Mississippi HOA fine rules

What this means for homeowners

• Mississippi has no homeowners association act and no statute governing HOA fines. Mississippi does have one statutory article written specifically for homeowners associations, Miss. Code Ann. §§ 79-11-751 to 79-11-761, but it regulates how association money is held and accounted for and how the board may meet, not how an owner may be disciplined: a managing agent must deposit association funds in a trust fund account kept in a financial institution insured by the Federal Deposit Insurance Corporation, "shall not commingle the funds of the association with the managing agent's own money or with the money of others that the managing agent receives or accepts," must "maintain a separate record of the receipt and disposition of all funds described in this section, including any interest earned on the funds," and must report to the association before every regular meeting and at any other time the association asks; transfers of more than $10,000.00 of an association's total combined reserve and operating account deposits may not be authorized without prior board approval; at all regularly scheduled meetings the board must "review the latest account statements prepared by the financial institutions where the association has its operating and reserve accounts"; the board may hold meetings by electronic transmission or other means of remote communication unless the governing documents prohibit it; and the association must maintain fidelity bond or comparable insurance coverage for its directors, officers and employees, unless a majority of the board, at a regular or special meeting of the association, votes not to maintain it. The only remedy the article states is that "The prevailing party in an action to enforce this section shall be entitled to recover reasonable legal fees and court costs." Nothing in that article mentions fines, notice of a violation, a cure period, a hearing, or any right of an owner to request records. One other Mississippi statute names homeowners associations and is likewise silent on fines: Miss. Code Ann. § 77-3-1(2) removes "the distribution of water by an eligible homeowners association only to its residents" from public-utility regulation. There is no Mississippi statute that requires an association to give notice before levying a fine, that sets a cure period, that guarantees a hearing, or that caps the amount of a fine. Whether a Mississippi homeowners association may fine at all, and what steps it must take first, is set by the recorded declaration, covenants, conditions and restrictions, bylaws and rules, together with the Mississippi Nonprofit Corporation Act for an association incorporated under it, which supplies corporate mechanics rather than fine procedure.
• The only common-interest-community statute Mississippi has is the condominium statute, and it contains no fine provision either. "This chapter shall be known and may be cited as the 'Mississippi Condominium Law'" (Miss. Code Ann. § 89-9-1), a 1964 enactment carried forward from the 1942 Code. Its nineteen sections address what a condominium is, recordation of the plan, conveyance of units, partition, assessments and liens, taxes, zoning and sale for partition. Nothing in the chapter states a notice-before-fine, cure-period, hearing or fine-cap requirement.
• What the condominium statute does instead is let the recorded declaration create the enforcement machinery. "The owner of a project shall, prior to the conveyance of any condominium therein, record a declaration of restrictions relating to such project, which restrictions shall be enforceable equitable servitudes where reasonable, and shall inure to and bind all owners of condominiums in the project" (Miss. Code Ann. § 89-9-17). The declaration may provide for management by the owners, an elected board of governors or a management agent, "for voting majorities; quorums, notices, meeting dates and other rules governing such body or bodies," and as to that management body may provide "For the powers thereof, including power to enforce the provisions of the restrictions" (§ 89-9-17(1), (2)(i)). On money, the declaration may provide "For reasonable assessments to meet authorized expenditures of any management body, and for a reasonable method for notice and levy thereof, each condominium to be assessed separately for its share of such expenses in proportion, unless otherwise provided, to its owner's fractional interest in any common area" (§ 89-9-17(5)(i)). Those are permissive grants to the drafter of the declaration, not statutory duties owed to an owner facing a fine. The one place the chapter mentions penalties, it leaves both their existence and their size to the declaration as well: "A reasonable assessment upon any condominium made in accordance with a recorded declaration of restrictions permitted by Section 89-9-17 shall be a debt of the owner thereof at the time the assessment is made" (Miss. Code Ann. § 89-9-21), and the amount of that assessment "plus any other charges thereon, such as interest, costs, attorneys' fees, and penalties, as such may be provided for in the declaration of restrictions," becomes a lien on the condominium when the management body records a notice of assessment with the chancery clerk, a lien enforceable by sale conducted under § 89-1-55 in the manner of a power of sale in a mortgage or deed of trust "or in any other manner permitted by law." Mississippi therefore supplies a collection mechanism but no procedural protection before a charge is imposed.
• The Condominium Law is the condominium chapter, and there is no corresponding chapter for single-family homeowners associations. The similarly named Real Property Owners Protection Act in the next chapter, Miss. Code Ann. §§ 89-10-1 to 89-10-7, is not an association statute: its four sections are a short title, a section on definitions, the right to manage property, the crime of squatting, removal of a squatter and a hearing, a section barring accrual of property rights by a squatter, and a section creating the crime of unlawful use, control or management of real property. Nothing in it concerns homeowners associations.