FINES AND SUSPENSION OF USE RIGHTS

POWER AND STATUTORY PROVISIONS AND

RULES FOR IMPOSITION OF SAME

A. SOURCE OF POWER TO FINE AND SUSPEND:

The power to fine and suspend rights is found as follows:

1. STATUTORY PROVISIONS

Subsection 720.305(2), Florida Statutes provides in part as follows:

(2) If the governing documents so provide, an association may suspend, for a reasonable period of time, the rights of a member or a member’s tenants, guests, or invitees or both, to use common areas and facilities and may levy reasonable fines, not to exceed $100 per violation, against any member or any tenant, guest, or invitee. A fine may be levied on the basis of each day of a continuing violation, with a single notice and opportunity for hearing, except that no such fine shall exceed $1,000.00 in the aggregate unless otherwise provided in the governing documents.

(a) A fine or suspension may not be imposed without notice of at least 14 days to the person sought to be fined and suspended and an opportunity for a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother or sister of an officer, director, or employee. If the committee, by majority vote, does not approve a proposed fine or suspension, it may not be imposed.

(b) The requirements of this subsection do not apply to the imposition of suspensions or fines upon any member because of the failure of the member to pay assessments or other charges when due if such action is authorized by the governing documents.

(c) Suspension of common-area-use rights shall not impair the right of an owner or tenant of a parcel to have vehicular and pedestrian ingress to and egress from the parcel, including, but not limited to, the right to park.

2. DOCUMENT POWER

a. POWER TO FINE

On October 23, 2001, the Declaration of Covenants, Restrictions and Easements, Hammock Beach Estates was amended to permit the imposition of fines against any Owner and his family, guests, invitees, tenants, or employees (hereinafter “Owner”) for the violation of the Declaration of Covenants, Restrictions and Easements, Hammock Beach Estates, any supplements or amendments thereof, the Articles of Incorporation and Bylaws of the Association and any and all Rules and Regulations adopted pursuant to any of those documents (hereinafter “Restrictions”). This amendment states as follows:

10. Enforcement by Means of Fines

In addition to all other remedies, a fine or fines may be imposed upon an Owner for failure of the Owner, his family, guests, invitees, tenants, or employees (hereinafter “Owner”) to comply with any covenant, restriction or provision contained in any of the Hammock Beach Estates governing documents or any rule or regulation promulgated by the Board of Directors (hereinafter “violation”), provided the limits on the amounts of fines and due process procedures required by Florida Statute 720.305, as amended from time to time, are adhered to.

Fines imposed hereunder shall be paid not later than thirty (30) days after the decision of the Fining Committee is mailed to the Owner. All such fines shall be treated as an individual assessment secured by a lien and otherwise subject to the provisions of Article V of this Declaration.

b. POWER TO SUSPEND USE RIGHTS

On October 23, 2001, the Declaration of Covenants, Restrictions and Easements, Hammock Beach Estates also was amended to permit the suspension of use rights against any Owner and his family, guests, invitees, tenants or employees (hereinafter “Owner”) for the violation of the Declaration of Covenants, Restrictions and Easements, Hammock Beach Estates, any supplements or amendments thereof, the Articles of Incorporation and Bylaws of the Association and any and all Rules and Regulations adopted pursuant to any of those documents (hereinafter “Restrictions”). This amendment states as follows:

11. Enforcement by Means of Suspension.

In addition to all other remedies, the Association may suspend the rights of an Owner or an Owner’s family, guests, invitees, tenants, or employees, or both (hereinafter “Owner”), as follows:

1. Suspension of Use Rights: The Association may suspend, for a reasonable period of time, the rights of an Owner to use common areas and facilities and/or to receive services, for failure of the Owner to comply with any covenant, restriction or provision contained in any of the Hammock Beach Estates governing documents or any rule or regulation promulgated by the Board of Directors, subject to the procedures required by Florida Statute 720.305, as amended from time to time; provided that the procedures set forth in; that law do not apply to the imposition of any such suspensions upon any Owner because of the failure of the Owner to pay assessments or other charges when due; and further, provided that any such suspension shall not impair the right of an owner or tenant of a parcel to have vehicular access and pedestrian ingress to and egress from the parcel, including but not limited to, the right to park.

