Reader Questions - Limit on Assessments, Board Amending CC&Rs

Hello Kelly,

I have a question for you. I have owned my condominium unit since 1984. When my husband and I purchased our condo the dues were $90.00 per month which we thought were very reasonable. In twenty years the fees have doubled and just this past week we received notice that beginning November 1st the dues are going up to $200.00 per month!

My husband passed away two years ago so I am on an extremely “fixed” budget and because I work for local government I am also facing a 5% pay-cut beginning in November….With today’s economic times being what they are this seems extremely unfair! I have seen no improvement in service around the complex….sprinkler heads are still broken, fences are falling down, etc.

Is there a cap on what an HOA can charge for its monthly dues and where does it end???

Thank you,

R.J., Buena Park

Dear R.J.,

It is an unfortunate fact of life that homeownership becomes more expensive each year. In addition to the repair and increasing maintenance of aging buildings, the costs of operating a project increase, requiring budgets also to increase. Some association boards over the years have focused not upon making sure the budget is reasonable, but making the budget fit the desired assessment goal. This short-sighted approach actually hurts the homeowners, who years later will suffer from large increases or special assessments due to deferred maintenance and underfunded replacement reserve funds.

Boards can increase assessments up to 20% per year, under Civil 1366(b)(in 2014, at 5605(b)), even if the governing documents have a stricter limitation upon increases. This allows boards flexibility, to make sure that all the expenses of joint home ownership are properly budgeted and covered.

Thanks for your question,
Kelly

Board Amending CC&Rs

Mr. Richardson,

First, let me thank you for all of the very informative articles you publish.

Even though our Declarations specify that the only way an amendment can be made is with the written consent of 2/3 of the members of the association, our president states that a legal opinion allows the board to make changes without consent of the homeowners, as long as they are reasonable and enforceable.

Is this legal?

R.J., Menifee

Dear R.J.,

A board can amend CC&Rs in two limited circumstances without a membership vote. If CC&Rs contain illegal discriminatory restrictive covenants (listed in Government Code 12955), Civil 1352.5 allows a board to remove such discrimination without membership vote.

Some covenants contain provisions giving the developer certain rights to help their sales efforts. Civil 1355.5 allows a board to delete certain limited items from the CC&Rs… but then at 1355.5(d) requires a membership vote to ratify it! This statute is not practically useful, but it is “on the books”.

Soon, boards can amend CC&Rs and bylaws to update outdated statute numbers, under Civil 4235, effective January 1, 2014.

Boards should check with the HOA’s attorney before considering an amendment under any of these situations, and be sure to discuss the amendments in open session. It’s important to get it right.

Reasonable or not, any other CC&R amendment must be by a membership vote, not just a board vote. So, if the attorney opinion is being accurately relayed by your president, I disagree.

Thanks,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.