How to determine whether a homeowner fee hike is valid
Question: There are 58 units in our common-interest development. Last January our homeowner association annual assessment fees went up $52. Is a ballot vote consisting of 27 owners legally binding to approve that increase?
Answer: Even assuming all the quorum requirements were met, without knowing how many people attended the meeting, where the vote took place and how many owners participated in that vote, or if there was a meeting, it is difficult to make a determination.
Here are some guidelines: The normal quorum is 50% of the homeowners plus one. A majority of the quorum, whatever that number may be, would be enough to pass the assessment if your Covenants, Conditions and Restrictions (CC&Rs) require a majority. If more than that was required, the assessment could be enacted only if that percentage of the quorum voted in favor.
Owners should keep in mind that proxies, when voted, are revocable up until the votes are counted. Anything labeled a ballot, on the other hand, is irrevocable once cast.
The Davis-Stirling Act permits associations to increase annual assessments as much as 20% in one year without a vote of the homeowners. That increase takes place at a duly noticed meeting in which the proposed 20% increase was placed on the agenda provided to all titleholders in advance of the meeting.
Special assessments of up to 5% of the annual budget can also be approved by the board without a vote of the homeowners. That too must take place at a duly noticed meeting with an agenda delivered to all titleholders in advance of that meeting.
If either of those circumstances applies at your association, the increase may be valid whether or not titleholders voted for it. But the increase cannot take place without a duly convened meeting of the board; a vote; minutes distributed to all titleholders detailing that board meeting and vote’s outcome; notice to all titleholders of any change in assessments and/or fees; and a date when the new assessments and/or fees become effective.
Send questions c/o P.O. Box 10490, Marina del Rey, CA 90295 or e-mail firstname.lastname@example.org.