Some states have statutes that require that Associations provide a notice and opportunity to be heard to a resident before the Association can fine them for a violation of the governing documents. Even though Wisconsin does not have such a statute, providing residents a notice of the alleged violation and opportunity to give their side of the story is an important component of providing due process—which will help make your fines ultimately enforceable.
Facts. In a 2018 case, residents cut down two large, mature trees on their lot without obtaining prior written approval from the Board, in violation of the Association’s governing documents. When it came to the Board’s attention that the trees were downed, an emergency Board meeting was called. The Board did not invite the residents to attend the meeting, and at that meeting, the Board voted to give the residents notice that they will be required to replace the trees within 30 days, and if they fail to do so, the Board would fine them $100 per day until the trees were replaced. Following the meeting, the Board gave notice of its decision to the residents via letter. There was much verbal and written communication between the residents that followed–the residents (of course) had their reasons for removing the trees which they communicated to the Board, and refused, at first, to replace the trees–and the Board responded that fines were accruing daily per their previous notice.
When the residents continued to refuse compliance, the Association filed suit, which resulted in five long years of litigation. The residents’ argument that ultimately carried the day with the court of appeals was that the Association failed to provide them an “opportunity to be heard” before fines were issued. The Association argued that there was much communication between the parties, so the residents did have an opportunity to be heard; however, the court disagreed that it was enough.
Court Rulings. The court determined that simple communication between the parties about the alleged violation and levied fines is not enough to show an opportunity to be heard. Instead, the court indicated that had the Board invited the residents to a hearing–giving them a meaningful opportunity to state their objections and be heard by the Board–that would have satisfied the due process requirements. However, because the Association never once invited the residents to attend a Board meeting and talk about it, the Association did not have the right to levy fines. As such, the Association recovered $0 in fines, and was accordingly unable to recover its attorneys’ fees in pursuit of the fines, which were substantial after litigating for five years!
Lesson. Whether or not there is a statute that demands this, it is a good idea for your Association to give residents (1) notice of a violation and intent to fine; and (2) at least invite them to a Board meeting (or better yet, have a Grievance Procedure in place that you follow) so the resident has an opportunity to have his side of the story heard. Doing so may keep you out of court—or if you end up in court anyway, the Association will have a much better chance of winning.
If you have any questions, please feel free to contact Husch Blackwell LLP Condominium and HOA Law Team.