U.S. Supreme Court decisions have resulted in determinations that homeowners association members who are potentially subject to discipline are entitled to procedural due process in connection with association disciplinary hearings. Unfortunately the decisions do not specify clear-cut requirements regarding the degree of procedural due process that is required and courts have articulated language such as the following in cases that have addressed the issue:
- “Once it is determined that due process applies, the question remains what process is due.” (See Morrissey v Brewer (1972) 408 US 471, 481, 92 S Ct 2593).
- “The very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation.” (See Cafeteria & Restaurant Workers Union v McElroy (1961) 367 US 886, 895, 81 S Ct 1743).
- Due process “is not a technical conception with a fixed content unrelated to time, place and circumstances.” (See Mathews v Eldridge (1976) 424 US 319, 334, 96 S Ct 888).
In the Mathews case, the Supreme Court went on to state that there are three factors that guide decisions about procedural due process in in connection with administrative proceedings, which by analogy could apply to homeowners association disciplinary hearings. The three factors that were articulated by the Court as applied in the context of a homeowners association disciplinary hearing were:
- The individual’s private interest that will be affected by the association’s official action;
- The risk of an erroneous deprivation of such interest through the procedures used and the probable value, if any, of alternative or substitute procedural safeguards; and
- The association’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.
The above factors do not provide much guidance for the directors of a homeowners association to determine the extent of procedural due process required for the conduct of a disciplinary hearing involving a homeowner. Commonly encountered questions include:
1. Should the disciplinary hearing be conducted in a board meeting that is open to all association members, or in an executive session board meeting?
2. Should the homeowner be entitled to receive copies of witness statements that were provided to the board of directors?
3. Should the homeowner be entitled to challenge the participation of a board member that is believed to be biased or prejudiced against the homeowner?
4. Is the homeowner entitled to the assistance of legal counsel at the hearing?
5. Should a homeowner be entitled to cross-examine witnesses at the hearing?
6. Is there a procedure for appealing the board’s decision?
7. If a fine is imposed in accordance with a fee schedule, can the board elect to hold part of the fine in abeyance for some period of time to encourage future compliance with the governing documents?
8. Can the association increase fines for repeated violations of the same provision?
9. Does the association need to conduct a separate hearing for a repeated violation?
10. Can the association impose continuing fines for violations that are not cured by the owner?
In considering each of the above questions, an association’s board of directors should be familiar with the relevant provisions that are contained in the association’s governing documents (i.e. bylaws and CC&Rs) and in state statutes. Governing documents that do not provide answers to the above questions and/or do not comply with state statutes should be appropriately amended to the extent necessary in order to bring them into conformity with the applicable state laws and provide sufficient guidance to the association and its members on these issues. In addition, given the importance of compliance by the association, it would be prudent for associations to consult their legal counsel concerning these issues to insure that their governing documents contain provisions that provide homeowners who are subject to the imposition of discipline with the required procedural due process in connection with the proceedings that are conducted.