2. Suspension of Voting Rights: The Association may suspend the voting rights of a member for the nonpayment of regular annual assessments that are delinquent in excess of ninety (90) days or as otherwise permitted by law.

B. APPOINTMENT OF “FINING COMMITTEE”

Except for the non-payment of assessments and other charges as discussed below, pursuant to Subsection 720.305(2), the Board of Directors shall appoint a committee to be known as the “Fining Committee”. This committee shall conduct hearings to determine if fines and/or suspensions should be imposed for violations of the Restrictions.

The Fining Committee shall be composed of at least three members of the Association who are not officers, directors, or employees of the Association, or the spouse, parent, child, brother or sister of an officer, director, or employee of the Association. For continuity purposes, and to the extent possible, the Board shall appoint committee members for staggered two-year terms. However, all committee members shall serve at the pleasure of the Board of Directors and may be removed with or without cause by the Board at any time.

The operation of the Fining Committee shall be in compliance with the rules provided below.

C. RULES FOR THE IMPOSITION OF SUSPENSIONS AND FINES BY FINING COMMITTEE

Except for the non-payment of assessments and other charges as discussed below, the rules, which should be followed for the imposition of suspensions and fines if possible, are:

1. ACTIONS BY THE BOARD OF DIRECTORS

a. The Board shall designate one of its members to be Liaison Officer for C&R Violations. Complaints about alleged violations shall be directed, first, to said Liaison Officer. The Officer shall encourage the complaining party or parties to contact the alleged violator and seek to reach an amicable solution privately. If that effort fails, the Officer will then urge the parties to meet with the Officer and seek to arbitrate the matter. If that effort fails, then the Officer, if he/she believes there is indeed a violation, shall notify the alleged violator of the violation and provide a reasonable opportunity to cure the same. If that effort fails, then the Officer shall proceed to present the matter to the Board.

b. To the extent possible, no suspensions or fines should be imposed until after the Owner violating the Restrictions has been notified in writing of the violation and given a reasonable opportunity to cure the same. However, failure to comply with this procedure shall in no way affect any suspensions or fines imposed hereunder.

c. As to each possible suspension or fining event the Board shall gather, at a minimum, the following information:

i. The name of the owner/violator;

ii. The address and legal description of the infraction location.

iii. A brief description of the infraction, along with the citation of the section of the appropriate document that has been violated.

iv. Any other information deemed important by the Board, such as photographs.

d. If the alleged violator is involved in multiple infractions, then the Board may consolidate all information into one report.

e. At a duly constituted Board meeting the Board shall review the data outlined above.

f. If, at the conclusion of that review the Board believes that the infraction exists, then the Board shall propose that a suspension(s) and/or fine(s), be imposed against the violating party and shall direct that the Fining Committee hold a hearing to determine if a suspension(s) and/or fine(s) should be imposed. Additional provisions concerning the power of the Board are as follows:

i. The Board may not propose a fine in excess of $100.00 per person, per violation. However, for violations of a continuing nature, such fine may be proposed on the basis of each day of such continuing violation as long as such proposed fine does not exceed $1000.00 in the aggregate.

ii. There is no statutory or document limit on the length of a suspension except that may be for “a reasonable period of time” provided however that such suspension may not impair the right of an owner or tenant of a parcel to have vehicular access and pedestrian ingress to and egress from the parcel, including but not limited to, the right to park.

iii. The Board may propose a fine or a suspension or both a fine and a suspension for each violation.

iv. Because the above suspensions and fines are based on individual infractions, the Board may propose multiple suspensions and fines if multiple infractions are found to exist.

v. The Board reserves the right, but not the duty to prepare a schedule of suspensions and fines for particular violations.

vi. The Board also reserves the right, but not the duty, to propose suspensions and fines and then suspend the same upon condition of compliance or because compliance had occurred prior to the presentation.

