Expenditure Limitations
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EXPENDITURE LIMITATIONS

Special assessments may only be used for those purposes for which the assessment was approved. An assessment approved by the membership for new roofs may not be used by the board for new landscaping.

Flexibility in Use of Funds. Even though boards cannot divert special assessment monies from one project to other projects, boards have discretion to use the monies for related issues. For example, a special assessment approved for replacement of drain lines can be expanded by the board to include remediation of mold discovered in the walls once the replacement program has been started. Although mold was not on the ballot, it is sufficiently related to the replacement of pipes to fall within the board's discretion when repairs are made.

Where a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development's common areas, courts should defer to the board's authority and presumed expertise. Thus, we adopt today for California courts a rule of judicial deference to community association board decisionmaking that applies, regardless of an association's corporate status, when owners in common interest developments seek to litigate ordinary maintenance decisions entrusted to the discretion of their associations' boards of directors. (Lamden v. La Jolla Shores, (1999) 21 Cal.4th 249.)

No Time Limit. