Every organization has the right to enforce its rules and expect ethical and honorable conduct from its members. Most organizations have discipline problems from time to time. A discipline problem may be something as simple as a member misbehaving at a meeting or an officer overstepping the boundaries of his or her office. If the problem is not corrected when it arises, it can escalate into something more serious
An association has several ways to discipline its members. The fairness and effectiveness of each depends on the nature and context of the misbehavior, the enforcement tools available under the governing documents and the manner in which they are used by the association's board of directors.
Actions Contrary to the Governing Documents
An owner installs a large deck without obtaining or applying for Association approval; a resident's pet is permitted off leash; so much furniture is stored in the garage that vehicles can't fit: these are all common examples of CC&R violations. What are the remedies? How are they implemented?
Most modern CC&Rs permit a board of directors to impose fines, suspend political privileges, limit use of common area amenities and perhaps levy a reimbursement assessments for costs incurred in remedying a CC&R violation.
What is Due Process?
Before implementing these disciplinary actions, the board must, under California Civil Code §1363, first provide the owner with an opportunity to be heard at a meeting noticed at least 10 days prior (and notice of adverse action taken within 15 days after). The applicable notice must be delivered personally or via first class mail and set forth at a minimum the date, time and place of the meeting, the nature of the violation and a statement that the member may attend and address the board at the meeting. The notice and process must - in the case of a nonprofit mutual benefit incorporated in California - be done in good faith and in a fair and reasonable manner.
For shorthand we often refer to these principles as providing a member procedural due process (fair notice of the time and place of the hearing and the subjects upon which discipline might be based) and substantive due process (that the provisions allegedly violated and the penalty imposed bear a reasonable relationship to the use of land and the goal of ensuring compliance with the governing documents and conform to written guidelines like the schedule of monetary penalties). It is an interesting question but far beyond the scope of this article as to whether the due process required to be given by an association is the same as what must be afforded someone who is the subject of state action under the federal or state constitution. Surprisingly, there is no published case (one that can be cited to a Judge) that applies due process principles to imposition of fines or discipline. However, one unpublished decision decided in 2005 sheds light on what is required.
In Aliusi v Fort Washington Golf Club, a club member sued to set aside a decision of the board of directors permanently expelling him from the club. The notice of hearing accused him of using profane language to women members of the club and prior offenses that prompted a temporary suspension with the possibility of permanent expulsion. At the hearing, the member demanded to know the names of those who complained but the board refused to provide that information (the witnesses may have been intimidated); he denied being vulgar but did admit telling his wife that the ladies were a bunch of old hags and that they should shove their requested apology up their @#%.
The board met privately and voted to expel him from the club. The decision was based not just on the recent incident of profanity but also on a history of incidents that included Aliusi's failure to follow club parking, golf course rules and instructions from the club professional and that fact that his father was an alleged felon.
Aliusi challenged his expulsion and the court agreed it was wrongful because he had been denied due process. Specifically, the court said the board should have given Aliusi an opportunity to cross-examine his accusers and notice of the charges against him.
Applying Aliusi: revealing the names of the complainants?
Must a board reveal the names of those who have registered complaints against a neighbor? In my opinion, the answer is not always yes but instead depends on these factors:
The other problem in Aliusi was that directors considered written evidence (complaint letters, rules) that had not been discussed with or provided to the member being targeted with the punishment. Generally, the failure to provide a member with the documents and records upon which a penalty is based will cast doubt on the fairness of that penalty. These materials might include photos, diagrams, complaint emails and letters (perhaps redacted to protect the author's name), bids (especially when the board plans to impose a reimbursement assessment), communications from government agencies, vendors or others. In rare cases, it might be appropriate or desirable to share communications or memos from counsel although obviously this should not be done without conferring first with counsel.
Basis for alleged violation and punishment: Finally, the concept of due process also requires a board to identify for an owner the alleged provisions of the governing documents claimed to be breached and the provisions giving the board the power to impose discipline.
The hearing notice must specify the nature of the violation and the date, time and place of the hearing, and that the member may attend and address the board. Additional information that should be provided will vary depending on the parties' history, the nature of the violation, member complaints, precedent, the types of potential penalties and other considerations. Typically, the notice will state the nature of the violation and the governing document provisions violated. If costs are to be incurred to cure a violation (for example, to repair a fence damaged by a member's car), bids to do the work should be included. If there are photos or other records that can assist the owner in their defense, these should be mentioned, provided or made available.
Based on all of this, we can say that, beside insuring a just administration of the CC&Rs, the reason for due process is to give one who is the target of a hearing a fair chance to defend him/herself. Giving the owner this opportunity helps reveal the real and relevant facts and thus also aids the board's decision-making process. Further, an owner who feels they were given a fair shake is much more likely to comply with the board's disciplinary decision and the governing documents that led to the hearing and that, after all, is the whole point.