2. ACTIONS BY THE FINING COMMITTEE

a. The Fining Committee shall then notify the Owner in writing of the alleged infraction(s) and of the proposed suspension(s) and/or fine(s). It shall also notify the Owner that a hearing will be held concerning the same. The notice shall include the alleged infraction(s), the date, time and place that the hearing will be held and an announcement that the Owner may appear at such hearing to address the issue. The notice shall be served on the Owner by certified and regular mail at least fourteen (14) days prior to such hearing. Service shall be completed upon the depositing of the notice in an official postal depository, postage prepaid.

b. At the appointed place and time, a full hearing will be held before the Fining Committee concerning the alleged infraction(s) and the proposed suspension(s) and/or fine(s). A Board representative shall present evidence reflecting that the proper notice was served on the Owner, and shall then present the case to the Fining Committee. The owner may represent himself or shall have the right to be represented by counsel at the hearing. Both the Board representative and the Owner shall have the right to present such evidence as they deem appropriate and may present and cross-examine witnesses.

c. Multiple infractions by the same Owner may be discussed at the same hearing.

d. Strict rules of evidence shall not be required, however, the Fining Committee shall comply with such standards that will insure due process and fair play.

e. The Fining Committee has the right to continue any hearing for such periods of time that it deems necessary in order to insure that full information is presented upon which to make a decision. Appropriate notices of such continuances must be given to the Owner.

f. If notice is given as required above, the failure of an Owner to appear at the hearing shall in no way impede the completion of the hearing.

g. If, after a full hearing, the Fining Committee does not approve a proposed suspension and/or fine by majority vote, then such suspension and/or fine shall not be imposed.

h. If, after a full hearing, the Fining Committee, by majority vote, determines that the infraction or infractions has occurred, then the suspension and/or fine proposed by the Board shall be imposed.

i. For multiple violations, the Fining Committee may impose some suspensions and/or fines and refuse to impose other suspensions and/or fines.

j. All decisions of the Fining Committee imposing suspensions and/or fines shall be reported in official minutes sent to the Board of Directors and sent to the Owner by certified and regular mail.

3. FINAL ACTION BY BOARD OF DIRECTORS

At a Board Meeting after receiving notification from the Fining Committee that a Fine or Suspension has been imposed, the Board shall approve such action by Motion.

D. COLLECTION OF FINES

Fines imposed hereunder shall be paid not later than thirty (30) days after the decision of the Fining Committee is mailed to the Owner. All such fines shall be treated as an individual assessment secured by a lien and otherwise subject to the provisions of Article V of this Declaration. Should it be necessary for the Association to employ an attorney to enforce such fine, the Association shall be entitled to recover the costs and expenses thereof from the defaulting party, together with a reasonable attorney’s fee, pursuant to Section 720.305, Florida Statutes and the said Article V.

E. ENFORCEMENT OF SUSPENSION

The Association may enforce any suspension imposed hereunder using any and all available legal and equitable remedies. Should it be necessary for the Association to employ an attorney to enforce such suspension, the Association shall be entitled to recover the costs and expenses thereof from the defaulting party, together with a reasonable attorney’s fee, pursuant to Section 720.305, Florida Statutes.

F. FINES AND SUSPENSIONS FOR THE NON-PAYMENT OF ASSESSMENTS AND OTHER CHARGES

Notwithstanding the above, suspensions and/or fines for the non-payment of assessments and other charges may be imposed by the Board of Directors in conformance with the terms of the Declaration amendment and shall not be submitted to the Fining Committee for review and action. No such suspension or fine may be imposed until the person who is to be fined or whose use rights are to be suspended is afforded the opportunity of a hearing before the Board. Notice of such hearing shall be given in the same manner as is provided for above.