North Dakota HOA fine rules

What this means for homeowners

• North Dakota has no homeowners association act and no statute governing HOA fines. Nothing in the North Dakota Century Code requires an association to give notice before levying a fine, sets a cure period, guarantees a hearing, or caps the amount of a fine. Whether a North Dakota homeowners association may fine at all, how much, and what steps it must take first are set by the recorded declaration, covenants, conditions and restrictions, bylaws and rules, together with the North Dakota Nonprofit Corporation Act, N.D. Cent. Code ch. 10-33, for an association incorporated under it, which supplies corporate mechanics rather than fine procedure.
• North Dakota does have one section written specifically for homeowners' associations, but it is a sale disclosure statute and creates no enforcement procedure. It defines "Homeowners' association" as "an organization making and enforcing rules and guidelines for a residential subdivision or planned community" (N.D. Cent. Code § 47-10-02.3(1)(c)), and requires that "By a mutually agreed upon date or within ten days of executing an agreement to sell or transfer a property subject to the rules and regulations of a homeowners' association or condominium project, the seller shall disclose in writing to a prospective buyer" a list of items that includes current assessments and unpaid amounts, approved special assessments, the bylaws, rules and declaration and "official minutes from the last two meetings," reserve and budget information, insurance documents, unsatisfied judgments and pending lawsuits, "Notice of any homeowners' association or condominium project alleged and uncured violations pertaining to the home or unit," transfer fees, "A statement of the remedies available to the homeowners' association or condominium project as a result of nonpayment," the assessment collection policy, leasing restrictions, amenities and contact information (§ 47-10-02.3(2)). The association's own duty under the section runs to the seller, not to an owner facing enforcement: "The homeowners' association or condominium project, within ten days after a request by a seller, or the seller's authorized representative, shall furnish the documents required under subsection 2," and may charge "a reasonable fee, which must be disclosed before the final acceptance of a purchase agreement" (§ 47-10-02.3(5)). If the documents are not provided, "the purchase contract is voidable by the buyer until the documents have been provided and for five days after receipt of the documents or until conveyance, whichever occurs first" (§ 47-10-02.3(6)). The section carries no notice-before-fine, cure-period, hearing or fine-cap requirement, and it gives a homeowner no standing to demand records outside a sale.
• The condominium statute contains no fine provision either. Chapter 47-04.1 runs sixteen sections and its enforcement provision is a duty and a lawsuit: "Each unit owner shall comply strictly with the bylaws and with the administrative rules and regulations adopted pursuant thereto, as either of the same may be lawfully amended from time to time, and with the covenants, conditions, and restrictions set forth in the declarations or in the deed to that owner's unit. Failure to comply with such provisions shall be grounds for an action to recover sums due for damages, injunctive relief or such other relief as a court of proper jurisdiction may provide by the administrative body or in a proper case, by an aggrieved unit owner" (N.D. Cent. Code § 47-04.1-08). What the chapter does instead is leave the machinery to the recorded documents. "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" (§ 47-04.1-04). The unit owners or the administrative body "shall provide by bylaws for the maintenance of common elements, limited common elements where applicable, assessment of expenses, payment of losses, division of profits, disposition of hazard insurance proceeds, and similar matters," and "All bylaws, rules, and regulations as adopted by the unit owners or administrative body of the project must be reduced to writing and made available to every owner of any interest in the project" (§ 47-04.1-07(1), (3)) — a disclosure duty with no deadline and no request procedure. The one place penalties are mentioned, both their existence and their size are left to the declaration and bylaws: a reasonable assessment for common expenses "plus any other charges thereon, such as interest, costs, and penalties, as such may be provided for in the declarations and bylaws, shall be and become a lien upon the condominium assessed when the administrative body causes such assessment to be recorded in the office of the recorder" (§ 47-04.1-11).
• The chapter's substantive protections for condominium owners are narrow and unrelated to fines. "Notwithstanding any provision in a covenant, declaration, bylaw, or other rule of a project, an owner or resident may not be prohibited from displaying a political yard sign on the owner's property within sixty days before any primary, general, or special election. A covenant, declaration, bylaw, or rule may include reasonable restrictions regarding the placement and manner of display of political signs" (N.D. Cent. Code § 47-04.1-14). Section 47-04.1-16 protects electric vehicle charging station installations, voids covenants and bylaws that prohibit or unreasonably restrict them, deems an application approved "If an application is not denied in writing within sixty days from the date of receipt of the application ... unless that delay is the result of a reasonable request for additional information," and provides that "An administrative body governing a condominium which willfully violates this section is liable for actual damages and shall pay a civil penalty to the applicant or other party in an amount not to exceed one thousand dollars" (§ 47-04.1-16(3), (8)) — a penalty running against the association, not a limit on fines against an owner. For records, an owner of an incorporated North Dakota association falls back on the Nonprofit Corporation Act: a corporation "shall keep at its principal executive office correct and complete copies of its articles and bylaws, accounting records, voting agreements, and minutes of meetings of members, board of directors, and committees having any of the authority of the board of directors for the last six years," and "A member or a director, or the agent or attorney of a member or a director, may inspect all records referred to in subsection 1 or 3 for any proper purpose at any reasonable time. A proper purpose is one reasonably related to the interest of the person as a member or director of the corporation" (N.D. Cent. Code § 10-33-80(1), (2)), with "A member or a director who is wrongfully denied access to or copies of records under this section may bring an action for injunctive relief, damages, and costs and reasonable attorney's fees" (§ 10-33-80(7)).