Independent fining committees are appointed by the board


Question: I live in an HOA community. In a recent column it was stated that, apparently, an infraction committee can be appointed by the board. Please let us know the statutory basis for that. — M.H.

Answer: The HOA Act, at Section 720.305, expressly states that “a fine or suspension levied by the board of administration may not be imposed unless the board first provides at least 14 days’ notice to the parcel owner and, if applicable, any occupant, licensee or invitee of the parcel owner, sought to be fined or suspended and an opportunity for a hearing before a committee of at least three members appointed by the board…” That is, it’s directly stated in the statute that the committee is to be appointed by the board. The Condo Act, at 718.303, contains nearly identical language, as does the Cooperative Act at 719.303 (the Cooperative Act typically mirrors the Condo Act in most respects, which is why I rarely reference it separately).

Further, most bylaws will expressly state that either the president or the president with the consent of the board, has the power to establish committees. So, in all instances, it is clear that the board establishes the fining committee.

Note, of course, that there are very specific restrictions with respect to whom the board may appoint to such a committee. Pursuant to all acts, the members of the independent committee may not be officers, directors, employees of the association or the spouse, parent, child, brother or sister of an officer, director or employee.

I can tell you from experience that fining issues confuse many board members, owners and LCAMs alike, for several reasons. First, many people intuitively want to appoint a committee for the purpose of reviewing violations and imposing fines, thinking that having such a committee creates needed separation from the board. But, in associations where such an independent committee is tasked with imposing fines, I often see that same committee used as the “appeal” committee, as well. Sometimes these procedures are followed because they are specified in the (often outdated) governing documents, and sometimes they are just procedures established with no consideration of the statutory requirements. But, I always recommend that my clients follow the procedures outlined in the statutes first, and only deviate from those procedures when the governing documents provide for additional procedures that do not conflict with the statutory instructions (for example, many bylaws specify that an owner may be represented by counsel at the fining committee hearing — there is no such right in the general law).

Pursuant to the statutes, it is the “association” that levies fines and imposes suspensions. The association is as directed and controlled by the board of directors; and so, typically, it would be the board that hears violations and determines whether a fine or suspension should apply (up to the statutory maximums, of course). Conceivably, a board could appoint a committee and delegate to it this authority, but that committee cannot reasonably be the same “independent” committee that ultimately would hear an appeal. That is, you would need to have one committee (let’s call it a “fining” committee) tasked with imposing fines, and then a second committee (let’s call it a “grievance” committee) that provides the opportunity for review. Usually, however, the board itself would be the entity that imposes fines and suspensions, as determined at each board meeting.

If the board imposes a fine or suspension, the statute states that you must then provide the owner at least 14 days’ written notice of the penalty, and an “opportunity for a hearing” before the independent committee. There is some disagreement among lawyers as to whether this means you are required to hold the independent committee meeting, whether or not such a hearing is requested and whether or not the owner to be fined even attends; or whether the “opportunity” language simply requires you to offer the person the “opportunity” to request a hearing within the 14-day deadline.

My personal view is that the statue has two separate requirements — first, you must provide at least 14 days’ written notice of the fine or suspension before it is imposed, and second, you must provide the owner with an opportunity for a hearing. Informing the owner, in writing, that they may request such a hearing would seem to be entirely consistent with the statute, and I have spoken with people at the Division of Condominiums who have taken the same position (I do not know whether the Division has ever taken an official position on this, however). Other attorneys disagree and recommend that the association have the independent committee approve or reject every penalty, whether or not requested to do so by the owner. Your community should check with its own attorney and follow his or her advice.

Ryan Poliakoff is a co-author of “New Neighborhoods — The Consumer’s Guide to Condominium, Co-Op and HOA Living” and a partner at Backer Aboud Poliakoff & Foelster LLP. Email questions to condocolumn@gmail.com. Please include your hometown.



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