Condominiums and cooperatives are, in the words of the New York Court of Appeals, “quasi-government[s]…little democratic sub societ[ies] of necessity.” Levandusky v. One Fifth Ave. Apartment, 75 N.Y.2d 530, 536 (1990). Just as governments need to deter misconduct and punish rule-breaking, co-ops and condos rely on fines and late fees to keep their houses in order.
Fines and late fees may be important—even essential—tools of co-op and condo self-governance, but there are limits which must be respected. This article explores three potential limits on the use of fines and late fees by co-op and condo boards. First, the authorization to issue fines and late fees should be expressly grounded in the co-op or condominium governing documents. Second, the rule that the board is seeking to enforce must itself be a valid and enforceable rule. Third, the fines or late fees issued by the board must not be unconscionably large or otherwise against public policy.