This question of HOA fines, in 2 cases, was brought to my attention in my early years by Shu Bartholomew. It is a prime example of how constitutional issues can perk down and affect members in HOA-Land. It is important to understand that they apply to just 2 states, RI and VA. Why not in other states? Because legal doctrine holds that all bills are deemed constitutional unless challenged in court. If people do not raise these issues in court, like I did in Arizona in 2013, you can see HOAs fining away in violation of the laws of the land.
A 1982 VA supreme court in Gillman (292 S.E. 378) overturned imposed fines and a lien, holding,
“We find no language in the Condominium Act which authorizes the executive or governing body of a condominium to levy fines, impose penalties, or exact forfeitures.”
“The imposition of a fine is a governmental power. The sovereign cannot be preempted of this power, and the power cannot be delegated or exercised other than in accordance with the provisions of the Constitutions of the United States and of Virginia. Neither can a fine be imposed disguised as an assessment.”
NOTE: Current VA POA statutes speak only of “charges” and liens for non-compliance, nothing about fines. No violation of fundamental rights.
In Foley (RI, 1999), the question of the constitutionality of HOA fines was answered after 4 decisions. The issue involved whether the Condominium Act of 1982 violated the RI Constitution of “an unconstitutional delegation of power to a private entity.” The RI Supreme Court remanded to the superior court, outlined below, to decide the constitutionality question.
The key factor involved the enforcement of fines by means of foreclosure. Only recently have the courts and legislatures looked at the validity and fairness of the HOA foreclosure process. The owner’s equity is wiped out and raises the question of a cruel and unusual punishment in violation of the 8th Amendment. The supreme court and remanded trial court decisions are presented.
Foley v. Osborne, 724 A.2d 436 (R.I. 1999)
2. Improper Delegation Claim
The plaintiff argued on appeal that the actions taken by the committee pursuant to provisions in the 1982 act were illegal because they stemmed from an improper delegation of article 10 judicial power to a private entity. R. I. Const., art. 10. We are of the opinion that plaintiff properly presented his claim that there was an unconstitutional delegation of power to a private entity.
In his opening statement, plaintiff argued at length — again without objection — that the 1982 act allowed an unconstitutional delegation of police power to the committee, a private entity. . . . . The trial justice, however, subsequently issued a bench decision and judgment that failed to rule on plaintiffs argument that the 1982 act unconstitutionally delegated judicial power.
Consequently, we remand this case to the Superior Court with our instruction that the trial justice consider and rule on whether in this case the 1982 act represents an unconstitutional delegation of judicial or police power to the condominium association, a private entity.
If the trial justice finds that the delegation is unconstitutional, then within the time permitted for appeals, the defendants may seek appellate review of the trial justice’s ruling; alternatively, as a consequence of the trial justice’s ruling, the defendants may bring “an action to recover sums due for damages or injunctive relief or both” in accordance with the condominium association’s bylaws.
If the delegation is found to be constitutional, the trial justice must then find whether any conflicts between the provisions of the 1982 act significantly modify the relation between an owner and an association where, as here, the bylaws provided for a judicial procedure prior to foreclosure.
If the trial justice finds no conflict and affirms the previous judgment, the plaintiff may seek review of the ruling. If the trial justice finds such a conflict, the defendants may appeal pursuant to the rules of appellate procedure.
Foley v Osborne, 1999 R.I. Super. LEXIS 50 (Newport Superior Ct on remand)
[Decision on remand from RI Supreme Court (724 A.2d 436)]
The Superior court held the following.
Although other statutes permit debt collection without court intervention, none authorizes private entities to impose fines. It is the authority to impose fines and to enforce them that distinguishes the 1982 Act from other legislation. Finally, the act empowers the association with the ability to enforce its orders by depriving a violator of his property by foreclosure. In this capacity, the association acts as a tribunal exercising judicial power.
For the foregoing reasons, the Court finds that the 1982 Act represents an unconstitutional delegation of judicial or police power to the condominium association, a private entity.
HOA Constitutional Government 