When can an HOA fine homeowners?

Q:  Can a homeowners’ association (HOA) develop a “policy” to levy fines against homeowners for various violations of rules that are not a part of the covenants? If such a policy is developed and implemented, don’t the homeowners have to vote to amend the covenants?

A: Your question has two parts: (1) Does the HOA board have the authority, acting without a vote of the members, to adopt rules and regulations that may be in addition to, or more restrictive than, what is in the community’s declaration of covenants, conditions, and restrictions (“CCRs”); and (2) If so, may the board levy fines against owners for violations of these rules and regulations?

In general, the HOA board has the authority to adopt rules and regulations concerning the community’s common areas. That power is set forth in the North Carolina Condominium Act and the Planned Community Act, and chances are your community is subject to one of these.

The more prickly question is whether the board can adopt rules and regulations concerning what an owner may do to his own property or on his property (lot, townhome, or condo). The board typically only has this authority if the CCRs specifically grant it, and the board’s authority is limited strictly to what’s set forth in the CCRs.

A typical example is a community in which the board or a committee appointed by the board has the specific authority to adopt rules, regulations, and guidelines governing things such as the types of homes or accessory structures that may be built; the colors, styles, and materials that may be used in construction; landscape plans; fences, pools, basketball courts, pets, mailboxes and so on.

On the issue of fines: The Condominium Act and the Planned Community Act both have provisions that give HOAs the authority to levy fines against owners for violations of the declaration, the bylaws or rules and regulations. This assumes that the rules and regulations are valid and enforceable.

If your declaration does not describe a different procedure for dealing with violations and levying fines, the law requires that the homeowner be given written notice and a hearing before the board (or a “violations” committee appointed by the board) to consider whether a violation has in fact occurred and whether fines should be imposed. There are a few other details to the process, all of which may be found in the North Carolina General Statutes at section 47C-3-107.1 (for condos) or 47F-3-107.1 (for planned communities).

Originally published in the Charlotte Observer on December 26, 2013.

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