Violations and Enforcement

Covenant Enforcement Made Easy

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Category: Violations and Enforcement

Enforcing covenants of an association is one of the most difficult jobs a board of directors must embark upon, while at the same time being one of the most critical functions of the board. Most declarations of common interest communities specifically state that the purpose of the association is to protect and enhance property value within the community, but how do you do that while maintaining good relationships between the neighbors in the community?  All associations are required to have a policy in place setting forth what steps will be taken to enforce an association’s covenants. 

While enforcement of covenants is association specific as each association is permitted to establish its own policy, the anatomy of good covenant enforcement practices should encompass the following:

Warning Notice.  Prior to taking any action to enforce the covenants and or the rules and regulations of the association, the association must first provide notice to the owner or to the alleged violator.  The warning notice should indicate at a minimum, what the alleged violation is, the way the owner or alleged violator may come into compliance and a reasonable amount of time for the owner/alleged violator to come into compliance.  

Hearing Notice.  If the alleged violation is not cured within the time frame set forth in the initial warning letter, the association may then send a second letter to the alleged violator.  This letter should again, clearly explain the violation and explain what the owner can do to cure the violation. If there is a fine associated with this non-compliance, the association must indicate in the letter that a fine may be imposed after this notice and an opportunity for a hearing.  In accordance with North Carolina law, an association may not levy a fine any time prior to giving notice and an opportunity for a hearing.  The association’s fine letter should read something similar to, “The association has attempted to contact you regarding the condition of the paint on your home.  This paint may constitute a violation of the covenants for Happy Acres Owners Association.  You are invited to attend a hearing to discuss this matter on January 1, 2014.  If a violation is found to exist, a fine may be levied for the violation.”  The North Carolina Planned Community Act mandates a certain amount of procedural due process prior to levying a fine.  At the hearing, the person hearing this violation must make a decision based upon the information presented.  

The Hearing.  The North Carolina Planned Community Act requires each owner be given an opportunity for a hearing. If the Owner requests a hearing or attends the hearing that was scheduled, the association representatives conducting the hearing should listen to the evidence presented by both the owner and the person (board member, manager or owner) that first reported the violation. The owner may then address the person conducting the hearing to explain either it is not a violation, or explain any mitigating factors that may impact the decision of the person conducting the hearing. The person conducting the hearing may then rule on the matter as the existence of a violation and if a violation exists, may levy a fine in an amount specified in the association’s covenant enforcement policy.  

It should be noted that the requirement is for an opportunity for a hearing. If the owner fails to attend a scheduled hearing or fails to schedule a hearing, the association should still go through the hearing process and debate, in executive session at a board meeting whether or not a violation exists. The board should not rule on the existence of a violation without noting in the minutes of the meeting that the situation was discussed.  

Who conducts the Hearing?  North Carolina law requires that all hearings be conducted by either the Board or an adjuticatory panel. It should not, however, be anybody that may benefit from either finding a violation to exist or that may benefit from a determination that a violation does not exist.  

The Hearing Results. The North Carolina Planned Community Act requires that you notify the owner in writing, the results of the hearing.  Fines may begin 5 days after the hearing results notification.

While enforcement of the covenants is one of the most contentious issues a board must face, using a consistent approach, following the association’s policies and listening to the owners concerns will establish reasonable expectations and a certain level of fairness that will make the job go smoother.

Architectural Design Review

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Category: Violations and Enforcement

Most community associations have a set of guidelines that spell out its architectural design standards and review processes.  These guidelines should reflect a balance between individual rights and the good of the entire association.  They generally explain:

• The association’s authority to review designs.
• Changes that must be approved.
• The design review process.
• The compliance process.
• Specific design considerations and practices.

Guidelines should be reviewed periodically and amended as needed because appropriate materials and styles change with time.

Design considerations:  Associations judge design changes by three criteria: requirements, principles and practices.  The following are common, although not universal, definitions.

Design requirements are basic objectives comprising the most important element of an association’s design review criteria.  They are stated in the association’s governing documents and list what requires approval.

Design principles determine whether a proposed design meets the design requirements and provide some flexibility.  The principles might include brief, broad, objective statements about compatibility, scale, color, materials, quality, etc.

Design practices are specific methods for achieving the requirements and principles in common design situations.  Though design practices are not a requisite part of the guidelines, they can be helpful because they outline what is acceptable.

The design review committee:  Large associations usually have a design review committee.  Some operate independent of the board, but follow their guidelines.  Common duties include:

• Drafting policy guidelines and amendments, advising applicants and educating members about the design review process.
• Processing routine applications, reviewing applications before work begins, examining property improvements and monitoring changes.
• Monitoring construction for conformance to approved proposals and specified conditions.
• Touring the community periodically to verify and identify design violations. 

Many associations create a manual that contains both design principles and acceptable practices that address specific types of improvements, such as fences and decks.  The manual is useful for homeowners and the design review committee.

Enforcement:   Most associations use a moderate, problem-solving, results-oriented approach to find reasonable solutions to common problems and encourage members to cooperate.

Design review committees inspect, verify and photograph alleged violations before sending a friendly letter to the owner – and a courtesy copy to tenants if the property is leased – asking for correction.  The letter should identify the violation and the deadline for correcting it.  If a simple solution is available, the committee may offer suggestions.  If an owner can’t correct the violation within the prescribed time frame, most committees will work with the homeowner to develop a mutually-acceptable schedule.

