Fines and Penalties Using Them Fairly and Effectively

Community living comes with lots of rules and regulations—many of which are codified in largely static, hard-to-amend governing documents like proprietary leases and condominium declarations. Others are laid out in the more flexible context of house rules, which can (and should!) continue to evolve as times change and community values and demographics shift. House rules can cover everything from when your monthly charges are due, to what types of pets (if any) you’re allowed to keep, to the times and days you can move into or out of your unit – and a whole lot in between. Living by the rules may be easy for some, difficult for others. What can a board do to enforce their own community’s standards and no-no’s? Fines and fees are one option.

How Widely Used are Fines and Fees?

According to Daniel Wollman, CEO of Gumley Haft, a large co-op and condo management firm based in Manhattan: “I can’t think of more than two co-op buildings that we manage that levy fines. The number is slightly higher in condominium buildings because there tend to be a lot of renters in condos. On the whole, with more renters [in a building], there’s less of a proprietary interest on the part of the residents.”

Humberto Roque, a management executive with The Duo Condominium at AKAM On-Site in Dania Beach, Florida, says that in his market: “Fines are very prevalent. Most condominium associations use fines as a form of discipline with owner/members, with the fines usually outlined in the governing documents. These documents can be amended when necessary to refine, add or eliminate fines and fees.” 

Marcy Kravit, who is also with AKAM, explains that Florida’s condominium statute requires a 14-day notice period before a fine can be enforced. A fine many not exceed $100 per violation, and fines may be imposed for each day that a violation continues – up to $1,000 per violation. A grievance committee of the condominium must hear the case and determine the final outcome.

“Fines are a tool in the toolbox to compel a change in behavior,” says Brian Butler, Vice President of Property Management with FirstService Residential in Chicago. “Most buildings we manage have some fines. It could be as simple as a late fee on monthly common charges, or something hefty on lease restrictions like Airbnb violations. These fines and fees are generally found in the association’s or corporation’s house rules – not in the governing documents. The dollar amount of the fine is at the board’s discretion. They can amend house rules when necessary, and can have ranges and categories for different fines.”

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2 Comments

  • Our Coops recent annual meeting and Board elections were disgraceful resulting, in my opinion, a very dangerous precident. There were 4 available openings and only 4 shareholders offered their candidacy. So providing we had a quorum 51%, these 4 candidates by default would become Board members. 2 sitting Board members have a personal opinion of one of the candidates. To derail this candidate from becoming a Board member, these 2 sitting Board members sabotaged the election by soliciting the shareholders and directing them not to vote, not to enter the polling building, and to retract their ballot from the management company if already submitted. That being said, there was no quorum so no elections and no annual meeting. Is this lega?? My concern is this behavior may continue any time someone doesn't like something. Please advise.
  • I live in a co-op in Manhattan. A couple of years ago, without general discussion and without referendum, the board enacted fines. The fines are $250 for the first offense, then $500 for additional offenses. The additional offenses need not be repetitions of the original offense. Once the board fines a shareholder $250, any other offense at any time thereafter is fined at $500. There is no due process. The board votes in a closed meeting whether or not to levy the fine. The shareholder is not notified of any accusation, is not invited to face the accuser, is not entitled to any opportunity to defend himself or herself. I received notice of fines, and asked to be formally accused, and to have the opportunity to examine my accuser and defend myself. I was offered a chance to speak with two of the board members who claimed to be neutral. I said it was not satisfactory. I cordially attended the meeting, but let them know that I would not pay any fines unless there was a reasonable due process. My bigger problem for now is that, despite repeated requests that management keep these fines separate from any other billing, management has rolled all fines and fees into an assortment of arrears, which are now accumulating late fees. Essentially management took my maintenance payment, and used it to pay the fines, and now claims I am in arrears on maintenance. My feeling is that the fines are not legally enforceable, and should be kept separate until resolved. I also feel that management misappropriated my maintenance payment to pay the fines, making it look like I have not kept up with maintenance and storage bin payments. The late fees are accumulating into a significant amount themselves. I contacted a lawyer, but he wanted $3000 just to review all the documents and write a letter, which is about what the fines and fees currently add up to. If it went to court, I'd be spending a far more to fight than what is being asked of me, so that doesn't make sense. Any suggestions what I should do?