#28-13, Kim v._Montrose Woods Condominium  Association  (July 25, 2014) (Panel: Kernan, Fishbein and Winegar).

The unit owner filed a complaint alleging that his Condominium Association (CA) violated the rules of the Association by arbitrarily and unreasonably imposing on him fines in the amount of $3,950, computed at the rate of $50/day for a total of 79 days, because he failed to repair his deck properly.

In its decision, the panel considered the following facts:

On February 2, 2012, the CA advised the unit owner that his deck was in need of repair and such repairs should be completed within 30 days. He failed to reply to this notice, and on March 20, 2012, the CA sent a notice to the unit owner to inform him that it would hold a violation hearing on April 5, 2012. The notice did not state the proposed sanctions that could be imposed on the unit owner, as required by the CA Policies and Procedures Handbook. [NOTE: Section 11-113 of the Condominium Act also requires that the notice of a violation hearing include a statement of the proposed penalty.]

On March 23, 2012, the unit owner contacted the CA’s property manager, informing him that he intended to repair his deck in May 2012. Nonetheless, the CA proceeded to hold its scheduled violation hearing on April 5, 2012, even though the unit owner was absent. The unit owner testified before the panel that he assumed he did not need to attend a hearing because he had promised to fix the deck.  There were no Board meeting minutes regarding the board’s consideration of the unit owner’s violation although such minutes were also required by the CA’s Policies and Procedures.

On April 20, 2012, the CA informed the unit owner that he was in violation of the Declaration of Covenants for failing to keep his deck in good repair and required him to provide copies of a contract and a County permit to replace his deck within 10 days. The unit owner claimed he did not receive that letter.

On May 14, 2012, the unit owner signed a contract to replace his deck and the work was completed soon after at the cost of $1,300. On June 12, 2012, the CA sent a letter to the unit owner informing him that a County inspector had advised the Association that the County had not issued a permit for the work. The CA then demanded that the unit owner obtain the permit, perform the necessary modifications demanded by the County regulations and obtain the County’s final approval within 15 days. This letter also stated that the CA had imposed a fine of $50 per day beginning May 1, 2012.  This was the first notice the unit owner had that fines had been imposed.

On July 2, 2013 the unit owner forwarded to the CA a construction plan for his deck for approval, which met the County’s regulations.   Three days later the property manager sent the request to the Board and informed it that the County would not issue a permit without the CA approval of the plan. On July 23, 2012, the CA notified the unit owner that he had been fined $3,950 through July 18, 2012, because the deck was still not properly repaired.

On July 26, 2012, the unit owner disputed the fine because he had never received the April 20 violation notice and was unfamiliar with the permit process. On August 13, 2012, the CA approved the unit owner’s deck application and in September, the County issued the permit for the deck which was constructed within the following week. In reply to the owner’s request to remove the fine, the CA offered a fine reduction to $1,000.

The panel concluded that fines should be revoked for two reasons: first, the CA did not properly follow its own Policies and Procedures Handbook and the State Code by:

1. failing to provide the unit owner proper notice of the potential fines that could be imposed on him. The unit owner was not aware of the fines until he received the June letter and that letter did not specify the dates the fines began to accrue nor did it indicate the current sum of the fines.
2. failing to record minutes of the meeting regarding its consideration of the unit owner’s violation.
3. failing to comply with Section 10B-9(d) of the Montgomery County Code by not specifying in its notice to the unit owner dated April 20, 2012 that he has the right to dispute the decision by filing a complaint with the CCOC.

Second, the panel concluded that the fines imposed on the unit owner were excessive and unreasonable given the evidence that at all times he was acting in good faith in attempting to repair/rebuild his deck once he became fully aware of his CA’s requirements. The panel held that the purpose of fines is to encourage voluntary compliance with the rules, and that once the unit owner began in good faith to comply, the fines were unnecessary.

The panel ordered the CA to remove all the fines imposed upon the unit owner and reimburse him his $50 filing fee within 45 days of the decision date. The panel also advised the CA to discuss this decision in its next meeting and maintain accurate and complete minutes of all its Board meetings.