Why they are not allowed
The Condo Act does not allow condo boards to fine residents or owners for rule infractions.
Some believe fines are an effective deterrent that should be allowed. While this may be the case, this cautionary situation from the USA explains how fines can be misused and abused thus prohibited in Ontario.
In Florida a property with a permanent metal decoration above the garage was purchased. About a year later the owner received a letter from the association stating the decoration would have to be removed. A few months later a second letter was received this time threatening a fine for noncompliance. The owner responded with a letter asking for time to deal with the matter and had the ornament removed weeks later.
Months later the owner received a letter demanding payment of more than $12,000 based on rules stating a fine of up to $1,000 per day. A lien had also been filed on the home. The amount soon increased to $20,000.
That same association collected fines of more than $65,000 in 2014.
After the owner hired a lawyer, the association reduced the fine to $3,000 plus a few hundred dollars in legal costs.
This is a situation where one association was using fines as a means of raising revenues and the lien as a vehicle to force payment.
While fines are an effective deterrent in certain situations and filing a lien is reasonable when condo fees are not paid, this example shows why the Condo Act disallows such actions and has been supported by the courts.