Adams Stirling PLC


Sometimes an association will discover that the assessment allocation schedule used by the association does not match the one described in the governing documents. Moreover, the assessments have been levied erroneously for years with some owners paying too much money and others paying too little. Can the error be corrected and how?

Correct Current Assessments. Associations have two choices: (i) immediately amend the governing documents to conform to the existing erroneous assessment schedule or (ii) adjust everyone's assessments to conform to the schedule found in the governing documents. Most choose the latter.

Correct Past Errors? Owners who overpaid often want a refund. Are associations legally obligated to pay such refunds? Whenever this issue has been litigated, the courts have ruled against refunding the overpayments. In Seabrook Island POA v. Pelzer, the court ruled that associations are not required to refund erroneous assessments collected prior to the point where a unit owner objected to the assessment or where the association learned of the improper assessment, provided:

  1. Assessments were levied in good faith; and
  2. No one objected when they were levied.

The court reasoned that unit owners have constructive knowledge of how assessments should be levied via recorded documents. If they did not object to the improper method of allocating assessments, unit owners are estopped from claiming a refund for those assessments.

(Also see: Queen's Grant II Horizontal Property Regime v. Greenwood Development Corp., 628 S.E.2d 902, 911, 368 S.C. 342, 358 (S.C. App. 2006); Kelso Woods Ass'n, Inc. v. Swanson, 753 A.2d 894, 900 (Pa.Cmwlth. 2000); Pew v. One Buckhead Loop Condominium Ass'n, Inc., 700 S.E.2d 831, (Ga.App. 2010); Wellington Condominium Trust v. Pino, 686 F.Supp.2d 117, 121 (D.Mass. 2010); Blood v. Edgar's, Inc., 632 N.E.2d 418 (Mass.App.Ct. 1994)).

Recommendation: Whenever this issue arises, boards should work closely with legal counsel to resolve the problem.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC