Effectively Using Fines to Enforce Illinois Condo & HOA Bylaws

Effectively Using Fines to Enforce Illinois Condo & HOA Bylaws

Enforcing the governing documents plays a key role in successfully operating a community association. Unruly behavior by a unit owner can lead to unhappy neighbors and a potential decrease in property values. Therefore, it is imperative that a community association’s board understand the remedies at its disposal to address improper conduct. One potential remedy is to levy a fine against the disruptive unit owner. This article will address how a board may levy a fine and practical tips a board should use when doing so.

765 ILCS 605/18.4(l) of the Illinois Condominium Property Act and 765 ILCS 160/1-30(g) of the Illinois Common Interest Community Association Act

765 ILCS 605/18.4(l) of the Illinois Condominium Property Act and 765 ILCS 160/1-30(g) of the Illinois Common Interest Community Association Act provide that the board of managers of an Illinois community association may levy reasonable fines for violation of the declaration, bylaws, and rules and regulations “after notice and an opportunity to be heard.” Accordingly, a community association may impose a fine for a violation of an association’s governing documents, however, the association may only do so after providing an owner notice and an opportunity to be heard.

Failure to provide proper notice and an opportunity to be heard will likely invalidate a fine

The Illinois Court of Appeals has held that failure to provide proper notice and opportunity to be heard to an owner will invalidate a fine. In Bd. of Directors of Winnitt Park Condo. Ass’n v. Bourdage, 2021 IL App (1st) 192536, the unit owner was alleged to have been in violation of the condo bylaws. After sending notice with dates for a hearing at 6:30 p.m., the unit owner identified that she could not attend the hearing because she worked until 7:00 p.m. The board then unilaterally set a date for a hearing and did not tell the unit owner that it was specifically for her fine hearing. Assuming her fine hearing was on the agenda, the unit owner said she could not attend because she had a prescheduled vacation that day. Instead of picking a date and time that would accommodate the unit owner’s schedule, the board went forward with the fine hearing and the unit owner did not participate. After the imposition of a fine and a subsequent eviction, the court held that the eviction action filed after the imposition of the fine was improper because the board’s actions did not provide the unit owner with “notice and an opportunity to be heard.” Accordingly, community associations must ensure that they provide a unit owner with a notice and an opportunity to be heard prior to levying a fine.

Practical Tips

As Bourdage represents, a community association will face consequences if the community association levies a fine unlawfully. To avoid any claims of arbitrariness from a unit owner, a community association should adopt a fine policy or a fine schedule which clearly sets forth the process for imposing a fine and the exact amount a board may fine. Additionally, to ensure that the community association is adopting proper protocol, the association should take the following steps in the event a bylaw violation has occurred:

1. 1. Review the community association’s governing documents to confirm that the unit owner’s actions violate the governing documents.
   2. Review the enforcement provisions in the governing documents to determine whether the association may impose a fine for such a violation.
   3. If provided for in the association’s governing documents, an initial demand letter should be sent to the owner setting forth the bylaw violation and requesting the owner cease the conduct that is in violation of the governing documents. The association should engage their management company or an experienced community association attorney to draft an initial demand letter. Often times, a unit owner will stop such conduct upon receipt of an initial demand letter. An initial demand letter should usually provide the unit owner between 30-35 days to cease the conduct that is in violation of the governing documents.
   4. If the unit owner is unresponsive to the initial demand letter and the conduct continues, a notice letter should be sent to the unit owner. The notice letter must provide: (i) the substance of the violation; (ii) the right to be heard before the board if the owner contests the violation; (iii) the opportunity to cross-examine the witness who brought the violation to the attention of the board or its agent or the person who saw the violation occur; and (iv) the right to be represented by an attorney at the hearing.
   5. Once a hearing is set, the hearing should take place at a properly noticed board meeting. The board should ensure that the hearing is conducted appropriately and fairly and it is best practice that the association’s attorney attend the hearing.

Conclusion

A community association who effectively uses fines can deter unruly behavior. However, prior to imposing a fine, a community association should look to its governing documents to determine whether a fine may be imposed for the conduct. If a community association finds that the governing documents permit the levying of a fine, the board should be sure to provide adequate notice and an opportunity to be heard to the unit owner. Failure to do so may result in consequences to the association as seen in Bourdage. Prior to levying a fine, a community association should discuss the alleged bylaw violation with an experienced community associations attorney who can interpret the association’s governing documents to determine the necessary steps the association should take to quell the alleged violation. The attorneys at Hirzel Law, PLC. have the experience to guide a community association’s board through this process.

 

Jeremy Fernando is an Associate Attorney at Hirzel Law, PLC. Mr. Fernando is licensed to practice law in the State of Illinois. He concentrates his practice on community association law, condominium law, homeowners association law, and real estate law. Mr. Fernando’s legal career includes serving in corporate practice where he represented insurance companies and institutional investors in U.S. and cross-border private placements of securities, including transactions in the Netherlands, England, Ireland, Australia, and Germany. Mr. Fernando earned his Juris Doctor from Marquette University Law School, where he graduated with honors and ranked in the top 15% of his class. He also served as an Associate Editor of the Marquette Law Review. Mr. Fernando is committed to providing effective legal representation to his clients and is passionate about helping communities navigate complex legal challenges. He may be reached at 312-552-7669 or jfernando@hirzellaw.com.