Whether your association is in North Carolina or South Carolina, as a matter of best practice, fines should never be used to punish or as a means to make up for budget short falls. Once a homeowner has corrected a violation, serious consideration should be given to reducing the fines owed by the homeowner.
We have all had experiences with a homeowner who has refused to comply with the CCRs. A thorn in the side of the community, this homeowner seemingly thumbs their nose at the Board and the restrictions in the governing documents. Their property is not well maintained and they bring down the value of the neighborhood. Only after being assessed with months of fines and moving through the collections process does the homeowner finally wake up and address the problems at the property.
At this point it is very tempting and human to want to leave the fines on the account. The homeowner has created the problem and has only his or herself to blame. Resist the urge to do this!
As a Board member, one must do their best to remove personal feelings from the equation and look at the situation objectively. The HOA has made its point and has followed through with threats of fines and legal action. The homeowner has corrected the violation and now the account needs to be settled quickly and equitably.
Instead of leaving hundreds or thousands of dollars of fines on the homeowners account as a punishment or to recoup the “costs” of dealing with a problem homeowner, consider reducing the fines to an amount equal to a week’s worth of fines. It is a fair amount and does not give the appearance that the HOA is assessing fines to punish “problem” individuals or to increase the HOA’s bank balance.
As homeowner’s associations come under more scrutiny, it is increasingly important that all of us, managers and board members alike, continue to be mindful that our policies and procedures are in line with the governing documents, local and state government, and industry standards. We will continue to provide updates as the House Select Committee on Homeowners Associations continues its review of HOA standards and practices.
Lets all make sure we aren’t giving the legislature reasons to impose their ideas or restrict your abilities to enforce your governing documents.