Summary : Under the current paradigm of H.O.A. law, H.O.A. corporations can impose non-judicial fines on homeowners for breach-of-contract.
But when an H.O.A. corporation violates the rules — or the law — a homeowner must file a lawsuit in an Open Court of Law, prove their case, and demonstrate that they suffered damages.
If non-judicial fines are necessary to enforce compliance with the rules, then homeowners should be able to impose fines on H.O.A. board members.
Or, to create an equity of legal remedies, H.O.A. fines should be banned.
In my opinion, community association boards and owners should both be subject to the same requirements to enforce restrictive covenants. If state legislatures repealed their fine and foreclosure statutes, the boards would not be left without a remedy. They would not go bankrupt. Chaos would not emerge. They would simply have to get in line at the courthouse and play by the same rules as other property owners seeking to protect their rights under the covenants or common law.
- John Cowherd. "Are Legal Remedies of Owners and HOAs Equitable?" Words of Conveyance. July 20, 2017. Mr. Cowherd is an attorney specializing in real estate and contract rights in Virginia.
The cost to the State of doing so would be zero. By comparison, an out-of-court H.O.A. dispute resolution process would cost over $ 2 million per year and require 20 additional employees under the Department of Regulatory Agencies (DORA).
A Man’s Home Is His Castle
Colorado Homeowners Protection Act
Equity of Legal Remedies
In Colo. Rev. Stat. § 38.33.3-XXX.X add the following :
(1) (a) A homeowners’ association shall not have the authority nor the power to assess and collect non-judicial fines for violations of the Declaration, Restrictive Covenants, Bylaws, and other rules and regulations of the association, regardless of what is written in the Declaration and other governing documents of the association.
(b) Any statutory authority granted to H.O.A. corporations by the State of Colorado to assess and collect non-judicial fines is hereby revoked.
(c) Nothing in this section shall be construed as to prohibit an H.O.A. corporation from filing a Complaint and bringing suit against a homeowner in an open Court of law for alleged violations of the Declaration, Restrictive Covenants, or any other legally enforceable rules and regulations of the association; and being awarded injunctive relief and/or declaratory relief and/or actual damages and/or costs and reasonable attorney fees by the Court.
(d) Void Agreements. Any agreement, understanding, or practice, written or oral, implied or expressed, between an H.O.A. corporation and any homeowner that violates the rights of any homeowners as guaranteed by this section is void.
(e) Penalty. Any person who directly or indirectly violates any provision of this section is guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than one thousand dollars, imprisonment in the county jail for not more than ninety days, or both a fine and imprisonment for each offense.
(f) Civil Remedies.
(I) Any person injured as a result of a violation or threatened violation of this section may bring suit in a court of competent jurisdiction for injunctive relief, to recover all damages, including costs and reasonable attorney fees, resulting from the violation or threatened violation, or both.
(II) The remedies provided by this section are independent of, and in addition to, any other penalty or remedy established by this section.
(g) Investigation of Complaints – Prosecution of Violations. The Attorney General or the District Attorney in each judicial district shall investigate a complaint of a violation or threatened violation of this section, prosecute any person violating this section, and take actions necessary to ensure effective enforcement of this section.