North Dakota HOA and Condominium Fines: No Statutory Cap, Court Enforcement Under N.D.C.C. 47-04.1-08

The starting point is that fining power in North Dakota is contractual, not statutory. Chapter 47-04.1, the Condominium Ownership of Real Property chapter, is the state's only association statute; North Dakota never enacted a common interest ownership act, and nothing in the Century Code sets a dollar ceiling, a per-day maximum, a cure period or a hearing requirement for an association fine. Section 47-04.1-04 requires the owner of a project to record a declaration of restrictions before conveying any condominium, and provides that those restrictions are enforceable equitable servitudes where reasonable and bind all owners. The word that does the work there is reasonable: a fine provision your association wants to enforce has to sit in a recorded declaration or in bylaws adopted under section 47-04.1-07, and a North Dakota district court can decline to enforce a servitude it finds unreasonable.

Section 47-04.1-08 is the enforcement engine, and it points at a courthouse rather than at a fine notice. It obliges each unit owner to comply strictly with the bylaws, with administrative rules adopted under them, and with the covenants, conditions and restrictions in the declaration or in the owner's deed, and it makes failure to comply grounds for an action to recover sums due for damages, injunctive relief, or such other relief as a court of proper jurisdiction may provide. Two parties can bring that action: the administrative body, and in a proper case an aggrieved unit owner. That second clause matters in practice, because it lets a neighbor sue over a violation the board has decided to ignore.

How the association makes a charge stick to the property is governed by section 47-04.1-11 rather than by any fine statute. A reasonable assessment for common expenses made by the administrative body in accordance with the recorded declaration and bylaws is a debt of the owner at the time it is made. The amount, plus other charges on it such as interest, costs and penalties where the declaration and bylaws provide for them, becomes a lien on the condominium only when the administrative body causes the assessment to be recorded with the recorder for the county where the unit sits. The recorded notice of assessment must state the amount of the assessment and other charges and the name of the record owner, and must be signed by an authorized representative of the administrative body or as the declaration and bylaws otherwise provide. When the owner pays, the administrative body must record a notice stating the satisfaction and release of the lien. Nothing in chapter 47-04.1 gives an association a power of sale, so collecting on that lien means a court proceeding.

The closest thing North Dakota has to a due-process rule for association discipline lives in the Nonprofit Corporations chapter, and it is narrower than owners usually assume. Section 10-33-62 provides that a member may not be expelled or suspended, and a membership may not be terminated or suspended, except under a procedure that is fair and reasonable and carried out in good faith, and it supplies a safe harbor: not less than fifteen days prior written notice of the expulsion, suspension or termination and the reasons for it, plus an opportunity to be heard orally or in writing not less than five days before the effective date, before a person authorized to decide that the action not take place. A challenge must be commenced within one year after the effective date. Read carefully, that section governs suspension or expulsion of membership, which reaches a suspension of common-area privileges, but it does not by its own terms reach a monetary fine. Section 10-33-60 supplies the other half: a corporation may levy dues, assessments or fees on members only when authority to do so is conferred by the articles or bylaws, and the articles or bylaws may fix the amount, authorize the directors to fix it, provide for enforcement or collection, and provide for cancellation of membership on reasonable notice for nonpayment. Sections 10-33-61 and 10-33-62(4) both confirm that resigning or being expelled does not wipe out dues, assessments or fees already owed.

An association that fines you and gets nowhere has to sue. 1-08 routes enforcement into North Dakota district court for damages, injunctive relief or other relief, and the same section lets an aggrieved unit owner bring that action when the board will not. 1-11, but it burdens the unit only once the association records a notice of assessment naming the record owner and stating the amount with the county recorder, and the association must record a satisfaction once you pay. If your association is a nonprofit corporation and it suspends or expels you rather than fining you, section 10-33-62 lets you challenge the action for up to one year after its effective date, including on the ground that notice was defective, and section 10-33-81 lets at least fifty members with voting rights or ten percent of them, whichever is less, or the attorney general, sue for equitable relief and expenses including reasonable attorney's fees when the corporation or an officer or director violates the chapter. 1-07 requires.