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?
Roger Cummings is a manager with Sterling Services, a property management firm located in Holliston, Massachusetts. He manages 11 condominium properties in Rhode Island and Massachusetts, and says the use of fines in condominium associations is widespread in his area. “Effectiveness, though, hovers around 30% with 70% of owners ignoring the fines,” he says. “They don’t pay them until they sell – or they try to have them removed if a new management company takes over the property, attempting to convince the new management that the fines were a mistake.”
According to Daniel Wollman, CEO of Gumley Haft, a large co-op and condo management firm based in New York City: “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.”
The procedure employed by Cummings is to send a letter to the unit owner after the first infraction, explaining the problem and requesting that he or she cease and desist whatever the problematic behavior is – but not charging the person any sort of fine. In most cases, that first letter works; however, some owners will continue with the negative behavior and Cummings will then levy the fine. If the behavior continues, so do the charges. After a while the balance can become hefty – upwards of $500 or more. At that point, the owner will be asked to attend the next board meeting. The board will review the problem and the rules with the owner in person, and hopefully the problem will resolve. “But the bottom line,” Cummings says, “is that if they say, ‘go to hell,’ you can’t do anything about collecting until they sell. The legal costs involved are just too high for the association to enforce collection.”