A homeowners association (HOA) is an appealing element in the decision-making process of many potential buyers when selecting a home. They feel confident that their community resources will be cared for and that the neighborhood will stay in good condition over multiple years, regardless of who moves in or out nearby.
This is achieved through a governing body that collects the HOA dues from each household and leverages them to keep public resources (such as sidewalks) in good repair or invests in community facilities, such as pools.
However, the monthly member dues may not be sufficient to cover emergency expenses or some other types of renovations—these gaps are filled by HOA special assessments.
The HOA governing body does have the authority to bill residents for dues beyond their monthly commitments, but this right to special assessments is governed by numerous restrictions and legalities.
Uncover the regulations surrounding California HOA special assessments and how they can impact homeowners.
What is the Difference Between a Fee Increase and Special Assessment?
How a homeowners association collects fees depends on what the fees are being used for. There are two types: regular dues and special assessments. Each can introduce an increased fiscal commitment on homeowners, but the rules surrounding each are different.
These are the fees paid on a consistent schedule by each homeowner, as established in the agreement they signed when they moved into the community.
California Civil Code Section 5605 dictates that a homeowner’s regular dues may only be increased annually, and this increase must apply to all members of the community to prevent targeting of specific families.
The amount of the increase cannot exceed 20% of the value of the previous year’s dues. This safeguards residents against sudden and untenably large jumps in the cost of living in a homeowners association. Residents must be notified at least 30 days in advance of an increase in dues.
Should the HOA governing body exercise its privilege to leverage a special assessment, it must comply with numerous rules. First, the assessment may not be valued at more than 5% of the current year’s gross expense budget.
Second, this amount is divided evenly among all homes in the community; in other words, if an assessment is $5,000 and the community is made up of 100 homes, each would see a bill of $50, not $5,000.
Finally, notice must be given between 30 to 60 days before the special assessment is billed, and such an assessment can only be utilized for a tight subset of potential situations, such as emergencies.
What Qualifies for Special Assessments?
Special assessments are used to help the HOA fund large projects for which standard dues may not be sufficient. Most commonly, these incidents are emergencies, such as when a flood renders an entire roadway unsafe to use and a substantial repair must be conducted immediately.
If the HOA does not have sufficient funds to pay for this unexpected event, it may levy a special assessment to pay for the community task. Similarly, other expenses that benefit the community may qualify for a special assessment.
One example is the installation, substantial renovation, or upgrade of community facilities, including pools, common areas, gyms, and parks. If the majority of a quorum of HOA members agrees to the procedure, the governing body may levy a special assessment in excess of the standard 5% cap.
However, special assessments must be applied equally to all residents and can only be used for emergency situations that impact the community as a whole.
A single resident may not be targeted with a higher bill than the others (even if the majority of the damage is located near their home and other residents are not as affected), nor can a special assessment be used for repairs affecting only one resident (such as a tree that has fallen on a house).
What Are Your HOA Rights?
In California, homeowners residing in association-governed communities possess certain rights aimed at safeguarding their interests and ensuring a fair and well-regulated living environment.
These rights include access to financial records and governing documents, participation in association meetings and elections, and the ability to petition for changes or address grievances.
Homeowners have the right to request and review financial statements, budgets, and contracts, promoting transparency and accountability. They also have the privilege of attending association meetings, voicing their concerns, and voting on HOA matters.
Additionally, California law provides homeowners with the opportunity to pursue dispute resolution mechanisms, ensuring they can seek resolutions when issues arise within the community.
These rights collectively empower homeowners to actively engage in their community’s governance and protect their interests within the realm of association living. Enlisting an attorney experienced in the rights of HOA residents can ensure your rights are protected and exercised to your advantage.
Protect Your Rights as an California HOA Resident
Whether your HOA is utilizing special assessments or increasing your dues, you have rights as a resident to fair treatment and the expectation that your governing body will correctly abide by California law.
The legal team at Lehr Law can help you defend your rights and address HOAs that may be overstepping their legal authority to charge dues to residents. Contact Lehr Law to schedule a consultation to discuss your HOA concerns.