Vermont HOA fine rules

The association "may impose charges for late payment of assessments and, after notice and a hearing, may impose reasonable fines for violations of the declaration, bylaws, and rules of the association" (27A V.S.A. § 3-102(a)(11)). The Act does not state what that notice must contain and prescribes no delivery method specific to fines. The general delivery rule is § 3-121: "An association shall deliver any notice required to be given by the association under this title to any mailing or electronic mail address a unit owner designates. Otherwise, the association may deliver notices by: (1) hand delivery to each unit owner; (2) hand delivery, U.S. mail postage paid, or commercially reasonable delivery service to the mailing address of each unit; (3) electronic means, if the unit owner has given the association an electronic address; or (4) any other method reasonably calculated to provide notice to the unit owner" (§ 3-121(a)), and "The ineffectiveness of a good faith effort to deliver notice by an authorized means does not invalidate action taken at or without a meeting" (§ 3-121(b)). Where the violation is by a tenant of a unit owner, the association may, "after giving notice to the tenant and the unit owner and an opportunity to be heard, levy reasonable fines against the tenant for the violation" (§ 3-102(d)(2)) — the tenant provision uses "an opportunity to be heard" where the owner provision in § 3-102(a)(11) says "a hearing." A separate notice-and-hearing requirement attaches to a special assessment for damage: "If damage to a unit or other part of the common interest community, or if any other common expense is caused by the willful misconduct or gross negligence of any unit owner, guest, or invitee of a unit owner, the association may, after notice and hearing, assess that expense exclusively against that owner's unit, even if the association maintains insurance with respect to that damage or common expense" (§ 3-115(e)).

The Act sets no cure period before a fine. The only fixed cure period in § 3-102 concerns the association's exercise of a landlord's rights against a tenant, not fines: "The rights referred to in subdivision (d)(3) of this section may be exercised only if the tenant or unit owner fails to cure the violation within 10 days after the association notifies the tenant and unit owner of that violation" (27A V.S.A. § 3-102(e)); subdivision (d)(3) is the power to "enforce any other rights against the tenant for the violation that the unit owner as landlord could lawfully have exercised under the lease or that the association could lawfully have exercised directly against the unit owner, or both." That 10-day period does not attach to the fine power in § 3-102(a)(11) or to the tenant fine power in § 3-102(d)(2).

27A V.S.A. § 3-102(a)(11) — the association "may impose charges for late payment of assessments and, after notice and a hearing, may impose reasonable fines for violations of the declaration, bylaws, and rules of the association." The Act sets no number of days within which an owner must ask to be heard, no deadline by which the association must hold the hearing, no procedure for it and no rule on who presides. The right cannot be signed away: "Except as expressly provided in this title, the effect of the provisions of this title may not be varied by agreement, and rights conferred by this title may not be waived" (§ 1-104). Two further limits on enforcement sit alongside the hearing right. First, the board has discretion not to act at all: "The executive board may determine whether to take enforcement action by exercising the association's power to impose sanctions or commencing an action for a violation of the declaration, bylaws, and rules, including whether to compromise any claim for unpaid assessments or other claim made by or against it. The executive board does not have a duty to take enforcement action if it determines that, under the facts and circumstances presented: (1) the association's legal position does not justify taking any or further enforcement action; (2) the covenant, restriction, or rule being enforced is or is likely to be construed as inconsistent with law; (3) although a violation may exist or may have occurred, it is not so material as to be objectionable to a reasonable person or to justify expending the association's resources; or (4) it is not in the association's best interests to pursue an enforcement action" (§ 3-102(g)); and a decision not to pursue enforcement in one case "does not prevent the executive board from taking enforcement action under another set of circumstances, but the executive board may not be arbitrary or capricious in taking enforcement action" (§ 3-102(h)). Second, the rule being enforced is itself constrained: before adopting, amending or repealing a rule the board must give all unit owners notice of "its intention to adopt, amend, or repeal a rule and provide the text of the rule or the proposed change" and of "a date on which the executive board will act on the proposed rule or amendment after considering comments from unit owners" (§ 3-120(a)), must notify owners and provide a copy after acting (§ 3-120(b)), and "Every rule must be reasonable" (§ 3-120(h)).

Vermont sets no dollar cap on an association fine. The only statutory limit on amount is that fines be reasonable — the association "may impose reasonable fines for violations of the declaration, bylaws, and rules of the association" (27A V.S.A. § 3-102(a)(11)). Fines are secured: "The association has a statutory lien on a unit for any assessment attributable to that unit or fines imposed against its unit owner. Unless the declaration otherwise provides, reasonable attorney's fees and costs, other fees, charges, late charges, fines, and interest charged pursuant to subdivisions 3-102(a)(10), (11), and (12) of this title, and any other sums due to the association under the declaration, this title, or as a result of an administrative, arbitration, mediation, or judicial decision, are enforceable in the same manner as unpaid assessments under this section" (§ 3-116(a)). Where an owner is behind, payments are applied to fines last: "Unless the parties otherwise agree, the association shall apply any sums paid by unit owners that are delinquent in paying assessments in the following order: (1) unpaid assessments; (2) late charges; (3) reasonable attorney's fees and costs and other reasonable collection charges; and (4) all other unpaid fees, charges, fines, penalties, interest, and late charges" (§ 3-116(n)). The Act also limits collection by suspension: the association "may suspend any right or privilege of a unit owner that fails to pay an assessment, but may not: (A) except as otherwise provided in subsection 3-116(q) of this title, deny a unit owner or other occupant access to the owner's unit; (B) suspend a unit owner's right to vote; (C) prevent a unit owner from seeking election as a director or officer of the association; or (D) withhold services provided to a unit or a unit owner by the association if the effect of withholding the service would be to endanger the health, safety, or property of any person" (§ 3-102(a)(18)).

"Subject to subsections (c) and (d) of this section, all records retained by an association must be available for examination and copying by a unit owner or the owner's authorized agent: (1) during reasonable business hours or at a mutually convenient time and location; and (2) upon five days' notice in a record reasonably identifying the specific records of the association requested" (27A V.S.A. § 3-118(b)). Section 3-118(a) lists eleven categories the association must retain, including "records of executive board or committee actions to approve or deny any requests for design or architectural approval from unit owners" and "ballots, proxies, and other records related to voting by unit owners for one year after the election, action, or vote to which they relate." Records "may be withheld from inspection and copying to the extent that they concern" personnel, salary and medical records relating to specific individuals; commercial transactions currently being negotiated; "existing or potential litigation or mediation, arbitration, or administrative proceedings"; "existing or potential matters involving federal, State, or local administrative or other formal proceedings before a governmental tribunal for enforcement of the declaration, bylaws, or rules"; attorney-client or work-product communications; information whose disclosure would violate law other than this title; executive session records; or "individual unit files other than those of the requesting owner" (§ 3-118(c)). The association "may charge a reasonable fee for providing copies of any records under this section and for supervising the unit owner's inspection" (§ 3-118(d)), "is not obligated to compile or synthesize information" (§ 3-118(f)), and information provided "may not be used for commercial purposes" (§ 3-118(g)).