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.

Whether Governing Documents Permit Fines or Late Fees