The Illinois Condominium Property Act empowers a board of managers, “to impose charges for late payment of a unit owner’s proportionate share of the common expenses, or any other expenses lawfully agreed upon, and after notice and an opportunity to be heard, to levy reasonable fines for violation of the declaration, by-laws, and rules and regulations of the association”. 765 ILCS 605/18.4(l).
Similarly,
the Illinois Common Interest Community Association Act states, “The board shall
have the power, after notice and an
opportunity to be heard, to levy and collect reasonable fines from members or
unit owners for violations of the declaration, bylaws, operating agreement, and
rules and regulations of the common interest community association”. 765 ILCS 160/1-30(g).
However,
before a fine can be imposed, there are four important aspects to the process: violation of an existing rule
and regulation (or provision in declaration or by-laws); notice of the
violation to the owner; an owner’s opportunity to be heard; and, the fine
amount.
A
large part of Keay & Costello’s practice involves collections for
condominium and homeowner associations.
While assessments may be the most important debt to collect for any
association, fines constitute another important collectable debt.
An association
should always be aware of its own rules and regulations. This may seem obvious, but sometimes associations
levy fines to accounts for conduct that does not actually violate an existing
rule and regulation. This is problematic. Associations
should not be demanding payment for a fine for a violation that does not exist. Additionally, including such fines will delay the collection process.
The
next step for an association is to send written notice of the violation to the
owner. The notice should advise the
owner of the violation, the time period to correct the violation, and the
consequences for failing to correct the violation. Associations frequently deviate from their
own rules and regulations regarding the fine notice procedure. It is best practice for an association to consult
its own fine notice procedure prior to issuing notice of the violation to the
owner.
An
important aspect of the notice of violation, is “an opportunity to be heard”. Both the Illinois Condominium Property Act
and the Common Interest Community Association Act mandate that “notice and an opportunity to be heard” be
granted to the accused unit owners BEFORE the issuance of a fine. As previously stated, an association should consult
with its own fine notice procedure regarding opportunity to be heard. It is generally best practice to give an
owner a certain amount of time to contact the association, or management
company, in order to dispute the violation fine. Another approach for an association is to set
a hearing for any violation fine at the next regularly scheduled board
meeting.
Lastly, an association needs to be aware of the fine
amount. Most associations’ rules and
regulations contain what is referred to as a “fine schedule”. Sometimes associations levy fines that do not
comport with the fine schedule. For
example, if the rules and regulations state a warning letter is the first communication
to be sent after the first rule violation, it will difficult for an association
to justify levying a fine on the first violation. As previously stated, this causes delay in
collection since the fine amounts will need to be adjusted in accordance with
the fine schedule.
If your association has any questions
about the fine levying process, or desires to update its rules and regulations
regarding the fine process, please feel free to contact our office and one of
our attorneys will be happy to assist you.