State Law Overrules CC&Rs; on Assessment Cap

QUESTION: Our condominium association’s board of directors increased the monthly assessment amount by 18% when the fiscal year began on the first of January. We were told in advance this increase was going into effect so we tried to stop it.

My husband and I argued against it because the legal documents of our association state that the owners must approve any assessment increase that is 5% more than the previous year’s amount.

The management company representative says a state law gives the board of directors the authority to increase the assessment amount by as much as 20% without the consent of the owners.

We bought our unit assuming the association is governed by the declaration, bylaws and other legal documents. Can a state law make our documents invalid?

ANSWER: Your association manager is correct. California Civil Code, Section 1366, specifically states that it overrides more restrictive limitations that appear in the association’s governing documents. However, certain requirements are imposed on the board.

First, the board must distribute the annual budget between 45 and 60 days prior to the beginning of the fiscal year.

If the board fails to distribute the budget to the association members in the proper manner, then it does not have the authority to increase the budget beyond the limits stated in the association’s documents.

With a properly distributed budget, the board may increase the annual budget by 20% and, in addition, may impose a special assessment of 5% or less.

A special assessment of an emergency nature may be approved without limits if expenditures are required by a court order or some type of threat to the safety and health of the owners or others.

I can understand your concern when you learned that restrictions on budget increases in your association’s legal documents have been superseded by state law. In my opinion, each owner should note in the margin of the pages in their documents a reference to the state law so that future buyers obtain correct information.

Many other states have laws similar to California’s, especially those that have the Uniform Condominium Act or the Uniform Common Interest Ownership Act.

It’s Owner’s Right to Have Equal Treatment

Q: I live in a planned unit development consisting of almost 50 townhomes. I have reason to believe that one of the board members is not paying her monthly assessment. In the past, the board has waived any late penalties when she was delinquent.

Last month, my assessment payment was late and the board treasurer notified me that I would have to pay a $10 late charge. I believe that I am being treated unfairly.

I have lived here 10 years and have never been late with my payment before. I would gladly pay the penalty, but I think the board has a duty to be fair to all owners.

A: The board should treat everyone in a fair manner. When they grant favors or make exceptions to their enforcement policies, they are vulnerable to criticism.

Board members have an obligation to uphold the legal documents and the policies and procedures of the association.

They are not entitled to privileges beyond those granted to other owners.

The association’s written delinquency procedures should be distributed to all the owners so that everyone is aware of the penalties.

Since you were late with your payment, I suggest you pay the penalty. However, you have a right to expect that all other owners will abide by the same rules. Perhaps you will want to write to the board to let them know you expect that, in the future, all delinquent owners will be penalized equally.

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 can write to her in care of “Condo Q&A;,” Box 5068, Thousand Oaks, Calif. 91360.