provide that when a homeowners association’s board of directors does not act to enforce its governing documents, homeowners can bring legal actions against the association for failure to act in accordance with its duties. Alternatively, homeowners can institute their own legal action against other members of the association who violate the governing documents.