Rule and CC&R Enforcement
by Scott A. Hunter, J.D.
Your association has rules and CC&Rs, but many owners are violating the rules and CC&Rs. What are the required steps to enforce the rules and CC&Rs? In answering this question, we will use the term “rule” to mean both the CC&Rs and the rules and regulations of your association. The following are the minimum steps that should be taken to enforce your association’s rules.
1. Neighborly Letter. Typically, the first letter sent to an owner regarding a violation should not come from an attorney demanding immediate compliance and threatening court action. The first letter should be friendly in nature and alert the owner to a violation that the owner may not realize exists. Most violations are resolved with this first neighborly letter. This first letter cannot levy any fines or monetary penalties.
2. Board Hearing. After the first or second neighborly warning letter is sent, your association can resort to stronger enforcement methods, including: levying fines, suspending voting rights, and suspending the use of common area facilities. You will need to refer to your association’s own rules, CC&Rs, and bylaws to check on the limitations placed on your board when imposing these penalties.
Before imposing any fines, suspensions, or other penalties, your board must hold a hearing and the owner must be invited to the hearing. A written notice of the board hearing must be given to the owner. The requirements for the notice of board hearing include the following:
A. The notice of hearing must be sent to the owner by prepaid first class mail or personally delivered at least ten (10) days before the board hearing.
B. The written notice must state: 1) the date, time and location of the board hearing, 2) the nature of the violation for which the owner may be disciplined, 3) that the owner has the right to attend the hearing, and 4) that the owner may address the Board at the hearing.
C. The hearing must be held in closed executive session of the board, if requested by the owner. Typically, for privacy and other concerns, the hearing should be held in closed executive session, even if the owner does not request it.
D. Following the hearing, the board must decide whether or not the owner should in fact be disciplined (including levying of monetary penalties or fines, suspension of voting rights, or suspension of common area facilities). Written notice of the board’s decision and of the fine or other discipline imposed must be sent to the owner by personal delivery or first-class mail within fifteen (15) days of the action by the board.
3. Internal Dispute Resolution. If the fines and other discipline do not have the intended result of compliance by the owner, then your association has the option of requesting that the owner and your association try to resolve the matter through your association’s “internal dispute resolution” procedures, generally referred to as “IDR” procedures. Civil Code section 1363.820 requires your association to adopt internal dispute resolution (“IDR”) procedures. If your association does not adopt IDR procedures, the law requires that the following IDR procedures must be used:
- The owner and a designated member of the board meet to try to resolve the dispute in good faith.
- IDR may be requested in writing by either the association or an owner.
- If IDR is requested by an owner, the association must participate.
- If IDR is requested by an association, then the owner may participate.
- Your association must pay all of the costs of IDR, if any.
- If the dispute is resolved, then a written agreement is signed by the owner and the designated board member. The agreement may be subject to later ratification by the board.
4. Request for Resolution. Before filing a legal enforcement action against an owner, generally, your association is required to offer to resolve the matter through arbitration or mediation. This offer is contained in a document called a “request for resolution.” Typically, the “request for resolution” offers the owner the opportunity to resolve the dispute or violation through mediation with a third neutral party. The costs of the mediation are paid by both the association and the owner. The “request for resolution” should be prepared by legal counsel to make sure it complies with legal requirements.
5. Legal Action. If the procedures discussed above have been attempted and the matter is still not resolved, then your association may need to file a legal enforcement action to obtain the owner’s compliance and to collect monetary penalties and attorney fees. However, most violations and disputes are resolved before court intervention is necessary.
Neighbor to Neighbor Policy: Your association should adopt a written policy that allows the board to use its wisdom and discretion when the conflict is between two disputing neighbors. Matters that are better resolved between disputing owners include such disputes as barking dogs (where only one owner hears that dog barking and the dog owner claim the dog is not barking), property line disputes, and similar issues. An effective neighbor to neighbor policy may require an amendment to the CC&Rs.
Uniform Enforcement: The California Supreme Court has said that an association must uniformly enforce its rules. Enforcement cannot be selective. For example, all other things being equal, your association cannot approve one house to be painted blue and disapprove the same color for another owner.
Enforcement Policy: California Civil Code section 1363.820 requires that your association adopt an internal dispute resolution policy. Creating and following such a policy can help your association resolve violations and disputes efficiently. Failure to create and to follow an enforcement policy will make it difficult for a court of law to give your association assistance with the enforcement of your rules.
Please seek legal counsel when developing an enforcement policy to make sure that it is in keeping with the law.
Violation of Law. Your rules cannot violate the law. For example, your rules may not discriminate by race. If a rule violates the law, then the rule is not enforceable.
Note: Most of the laws in this newsletter apply only to common interest developments (“CID”). If your association is not a CID, then the laws discussed herein may not apply to your association.
Inspection of Association Records