Rhode Island HOA fine rules

What this means for homeowners

• Rhode Island has no homeowners association act. For a development of separately owned lots governed by recorded covenants rather than by a condominium declaration, no Rhode Island 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, bylaws and rules, together with the Rhode Island Nonprofit Corporation Act, R.I. Gen. Laws ch. 7-6, for an association incorporated under it, which supplies corporate mechanics rather than fine procedure.
• Rhode Island's only common-interest-community statutes are its two condominium acts, and the fine rules live entirely on the condominium side. Under the current Condominium Law the association may "Impose charges for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws, and rules and regulations of the association as provided in § 34-36.1-3.20" (R.I. Gen. Laws § 34-36.1-3.02(a)(11)). Section 34-36.1-3.20 is unusual among state statutes in setting hard dollar caps: "An executive board may impose and assess fines against a unit owner as a method of enforcing the association's declaration, bylaws, and rules and regulations. Such fines may include, but are not limited to, daily fines for continued violative conduct in the future. Notice and the opportunity for a hearing must be provided to an alleged violator before a fine is imposed and assessed. All fines shall be a lien on the unit charged" (§ 34-36.1-3.20(a)); "Daily fines imposed and assessed pursuant to this section shall be no more than one hundred dollars ($100) per day for residential condominiums nor more than five hundred dollars ($500) per day for commercial condominiums" (§ 34-36.1-3.20(b)); "Fines other than daily fines imposed and assessed pursuant to this section shall be no more than five hundred dollars ($500) for residential condominiums and no more than one thousand dollars ($1,000) for commercial condominiums" (§ 34-36.1-3.20(c)); "Any condominium declaration, bylaw, rule or regulation which purports to establish a maximum fine or daily fine shall be invalid" (§ 34-36.1-3.20(d)); "Hearings conducted pursuant to this section shall be before the executive board or a person designated by the executive board" (§ 34-36.1-3.20(e)); and "A decision in a hearing held pursuant to this section must include costs in all cases and reasonable attorney's fees, if the prevailing party is represented by a member of the Rhode Island Bar. Such attorney's fees and costs shall also be a lien on the unit charged" (§ 34-36.1-3.20(f)). The statute fixes no cure period, no number of days for requesting or holding the hearing, and no required contents or delivery method for the notice.
• Whether a particular Rhode Island community is a "condominium" for these purposes turns on how it was created, not on whether the homes are attached. The Condominium Law defines a condominium as "real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those portions. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners" (R.I. Gen. Laws § 34-36.1-1.03(7)(i)). A development of detached houses created under a condominium declaration therefore falls inside ch. 34-36.1, while a development whose lots are owned outright and tied together only by covenants does not.
• Coverage of the condominium fine rules has a date line and an opt-in. "This chapter applies to all condominiums created within this state after July 1, 1982, except that any condominium created within this state prior to July 1, 1982, may voluntarily accept the provisions of this chapter in lieu of the provisions under which it was originally organized" (R.I. Gen. Laws § 34-36.1-1.02(a)(1)), and that acceptance must be in a writing executed by the association and by all unit owners and recorded in the land evidence records. Even without opting in, a list of sections — including "34-36.1-3.02(a)(1) — (6) and (11) — (17) (powers of unit owners' association)," "§ 34-36.1-3.20 (enforcement of declaration, bylaws and rules)," "34-36.1-3.16 (lien for assessments)" and "34-36.1-3.18 (association records)" — "apply to all condominiums created in this state before July 1, 1982; but those sections apply only with respect to events and circumstances occurring after July 1, 1982 and do not invalidate existing provisions of the declaration, bylaws, plats, or plans of those condominiums" (§ 34-36.1-1.02(a)(2)). Those rights cannot be signed away: "Except as expressly provided in this chapter, provisions of this chapter may not be varied by agreement, and rights conferred by this chapter may not be waived" (§ 34-36.1-1.04). The older Condominium Ownership act, ch. 34-36, contains no fine provision of its own; its enforcement section provides only that "failure to comply shall be ground for an action to recover sums due for damages or injunctive relief or both, maintainable by the manager or management committee on behalf of the unit owners, or in a proper case, by an aggrieved unit owner" (§ 34-36-8), and its records provision makes the receipts-and-expenditures records "available for examination by the unit owners at convenient hours of weekdays" (§ 34-36-17). Under ch. 34-36.1 the records right is broader: "The association shall keep financial records sufficiently detailed to enable the association to comply with § 34-36.1-4.09. All financial and other records shall be made reasonably available for examination within thirty (30) days of a request by any unit owner and his or her authorized agent" (§ 34-36.1-3.18).