When homeowners fail to comply or respond to notices, they can expect a friendly personal visit from a committee member and a second or third letter.  If owners still don’t comply, the association may revoke non-essential privileges or refer the matter to an attorney for appropriate legal action, including mediation, arbitration or injunctive relief in court to correct the violation.

Adopting & Enforcing Rules

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Category: Violations and Enforcement

Community association rules govern activities in a community’s common areas or activities that affect common elements.  They are enforced by the association board, which is obligated to preserve and protect the harmony, architectural integrity and assets of the community.  Importantly, that can help protect property values.

Adopting rules and seeing that residents comply with them helps the board meet this obligation.  Of course, making and enforcing rules is a process best appreciated by being reasonable.  If a rule is an understandable restriction with a purpose, residents are more likely to appreciate and follow it.  Reasonable rules are logical, relevant, rational, fair, enforceable and sensible.

Rules should only be enacted when necessary; it’s best to regulate as few activities as possible.  Additionally, boards should be flexible enough to allow rules to be changed and even rescinded as the needs and interests of the community evolve.

Compliance is easier for residents if the rules specify correct behavior rather than just state what isn’t permitted.  Rules should be stated positively, encourage voluntary compliance by adding information about what residents can do instead.  The best rules are written in plain language without legal jargon – they’re brief and straightforward.

Good rules are balances – neither too restrictive nor too broad.  The more narrowly focused or specific a rule is, the greater the opportunity for residents to break it inadvertently.  Similarly, the broader a rule, the less guidance it provides.

When drafting rules, boards should begin by identifying a problem or a need and deciding whether a rule will address it.  They should ask themselves, “Does our association really need this new rule?”  To answer that question, they review the association’s governing documents and existing rules to ensure the problem isn’t already addressed elsewhere.

Once the board has drafted the rule – but before it’s enacted formally – the association should circulate it to owners and residents and ask for comments.  Board members should discuss the rule at an open meeting where they can explain their rationale and encourage owners to share their opinions.  Depending on owner response, they may amend the rule and begin the process again.  If the board decides to move ahead, the final rule will be published well before its effective date to give all residents time to comply.

When the rule is in place, residents must follow it and boards must enforce it uniformly and consistently.  Inconsistent application of the rules invariably divides residents and promotes discord.

Not enforcing a rule makes the association seem ineffective and arbitrary.  Plus, failing to enforce a rule invalidates it, so boards are usually motivated to see residents comply.  That doesn’t mean a board can’t be flexible and make appropriate exceptions when necessary.  However, exceptions should be reserved for exceptional circumstances.

Rules enforcement includes due process – notify residents of issues, allow them time to comply and provide them a chance to be heard and represented.  Wise associations start with friendly notice since many violations are unintentional.

What’s Going On In There?

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Category: Violations and Enforcement

What is the proper role of your community association and its board of directors when it is suspected that there may be something illegal going on inside an owner’s unit?  For instance, a neighbor may believe he smells marijuana smoke coming from the unit next door.  Or perhaps a board member has observed an inordinate number of televisions, stereo equipment and computers being funneled into the unit.  Or worse, maybe screams can been heard coming through the common walls.  It can be difficult to know where to draw the line between acting to manage the overall welfare and livability of the community and stepping into a more active role as far as enforcing laws and/or preventing crime in order to provide for the safety of your community’s residents.

As a baseline, it should be remembered that the functions of the association and its board of directors are for the most part determined by the governing documents of the Association.  The protective covenants, bylaws and articles of incorporation set forth the powers, authorities and duties of the association and the board.  Therein, the association will most likely be charged with the duty of maintaining and managing the common areas in the community.  The association assumes dominion and control over these common areas, and as a natural result has a degree of responsibility to provide for the safe coming and going of residents through these common areas. 
This responsibility typically manifests itself in things like the removal of snow from the common walking areas, providing adequate lighting, installing railings and fencing, perhaps installing and maintaining security systems like key passes or fobs.  Another example of this may be that your association manages and maintains a security gate into the community.  These are all common examples of operational duties required of associations in their governing documents which have the effect of providing for the safety of its members.  It is important to remember that where an association takes on these duties and represents to its members that they can rely upon the association’s representations that their safety is being provided for, the association can incur liability by failing to meet its obligations and not fulfilling the role it has taken on.

However, it is important to point out that the duty of providing maintenance in the common areas is something that flows from the very specific authority granted to, and management duties imposed upon, the association in its governing documents.  There are varying levels of management and control responsibilities that can be imposed upon an association, and every set of governing documents is different.  But these management and control responsibilities must be distinguished from a very different concept called police powers.  An authority exercising police powers is essentially making laws and compelling obedience to those laws through legal sanctions, the use of physical force, or other forms of coercion.  The foregoing definition does not describe the function of a homeowners association or condominium association.

Associations are not making laws and they have no power to enforce the federal, state or local government’s criminal laws or penal codes.  The police powers described above belong to the federal, state and local government authorities and it is they that are properly trained in law enforcement techniques, investigation, the use of surveillance equipment, the use of weapons, and necessary or deadly force.  Simply put, the association and its board of directors would be acting well outside the scope of its powers and authorities if it attempted to enforce criminal laws.  And there would be obvious potential liability for attempting to do so.  If an association wrongfully attempted to accuse an owner of a crime, or forcibly detain an owner for a suspected crime, such owner could seek to prosecute the association or its agents for such actions.  Not to mention, there are physical safety issues for the board members and/or managing agents themselves if they attempt to get involved in stopping a suspected crime, or detaining a suspected criminal.  Leave the police work to the police.

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