Owner Liable for Tenant’s Violation of CC&Rs

Question: We leased our Gilbert home last summer while we were in Europe. One week after we moved back into our home, we got a notice from the HOA of a $150 fine against us because our tenant had been speeding in the community. We contacted the HOA to determine why the tenant was not being fined, and how the fine was calculated. The HOA said that the HOA only had the authority to fine us as the owner for our tenant’s speeding violations. Although the HOA admitted that there was no published schedule of fines, the HOA said that a $150 fine was appropriate because the guard gate had notified the tenant several times not to speed in the community. How could we be fined when we didn’t even know of the tenant’s speeding problem, and there was no published schedule of fines?

Answer: First, under the CC&Rs the HOA has no authority to fine the tenant, only the homeowner who agreed to the CC&Rs when the home was purchased. If the homeowner pays the fine for a violation of the CC&Rs by the tenant, the homeowner under the lease may be entitled to reimbursement from the tenant. Second, the HOA can only enforce “reasonable” fines, and reasonable fines require a published schedule of fines, e.g., $75 fine for the first parking violation of a CC&R that prohibits parking in the street overnight, $150 fine for the second parking violation, etc. Therefore, if there was no published schedule of fines, you should have no obligation to pay the $150 fine for the tenant’s speeding.

Note: A.R.S. §33-1803(B) requires that HOA fines, and also late charges for HOA dues, be “reasonable.” The Arizona Court of Appeals has ruled that “reasonable” requires a published schedule for both fines and for late charges for HOA dues.