Reader Questions - Officer Selection, Assessment Increases Updates

Dear Kelly,

In our HOA an election was held recently. The ballots were not secret. The homeowners have reason to believe they were counted before the meeting, (they were counted again at the meeting by three hand-picked individuals). Immediately after the votes for each candidate were announced, members of the board nominated the president to be elected president again (even though the president was not the top vote getter). Then they proceeded to elect two other members and the person with the most votes (a newcomer to the board) was given the title “member at large”.

The behavior does not seem ethical. Is it legal?

G.S., Oceanside

Dear G.S.,

Election for directors must be by secret ballots, and the envelopes containing the ballots should not be opened until the scheduled time to count the votes. The envelopes should be opened by or under the supervision of the Inspector of Election. The Inspector of Election can be one or three persons, appointed by the board of directors in an open board meeting. If the Inspector was not appointed by the board before the counting of the votes, then the members in attendance at the membership meeting to count the votes can vote to appoint 1 or 3 volunteers before the votes are counted.

Normally, the membership elects directors, but the directors decide on who will be the board officers. Your association bylaws will indicate how officers are selected, and most bylaws leave selection of officers to the discretion of the directors. A common mistake of boards is appointing officers or the Inspector of Elections in a closed (“executive session”) meeting – this must occur in open session.

Hope this is helpful,
Kelly

Dear Kelly,

What is the procedure for a HOA board to increase the monthly assessment of resident members of the HOA??

D.F., Newport Beach

Dear Mr. Richardson,

I read your column every week. I’d like to know the maximum percent that home associations can impose an increase in assessments per year. Currently, the assessment has been increased by 15%. I think that is too much!

Thank you for your time,

K.V., Westminster

Dear K.V. and D.F.,

Under Civil Code 5605(b), a board may increase regular assessments by up to 20% each year, provided it has timely issued the required “Annual Budget Report” items (listed in Civil 5605(a)) at least 30 days before the start of the fiscal year. A board also may impose a “special assessment” (meaning a one-time extra payment by all of the members) of up to 5% of the annual budgeted gross expenses of the association. Any increase more than 20% or special assessment more than 5% must be submitted to a vote of the membership.

The board can also impose “emergency assessments”, which are defined in Civil 5610 – check that definition before declaring an “emergency”.

Under Civil 5600(b), an association can only assess for actually anticipated expenses.

Major assessment increases, special assessments, and especially emergency assessments, should be thoroughly explained to the membership. You don’t like to receive unexpected bills – and neither do your neighbors.

Assessment increases should be discussed and passed only in an open board meeting. Also an increase in assessments is not effective until the board has given at least 30 days written notification to the members, per Civil Code 5615.

Thanks for your questions,
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®.