HOA Information Station: WHY DO HOAs HAND OUT FINES?

March 21, 2016    Margo Crummack CEO/Principal    Education

WHY DO HOAs HAND OUT FINES?

I get this question often and I always start my answer with the most important fact: fines are not a money-making opportunity for an HOA. 
Remember, board members are your neighbors and they're not trying to harass their neighbors or nickel and dime you. Fines do serve a purpose and below you’ll find how they benefit the community.
 
1. TURN TOMORROW INTO TODAY. Fines do is get a latent homeowner’s attention in hopes that it's the push needed to reverse the infraction. In many cases, and one that I agree with, once the infraction is ameliorated, then the fine is reimbursed.
 
2. INSPIRE A PLAN. Give the homeowner a clear plan and encourage them fix it the issue. An example: contact management to cure whatever property issue has come to their attention.  This could be anything from putting away trash cans, to yard maintenance, house painting, etc. 
 
3. GIVE VALUABLE INSIGHT. Let the homeowner know it’s important to fix any infractions, especially if it’s related to curb appeal, because it directly relates to the value of their home and the community.

4. RULE REMINDER. There may also be a behavioral issue the Board is attempting to resolve. For example: renting rooms to multiple persons, excessive noise complaints, causing damage to common areas and unleashed pets making neighbors uncomfortable. If these issue are not effectively managed, they can cause a community to gain a reputation for not being a peaceful place to live and cause the primary homeowner to vacate and rent out their unit.
 
5. AWARENESS. In many instances homeowners can be completely unaware there is a problem and will gladly work with their property management and the HOA Board to implement a happy and peaceful conclusion. We all have busy lives and understand that items can be overlooked sometimes. 
 
All the above reasons make sense for the homeowner and the community, but sometimes a fine doesn’t get paid. What then? In these cases, fines remain on the homeowner’s account and are non-transferable just like assessment payments.  The fine can be collected by the HOA when the owners eventually sells, but at that point we oftentimes see homeowners negotiate to correct the matter and close the issue.
 
If you want to see the line item for fines from your HOA, they should be reflected on the Income Statement so the Board is aware of what is outstanding.  They would not be included in the Assessment: Membership Dues revenue line.
 
Bottom line, infractions and fines are not fun for HOAs, homeowners, or the community, but they are necessary.  If we want to create communities that work together for a better environment, then we should all feel responsible to resolve any issues that may arise.
 
 
ABOUT MARGO CRUMMACK
Margo co-founded Crummack Huseby Property Management, Inc., over 17 years ago when she saw a need for a more customized and personalized approach to community management. Margo along with co-founder Sandra Woods Huseby's mission was to create a breath of fresh air within their industry: to create an open dialogue with communities, to focus on the core of a community, and to customize management styles to suit what’s best for that particular community.
 
As an expert in New Project Development, Margo is often invited to consult from day one. Her work ethic is respected and valued—when she says she’ll do it, it gets done. One of Margo’s crown jewels is the beautiful 20-Merchant Builder Master Planned Community that she consulted on back in 1999 and still manages today.

Always advocating for continued learning, Margo encourages an environment of “training, motivating, and innovating” for herself, Crummack Huseby’s employees, and their clients. She is also a well-respected speaker and educator within the industry, serving on the Education Committee for CAI-OC and CACM’s Education Review Committee.  

ABOUT CRUMMACK HUSEBY
Our team of HOA experts and community managers always puts people first. We know you’re not just a board of directors but you’re a part of the community, working together with your neighbors. Crummack Huseby Property Management, Inc., treats you like a neighbor too, respecting your decisions and collaborating to create a unique homeowner experiences all year long. Our unmistakable team and unparalleled approach to HOA management services sets us apart. Let us help your community stand out. When you’re ready for us, we’ll be here for you.  For more information, visit ch-pm.com or call 888-399-9430 Toll Free

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