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Homeowners association board can hike assessments without vote by owners

Question: Our board keeps imposing assessment increases and owners can’t afford it. Regular monthly assessments are raised indiscriminately. Owners have no say in these increases. When board members are questioned they say the association attorney told them they could raise the assessments whenever they want. Can they do this and what are owners’ rights?

Answer: Boards can increase assessments without a titleholder vote as long as they follow the law.

Civil Code section 1366 provides for such increases. Regular assessments may be increased up to 20% a year, and special assessments of up to 5% of the association’s budgeted gross expenses may be approved without a vote by owners. Increases without a vote can happen only if the board has distributed all the documents required by Civil Code section 1365 for the prior year.

When the board calls a meeting for the purpose of raising assessments in any amount, approval of a majority of a quorum of titleholders present is required. But that only means if 51% of the owners are present at the meeting and 51% of them vote in favor, the assessments are increased. Thus as few as 26% of the homeowners can vote to increase assessments.

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Associations are not permitted to collect assessments without justification. Civil Code section 1366.1 states that an “association shall not impose or collect an assessment or fee that exceeds the amount necessary to defray the costs for which it is levied.” Meaning that without a budget, there is no justification for collecting assessments and efforts to do so are in violation of the law.

Emergency assessments, as defined in Civil Code section 1366(b) (1-3), may also be assessed and collected as necessary without a vote of titleholders.

Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or email noexit@mindspring.com.


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