New York HOA fine rules

What this means for homeowners

• New York has no homeowners association act. For a subdivision of separately owned houses governed by recorded covenants, no New York statute requires the association to give notice before levying a fine, sets a cure period, guarantees a hearing, or caps the amount of a fine. Whether such an association may fine at all, how much, and what steps it must take first are set by the recorded declaration, covenants and restrictions, bylaws and rules, together with the Not-for-Profit Corporation Law for an association incorporated under it, which supplies corporate mechanics rather than fine procedure. That law does not supply a discipline procedure: it provides only that "Except as otherwise provided in this chapter or the certificate of incorporation or the by-laws, membership shall be terminated by death, resignation, expulsion, expiration of a term of membership or dissolution and liquidation under articles 10 and 11" (N-PCL § 601(e)), without prescribing notice, a hearing or any other step before expulsion.
• New York's only common-interest-community statute is the Condominium Act, N.Y. Real Property Law article 9-B, which governs condominiums and not a development of separately owned lots — and even on the condominium side New York confers no power to fine. The Act's enforcement section is a right to sue: "Each unit owner shall comply strictly with the by-laws and with rules, regulations, resolutions and decisions adopted pursuant thereto. Failure to comply with any of the same shall be ground for an action to recover sums due, for damages or injunctive relief or both maintainable by the board of managers on behalf of the unit owners or, in a proper case, by an aggrieved unit owner. In any case of flagrant or repeated violation by a unit owner, he may be required by the board of managers to give sufficient surety or sureties for his future compliance with the by-laws, rules, regulations, resolutions and decisions. Notwithstanding the foregoing provisions of this section, no action or proceeding for any relief may be maintained due to the display of a flag of the United States measuring not more than four feet by six feet" (Real Property Law § 339-j). The list of what condominium by-laws must contain in § 339-v(1) includes no fine, notice, cure-period or hearing item, and § 339-v(2) makes the further by-law subjects permissive. New York cooperative apartment corporations are a third arrangement again, outside article 9-B.
• Two New York statutes are addressed expressly to homeowners' associations, but both limit what an association may prohibit rather than how it may punish. On solar, "A homeowners' association may not adopt or enforce any rules or regulations that would effectively prohibit, or impose unreasonable limitations on, the installation or use of a solar power system. A restriction on use which effectively prohibits the installation or use of a solar power system is unenforceable and shall be void as contrary to public policy" (Real Property Law § 342(2)), subject to a common-property exception (§ 342(3)), and "Any denial of a homeowner's installation of a solar power system by a homeowners' association must include a detailed description of the exact basis for rejection in writing with specific examples of the homeowners' association's concerns, if applicable" (§ 342(4)). On charging stations, § 343(2) is worded in parallel and lists as unreasonable any restriction that "inhibits the electric vehicle charging station from functioning at its intended maximum efficiency" or that increases installation or maintenance cost by more than ten percent of the initial installation cost (§ 343(2)(a), (b)); "If approval for the installation or use of an electric vehicle charging station is required by a homeowners' association, the application for approval shall be processed and approved by the association in a manner prescribed by the association and shall not be willfully avoided or delayed. The approval or denial of an application shall be in writing. Any denial of a homeowner's application shall include a detailed description of the exact basis for the denial and shall include specific examples of the homeowners' association's concerns, if applicable. If an application is not denied in writing within sixty days from the date of receipt of the application, the application shall be deemed approved, unless that delay is the result of a reasonable request for additional information" (§ 343(4)); and "In any action by a homeowner requesting to have an electric vehicle charging station installed and seeking to enforce compliance with this section, the homeowner shall be awarded reasonable attorney's fees if he or she prevails" (§ 343(6)). In both sections a "restriction on use" reaches "the by-laws of a homeowners' association" and "any rules or regulations adopted by a homeowners' association" as well as deeds and contracts (§§ 342(1)(a), 343(1)(a)).
• The one New York statute that gives homeowners association members an enforceable right against their own association concerns records, and it reaches only incorporated associations. Under the Not-for-Profit Corporation Law, "Any person who shall have been a member of record of a corporation for at least six months immediately preceding his demand, or any person holding, or thereunto authorized in writing by the holders of, at least five percent of any class of the outstanding capital certificates, upon at least five days written demand shall have the right to examine in person or by agent or attorney, during usual business hours, its minutes of the proceedings of its members and list or record of members and to make extracts therefrom" (N-PCL § 621(b)), and "In addition to those documents described in paragraph (e) of this section, members of a homeowners association incorporated pursuant to the provisions of this chapter shall also be entitled to review, upon request to the homeowners association's governing board, invoices, ledgers, bank accounts, reconciliations, contracts, and any documents related to the expenditure of homeowners association dues" (N-PCL § 621(e-1)). Refusal is enforced by application to the supreme court under § 621(d). The corresponding condominium provision is narrower: "The manager or board of managers, as the case may be, shall keep detailed, accurate records, in chronological order, of the receipts and expenditures arising from the operation of the property. Such records and the vouchers authorizing the payments shall be available for examination by the unit owners at convenient hours of weekdays. A written report summarizing such receipts and expenditures shall be rendered by the board of managers to all unit owners at least once annually" (Real Property Law § 339-w).