Can Your Condo Board Fine You?by Leona Zoey Writer
You were likely thrilled to get your new condo. However, after moving in, getting to know your neighbors, and living in your new place for a few months, you’ve received a housewarming gift you weren’t expecting: a fine from your condo board. You may be wondering, can your condo board really fine you? And, if so, under what circumstances can you be fined?
The answer under NY law is that condo boards can sue condo unit owners, and they can do so for virtually any good-faith, non-discriminatory reason.
The Condominium Act
Section 339-j of the NY Condominium Act (“Act”) grants condo boards the right to impose fines on unit owners who violate the board’s rules. Condo boards can also seek damages or injunctive relief in some cases.
When a court is reviewing the imposition of a fine by a condo board upon a unit owner, it looks first to whether the board was authorized to adopt the rule at issue. If the rule was proper, the court then considers whether the amount of the fine imposed was reasonable. If the fine was reasonable and was imposed for the violation of a valid condo board rule, then it will likely stand.
One example in which a condo board has been found justified in assessing a fine under NY law was in charging unit owners for the cost of retaining professional landscapers, and then fining the owners an additional sum when they refused to pay for the landscaping. If a condo board had the authority under its bylaws to hire landscapers, and to charge unit owners a fee for the cost of the landscapers, then a reasonable fine against unit owners is appropriate when they refuse to pay that fee.
Courts have found that both a condo board’s hiring of landscapers and the board’s passing of the fee for this landscaping onto the unit owners were proper exercises of the board’s authority. The fines for unit owners’ refusal to pay for the landscaping have also been found to be perfectly reasonable. It is also worth noting that all of this conduct by the condo board would be protected from review by the court under the business judgment rule.
There are some limitations on a condo board’s power to impose fines, though. Courts in New York have held that condo boards have the right to assess administrative fees or nominal fines for rule-breaking by residents, but they may not impose confiscatory penalties. In other words, condo boards can’t assess huge, unreasonable fines that practically amount to the taking of the unit owner’s property. One example of such a confiscatory fine that was shot down by the court was a $500 per day fine against unit owners who engaged in prohibited subletting. Although the court found that the condo board had the right have the rule against subletting, it rejected the $500 per day fine as excessive.
Although condo boards have exceedingly wide discretion in assessing fines against unit owners, there are some important limitations under NY law. First, the condo board must have the authority to adopt any rules or regulations at issue. Second, any fine imposed on a unit owner must be reasonable. If both of these elements are satisfied, then a condo board is likely justified in its actions, but if either of these elements is missing, then the unit owner may be able defeat the fine. You should contact a real estate attorney in your area if you feel that you’ve been wrongly fined by your condo board.
Created on Mar 9th 2018 14:18. Viewed 575 times.