Added Charge for Rental Owners?
QUESTION: In the last year, three of the eight units in our condominium association have been rented out by the non-resident owners. All of the association’s bookkeeping and maintenance responsibilities, except for gardening and trash collection, are performed by the five resident owners with no assistance from the non-resident owners.
Our association’s CC&Rs; seem to indicate that all unit owners must pay equal assessments. I would like to know if it is possible to amend the CC&Rs; so that owners who rent their units could be assessed a higher annual assessment than the resident owners without increasing their interest in the common area.
ANSWER: You might be able to get approval from enough owners to pass the amendment; however, it could be challenged in court. In most community association’s legal documents, the percentage of ownership correlates with the assessment paid and the voting percentage.
Your board should contact an attorney who specializes in community association law before proceeding with your idea.
One solution would be to pass an amendment allowing compensation for the owners who serve on the board, though this brings in several other concerns, such as conflict of interest.
The board members should not have the power to approve the amount of their own compensation. Being paid for their work may increase their personal liability and may have an impact on their liability insurance coverage.
A better solution would be to increase the association budget to include contracting with companies or individuals for all of the association’s responsibilities, including bookkeeping and maintenance.
Then the true cost of taking care of the complex and running the association would be shared by all owners. Board members would still have to serve on the board to determine policy matters, but this would surely decrease the number of hours spent and reduce the resentment between resident and non-resident owners.
Clarifying the Law on Late Charges
Q: I own a condominium unit that is rented out. The association’s monthly newsletter recently stated that the California Civil Code permits a late charge of 10% plus interest.
I would like to know exactly what the law says.
Can the association assess a late charge of $14 to save computation time rather than computing the 10% late charge?
A: Here is the wording of Civil Code Section 1366(c): “Regular and special assessments levied pursuant to the governing documents are delinquent 15 days after they become due. If an assessment is delinquent, the association may recover all of the following:
(1) Reasonable costs incurred in collecting the delinquent assessment, including reasonable attorney’s fees.
(2) A late charge not exceeding ten percent of the delinquent assessment or ten dollars ($10), whichever is greater, unless the declaration (CC&Rs;) specifies a late charge in a smaller amount, in which case any late charge imposed shall not exceed the amount specified in the declaration.
(3) Interest on all sums imposed in accordance with this section, including the delinquent assessment, reasonable costs of collection, and later charges, at an annual percentage rate not to exceed 12 percent interest, commencing 30 days after the assessment becomes due.”
Section 1366(d) states that “Associations are hereby exempted from interest-rate limitations imposed by Article XV of the California Constitution, subject to the limitations of this section.”
It appears that your association’s late charge of $14 is a combination of the flat $10 fee plus a $4 collection fee. The association may levy the late charge in this manner without computing the percentage unless the declaration specifically states otherwise.
Refer to your association’s declaration to see if the specified late charge is a smaller amount. Civil Code Section 1366(c) (2) is one example of a statute that does not supersede the association’s legal documents.
The association’s delinquency procedures should be distributed to the members annually.
Can’t Sleep Because of Dogs Upstairs
Q: I purchased my condominium unit about a year ago in a renovated conversion. A few months after I moved in, the unit above me was sold. The new owners installed hardwood floors in every room and brought two full-grown sheep dogs with them when they moved in.
My unit is small and I cannot escape the sound of dog nails and footsteps above my head. I work very late hours and am awakened every morning by this noise.
When I bought my unit the developer only offered carpet and tile as floor coverings. Therefore, I did not anticipate this kind of problem. I have written letters, spoken at board meetings and made numerous phone calls but nothing has happened.
The man upstairs is now serving on the board. He was elected by other dog owners and insists that my complaints are vindictive.
Isn’t there some way that I can get some peace and quiet?
A: Contact an attorney for advice. I can imagine that this situation is certainly interfering with your enjoyment of your home.
Unless the association’s CC&Rs; prohibit hardwood floors, there is really nothing that the association board can do for you. Hardwood floors are prohibited in many condominiums. It’s a sensible restriction, since most buildings do not have adequate soundproofing to make it tolerable to the downstairs neighbors.
Perhaps you can persuade your neighbor to meet with a mediator to see what solution might be acceptable to both of you. It seems sensible that they would at least be willing to carpet the bedroom areas.
Hickenbottom is past president of the Greater Los Angeles chapter of the Community Associations Institute (CAI), a national nonprofit research and educational organization. She welcomes readers’ questions, but cannot answer them individually. Readers with questions or comments can write to her in care of “Condo Q&A;,” Box 5068, Thousand Oaks, Calif. 91360.