Nine Myths Regarding Member Discipline

By Kelly G. Richardson, Esq. CCAL

One unpleasant but necessary aspect of board service is the imposing of discipline in response to unneighborly behavior by members. Here are nine myths regarding HOA discipline.

Myth #1: HOAs can impose any fine amount that seems appropriate to punish the violating homeowner. Truth: Civil Code Section 5850(c) limits monetary penalties (aka “fines”) to those as stated in the HOA’s written list of penalties in effect at the time of the violation. No list of fines? Then no fine can be imposed.

Myth #2: A committee can impose discipline. Truth: Under Civil Code 5855 discipline is imposed by the board. Some HOAs have enforcement agents or disciplinary committees sending out notices of fines, but those may be subject to challenge as violating Section 5855.

Myth #3: A fine can be imposed without a hearing so long as there is a “right to appeal” the notice. Truth: The disciplinary process under Civil Code 5855 is clear — before ANY discipline is considered or imposed, the homeowner must be given written notice of the hearing at least ten calendar days before that meeting.Section 5855 Subpart (d) says: “A disciplinary action … shall not be effective … unless the board fulfills the requirements of this section.”

Myth #4: Homeowners have the right to an attorney or representative present at their discipline hearing. Truth: No, the law does not give this right. HOA hearings are not court proceedings but are meetings of neighbors to address unneighborly behavior. Nothing in the law requireshearings to be conducted like criminal proceedings, with counsel, 5th amendment protections, and a jury of peers. I occasionally see governing documents allowing homeowners to bring counsel to hearings, but, generally, theseshould be meetings between homeowners.

Myth #5: Homeowners have the right to be present, so if they don’t attend the hearing it cannot proceed. Truth: The statute requires the homeowner to be given notice of the date, time, and place of the hearing (and the governing document provision violated), but it does not say that the board cannot proceed without the homeowner present. Boards should use their fair and reasonable judgment in determining whether to reschedule hearings, but rescheduling is not legally required.

Myth #6: HOAs can suspend voting rights and board eligibility in response to violations. Truth: HOAs cannot suspend homeowner voting rights, because of the prohibition of Civil Code 5105(g), and unresolved rule violations is not a board eligibility standard allowed by Sections5103(d)(2) and 5105(b),(c)(d).

Myth #7: The HOA cannot control tenant violations. Truth: The HOA has no direct control over tenants as nonmembers, but it can hold landlords responsible for the actions of their tenants or guests.

Myth #8: The HOA should keep imposing fines indefinitely until the problem is resolved. Truth: Fines are intended to deter, but when they don’t work, court action may be necessary. A cautionary tale is recited in the Ritter v. Churchill case from 2008, where the HOA fined the homeowner $200 per day until the balance reached $77,000… and the court ultimately found no violation, costing the HOA hundreds of thousands of dollars in attorney fees.

Myth #9: Boards must punish all violations. Truth: Boards may decide not to pursue minor violations if circumstances warrant and if owners are treated equally. Also, sometimes warnings are sufficient.

By Todd Shea President of the Santa Barbara Association of REALTORS®