By Attorney Steven J. Adamczyk
Q: We have been experiencing an increase in the number of violations and the owners are pushing the Board to levy fines and suspensions. None of these owners are willing to serve on a committee to vote on the fines and suspensions. Can we collect a fine without a hearing?
H.R., Fort Myers
A: In my opinion, no. With respect to fines and suspensions, it is important to note that the statute provides exceptionally little guidance. We know from court decisions that a critical requirement is that the Association must provide due process, but it is difficult to know when you provide “enough” due process when the rules of civil procedure do not apply, the rules of evidence do not apply, and there are no applicable administrative code provisions to provide guidance.
What we do know is that the statutes provide that no fine or suspension may be imposed without providing at least 14 days’ notice and an opportunity for a hearing. Some attorneys have interpreted this provision to imply that you can levy a fine without a hearing so long as you provide the opportunity. In other words, part of the legal community believes that a hearing is only required after the owner requests a hearing, and that a fine is automatically levied if there is no request within the 14 days.
I can understand the reasoning and, more importantly, the efficiency behind this interpretation, but I do not believe it meets the requirements of the statute. The next few sentences in the statute provide that role of the committee is limited to confirm or reject the fine imposed by the Board, and further that a fine is due and payable after a committee vote. Thus, it is reasonable to assume that the committee’s role is not just to determine whether there was a violation, but also whether the amount of the fine, or the duration of the suspension, is appropriate. If a fine or suspension could be imposed simply by the failure of the owner to request a hearing, then there is no confirmation by an independent committee that the extent of the fine and suspension is appropriate.
Additionally, the answer the question also depends on your specific governing documents. I have seen many declarations and bylaws that clearly require a hearing every time, or clearly require warning letters and other self-imposed requirements that are not in the statute.
As a result, I always recommend a) that a condominium or homeowners association conduct the hearing whether it is requested or not; and b) check with its legal counsel to determine whether the governing documents contain any additional procedural requirements that are necessary to levy a fine or suspension. At a minimum, the hearing mitigates any future challenge to the process on the basis of due process and that the Association can argue that the committee provided a venue for the owner to provide a defense, as opposed to the Association arguing that due process was served by the inaction of the party being fined or suspended.
Q: We have a number of owners that did not pay their second quarter assessment payment and we are anxious to see if they pay the third quarter. If they do not pay the third quarter, we want to start the collections process but are sensitive to privacy concerns and discussing the debt at Board meetings. Do you have any suggestions?
G.B., Fort Myers Beach
A: This is a common question and most clients are surprised at the answer. In short, the Association is the creditor and is not subject to many of the debt collection laws applicable to debt collectors. When our firm sends a collections letter, it is subject to federal and Florida fair debt collection laws, but many of those same legal requirements would not apply to a letter from the Association to the delinquent owner. Additionally, there is a strong preference in the statutes that all ledgers are open to inspection by members. As a result, the financial ledgers and delinquency reports are not secret documents.
Many of our clients will use code names when discussing delinquent accounts or will only refer to the address or lot number and otherwise avoid the last name. This practice is fine, but it is not necessary.
There are two additional points. First, there is a Florida debt collection law that is relevant and prohibits the use of delinquency lists in an attempt to intimidate delinquent owners. Specifically, Florida Statutes section 559.72 provides that no person shall “publish or post, threaten to publish or post, or cause to be published or posted before the general public individual names or any list of names of debtors, commonly known as a deadbeat list, for the purpose of enforcing or attempting to enforce collection of consumer debts.” Thus, this information is not secret, but it should also not be used or promoted to enforce payment.
Second, note there is a very new law effective July 1 which requires the Association to send a statutory notice to delinquent owners before the Association can institute collection activity that would obligate the owner to pay attorneys’ fees and costs incident to collection. If you have any delinquencies, we recommend you consult your attorneys to determine how this new requirement will impact your policies and procedures for delinquencies.
Q: I live on a golf course and my roof and pool cage are routinely pelted by errant golf balls. When I approached the homeowners association to try and mitigate this potential danger, the association told me that it is not their problem. How can I compel them to help me?
A: Unfortunately, the most likely answer is that you are on your own. In most communities bordering a golf course, there is language in the covenants which includes capitalized disclaimers notifying owners that the home is adjacent to a golf course and golf balls may enter the property. These documents also typically provide an easement on to your lot so that golfers can come into your yard and look for those errant golf balls. And if the house is located roughly 220 to 250 yards from the tee box and on the right side of the hole, the Association would likely also respond that you had to expect that is what you were getting yourself into when buying a home on a golf course.
Another aspect to this problem is whether your association also governs the golf course. In many communities, the homeowners association governing the homes in the community is not the same corporation that oversees the golf membership and operation. If this is the case, then the association would be more correct in its position because the homeowners association has no jurisdiction over the golfers or the golf club in general.
Ultimately, this issue is dependent on the language in the specific covenants governing your community and the golf course. In order to determine whether you have any recourse against the association or the golf club, I would recommend you engage a licensed Florida attorney to review the applicable covenants.