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.