Striking a Balance with Use Restriction Enforcement
When Niccolo Machiavelli posed his famous question in the 16th century he was considering leadership in the often-bloody struggles of Renaissance Italy. Anyone dealing with a homeowner’s unapproved chain-link fence or bright pink house knows that community association leadership is not as far removed from that distant past as we sometimes like to think. One of the toughest jobs for a board of directors is to enforce the use restrictions, architectural guidelines, and rules that help maintain the aesthetic appeal of a community association. Since it is impossible to please all people, this article looks at the legal requirements a board of directors must consider when dealing with owners who breach the terms of the governing documents.
Georgia law allows a community association to enforce restrictive covenants governing everything from exterior paint colors to leasing unless: (1) the use restriction is against public policy (think restrictions on political signs or discriminatory restrictions) or (2) the board’s enforcement against an owner is “arbitrary and capricious.” There are a handful of cases providing information on arbitrary and capricious actions by the Board, but they agree that a board of directors cannot enforce a restriction against an owner when it has failed to enforce the same restriction against other owners with similar violations in the past. Allowing that type of enforcement would be unfair to the owner being targeted. It is for this reason that directors are advised to enforce use restrictions evenly or risk losing the legal ability to enforce them at all.
On the other hand, boards that take too rigid an approach to enforcement run the risk of wasting association resources or, worse, being removed from power by a mob of angry homeowners. What then, is a board to do: attempt to be “loved” by never angering owners with enforcement actions and risk losing the right of enforcement or be overly “feared” by dealing strictly with any infraction at risk of ouster? Fortunately, Georgia law and governing documents give the board flexibility in enforcement. Most associations have different tools to deal with a violation: levying fines, the right of “self-help” and injunctive relief suits are the most common.
The balancing act requires a board of directors to determine which violations require more serious enforcement actions. In a community with a leasing cap and a waitlist fifteen residents long, an owner’s repeated leasing violation may require everything from fines through an injunctive relief lawsuit to get a court order stopping future leasing. On the other hand, an owner who fails to pick up dog waste once may only warrant a small fine or even a simple notice of violation letter with no further sanction unless the violation occurs again. Even the fines can be a means of striking a balance: a board is usually free to levy “reasonable” fines based on the violation. Exterior construction without approval may warrant a heftier, one-time fine while leaving a trashcan at the street after trash day may call for a small, per-violation fine.
While flexibility is allowed, the Board must remember that this does not give the association carte blanche to deal with every violation in drastically different ways. To avoid the arbitrary and capricious pitfall, similar situations must be dealt with in similar ways. For instance, if the board decides that a leasing violation warrants a lawsuit, it would need to be prepared to file suit in future situations with similar facts. Likewise, a court would probably not support a board’s decision to levy a ten dollar fine for dog waste against one owner while levying a twenty-five dollar fine against another owner with the same violation. In order to avoid inadvertently dealing with similar situations in different ways, the board of directors should consider working with its property manager and attorney to come up with an enforcement policy. It need not be overly detailed, but it could lay out some general notice procedures and basic fines for common violations. Following that policy can give the board substantial protection against an arbitrary and capricious enforcement defense.
Striking a balance between overly aggressive and too lenient use restriction enforcement will never be easy, but a board of directors that has a policy and remembers to use common sense in dealing with violations can certainly find success. Machiavelli concluded that it was best to be both feared and loved, but if a leader had to choose one over the other it was better to be feared. However, before embracing such a “Machiavellian concept,” a Board should also keep in mind that, at the end of the day, they will continue to live side by side with the same neighbors they take enforcement action against.