DELINQUENT AND SPECIAL ASSESSMENTS
Q:
Is an HOA allowed to announce the names of owners who have not paid their dues?
K.G., INGLEWOOD A:
I generally recommend against a “delinquent list” being published that announces the addresses or names of homeowners who are behind on their assessments. It comes down to balancing the privacy of the homeowners who may be having problems against the transparency interest of the assessment-paying homeowners. I think many if not most law firms and companies who pursue delinquent assessments use file numbers to identify given delinquency matters, to avoid unnecessarily shaming those who are behind. In my view, the prompt and efficient pursuit of delinquencies is better than embarrassing the delinquent.
Q:
My HOA has good reserves, but the board keeps proposing special assessments. We started some roof repairs, but did not finish. Then we started street repairs, but did not finish. Now the board wants to special assess all homeowners thousands of dollars to do both projects. The board doesn’t want to use the reserves set aside for these projects. They recently added an amenity the homeowners did not want. What can homeowners do?
N.K., HUNTINGTON BEACH A:
The reserve funds are accumulated for specific stated common area elements and should be used for that purpose. Also, unless your HOA governing documents set a more liberal limit, the board can only specially assess up to an amount equal to 5 percent of the annual gross budgeted expenditures per year, or it must seek membership approval. If your board is not listening to a majority of the homeowners, they shouldn’t be on the board for long. However, is it possible that a majority of neighbors do not agree with you? Sometimes in my HOA board (yes, I sit on one), I find to my surprise that my opinions are not shared by the majority.
Q:
My HOA just levied a [very large] emergency assessment against each of the units. It is to repair and replace balconies, stairwells and siding. They have cited a threat to personal safety, but these issues developed over time as the result of neglect and mismanagement by the HOA and their failure to conduct regular maintenance. While the HOA may not have seen the issue until recently, it most certainly was foreseeable. Is this legal?
B.P., CITRUS HEIGHTS
A:
The statute authorizing emergency assessments, Civil Code 5610, allows boards to impose emergency assessments in the event of a court order, an extraordinary expense upon discovery of threats to personal safety, or for an extraordinary expense to address something which could not reasonably have been anticipated in the budget. It sounds like the board is invoking the second of the three reasons. I suspect many boards will in coming years invoke this “threat of personal safety” reason because of the mandatory inspections required by Civil Code Section 5551, as all HOAs must complete their first inspection before 2025.
A second but often overlooked issue is educating the members. All too often, boards assume too much about what the members know and understand about the need for a major assessment (or assessment increase). Boards should take extra effort to provide the members information explaining the “whys” and not just the “whats.”