How an HOA can Levy Special Assessments – San Diego Real Estate Attorney

 Special can assessments arise in many different situations.  Typically, a homeowner’s association (HOA) either has no reserve fund or an insufficient fund in place in order to cover large-scale repairs or other emergency situations.  In such instances, special assessments are typically levied against homeowners covered by the HOA.  In California, the imposition of special assessments is dealt with under California Civil Code Sections 5600-5625.

Under California Civil Code §5605(b), an HOA board may not impose a special assessment which in the aggregate exceeds 5%

 of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of the members at a member meeting or election.  The term “quorum” is defined as more than 50% of the members.  As a result, a majority of a quorum of the members must approve an imposition of special assessments which exceeds 5% of the budgeted gross expenses.

However, California Civil Code §5610 provides a limitation on the requirements for special assessment levies pursuant to section

An extraordinary expense required by a Court order; 5605, in instances of emergency situations.  This section provides that there are no limitations on the imposition of special assessments in the three following “emergency situations”:

  1. An extraordinary expense necessary to repair or maintain the common interest development or any part of it for which the association is responsible where a threat to personal safety on the property is discovered; and
  2. An extraordinary expense necessary to repair or maintain the common interest development or any part of it for which the association is responsible that could not have been reasonably foreseen by the board in preparing and distributing its annual budget report.

It is worth noting that for the third emergency situation above, prior to the imposition of the special assessments, the board must pass a resolution including written findings as to the necessity of the extraordinary expense, as well as why the expense was not or could not have been reasonably foreseen in the budgeting process.  This resolution must be distributed to members along with the notice of the special assessment.

If you are a member of a HOA board or a homeowner governed by one, and have any additional questions regarding the imposition of special assessments, please contact the VC Law Group, LLP via telephone at (858) 519-7333 or email at info@thevclawgroup.com.