An Opinion By Val Lucier

Published July 16, 2011

Boards of directors for major corporations, such as IBM, GE and Microsoft, do not and cannot fine their shareholders.  But condo and HOA boards fine their members all the time. In addition, thanks to the Florida legislature, associations now can also place a lien and foreclose on your house if your unpaid fine exceeds $1,000, an amount you can reach at the blink of an eye once the attorney gets involved. This gives associations more power than is allocated to government entities and even the courts themselves. Condos and HOAs are not-for-profit corporations, but they are not official government entities.    

If you get a speeding ticket and don’t pay the fine, you may end up in jail, but the city can’t take away your house for not paying the fine.  Yet your association can take away your house for not paying an association fine, thanks to the legislative overreach.     

After the HOA Task Force convinced the Florida legislature of that fact in 2004, the law was changed to prevent HOA fines from being converted into assessments that could then be converted into liens. The legislature was made to realize there were other collection methods available as remedy to associations, so that provision was removed from the Florida Statutes. 

In 2010 the legislature revisited fines and re-instituted the provision. However, now it is no longer necessary to convert the fine into an assessment prior to filing a lien against a parcel. Apparently the legislature forgot what it had learned in 2004 and now thought it had streamlined the process by permitting the association to convert the unpaid fine directly into a lien on the property, again totally ignoring the fact that not-for-profit corporations are not government entities and cannot issue fines in the first place.

The Rhode Island Supreme Court ruled that membership fines by an association are unconstitutional regardless of what the association bylaws or the State Statutes say. Why? Because it is an unconstitutional delegation of judicial power by the legislature to associations.  By allowing an association to fine members, the legislature is delegating police powers to boards of directors -- private entities.  Those powers are not the legislature’s to give.

Civics 101:  To paraphrase Frank Short, a well-known Virginia attorney, when he said as a guest on the “On The Commons” radio show on November 4, 2006:  “We are a government of laws not of men. We have a constitutional government that operates under the separation of powers. Some powers belong to the Executive branch, some to the Legislative branch and others to the Judiciary branch of the government. None of the branches can act in a field where the power to act is assigned to another branch by the constitution. The power to punish resides with the Judiciary. The imposition of a fine is a governmental power. The power of the court to impose a fine for civil contempt does not however compel the offender to face the surrender of his property. Associations are claiming more power than is available to the court. If the Legislature is delegating power that is not theirs to delegate when drafting legislation giving associations the power to fine members, that is nothing less than Unconstitutional Delegation Of Judicial Power by the Legislature. These facts are the bedrock foundation of our individual constitutional rights. Improper delegation of these rights by the legislature to our peer volunteers puts all of us at peril.”

One of our founding fathers, James Madison, said it best in 1788 when he explained in Federalist Paper #51 “the reason for having separation of powers was to shield the people against tyranny.”  He envisioned the potential risk of too much power in the hands of government. Can you imagine what Madison would have said about quasi-governments like condos and HOAs in the hands of amateur volunteers no less!

The game “rock, paper, scissors” works because no one item can dominate.  Each has the power to check the other two and that’s the concept of separation of powers in a nutshell.

 The police powers granted in Florida Statures FS 617, FS 718 and FS 720 and other community living statutes like FS 719 and FS 723 by the Florida Legislature to Florida Associations Board of Directors are all unconstitutional because the legislature granted powers to associations that were not theirs to grant under the U.S. Constitution, the Florida Constitution and as confirmed by the Rhode Island Supreme Court in Foley v. Osborne.

Reference Case:

James Foley v. Osborne Court Condominium, ET AL.

C.A. No. 96-360

SUPERIOR COURT OF Rhode Island, NEWPORT

1999 R.I. Super. LEXIS 50

July 26, 1999, Filed

In this case the court found that the Rhode Island 1982 Act represented an unconstitutional delegation of judicial or police powers to the condo association, a private entity.

            It’s surprising that association power to levy fines has yet to come before the Florida Supreme Court.

 Converting fines into liens leading to possible foreclosure has no place in the Florida HOA Statutes FS 720 and in the other community living statutes for that matter. My firm hope is that the fine provision will be rewritten by the legislature in its 2012 legislative session to state: “Regardless of any provision to the contrary contained in the governing documents fines shall not be converted to assessments or liens.”