THE NEUTERING OF DISCIPLINARY ACTION (July 2025)

The Legislature has struck a substantial blow to the enforcement of governing documents by gutting the effectiveness of its primary tool, monetary penalties (fines) and other disciplinary action.  Effective immediately, monetary penalties are capped at $100 per violation and cannot exceed the lesser of that maximum or the monetary penalty stated in the fine schedule.  The one and only exception is for violations that may result in an “adverse health or safety impact on the common area or another member’s property.”  Before utilizing this exception, the Board must, in an open Board meeting, make a written finding specifying the adverse health or safety impact.  No late charge or interest can be charged on a monetary penalty.

Further tying the Board’s disciplinary hands, the Legislature mandated that the offending member have an opportunity to cure the violation before the meeting at which the Board will consider or impose discipline.  If the member cures the violation before the meeting, the Board cannot impose discipline, neither monetary fine or otherwise (e.g., suspension of membership privileges or voting rights).  This requirement diminishes the effectiveness of disciplinary action in discouraging future violations.

If curing the violation would take longer than the time provided before the meeting, the Board cannot impose discipline if the member provides a “financial commitment to cure the violation.”  The Legislature did not define or provide any guidance on the meaning or parameters of this “financial commitment.”  This ambiguity inevitably will lead to doubt and disputes over whether the owner has provided sufficient “financial commitment,” leaving Boards in a quandary as to whether they can impose discipline when the member offers something that the owner labels a “financial commitment.”

If the Board and the member are not in agreement after the meeting, the member has the right to request internal dispute resolution.  If the Board and the member are in agreement after the meeting, the Board must draft a written resolution, which is signed by the Board and the member.  The written resolution binds the association and is judicially enforceable.  These additional requirements increase the burden on the Board.

The time to provide written notification of a decision to impose discipline is reduced from 15 days to 14 days.  Although this seems to be a minor change, it can create a trap for those who are unaware of the change and wait until the fifteenth day.