Homeowner association boards are granted authority to establish and enforce reasonable rules in the governing documents. Unfortunately, there are rarely many details provided explaining how and when to do it, so boards often set rules reactively. Reacting to a problem is not necessarily bad but overreacting is. One of the biggest dangers of rule making is moving too quickly.
As a rule, don't adopt a rule unless there is a general consensus in the community that it's needed. Why make one that punishes a sole troublemaker or duplicates one that should be enforced by the police? Use these guidelines when composing a rule:
- Fines and penalties should be "reasonable and customary". Don't invite challenge by heavy handedness. For example, if the area merchants charge $25 for a bounced check, a charge of $100 would be unreasonable. If they charge 18% on overdue accounts, don't charge 25%. Don't invite challenge.
- Punishment should fit the crime. $10/day may be reasonable for small infractions and not enough for major ones. The board should establish various levels of penalties for different infractions. In most cases, before any penalties are levied, the violator should be given written notice of the problem and a reasonable time to correct it. (An exception is parking in the Fire Lane. Tow immediately). When the deadline is reached, the fine kicks in.
It's also important to clarify that fines, interest and other penalties are considered equal to regular assessments for collection purposes. In other words, if the owner fails to pay the fines, it triggers a delinquency and collection process just like nonpayment of regular assessments.
- Same rules for everyone. Be careful not to fall into the trap of unequal enforcement. There is no faster way to lose credibility and support then by playing favorites. This is a very good reason to have professional management which should be impartial and businesslike in rule enforcement.
If a rule is needed, use Velvet Hammer Principles which include these components:
- Remember that you're dealing with neighbors and not hardened criminals.
- The wording and intent of rules should be respectful and not dictatorial.
- Before any rule is enacted, circulate it for review to the owners and an attorney specializing in homeowner association law.
- Take no pride of authorship. Accept constructive criticism to build support for the outcome.
- Ask the owners if the rule is needed. Listen carefully to the responses. Kill it if it's not clearly supported.
So minimize rules. Swing the HOA rule hammer if you must, but "velvetize" the outcome.
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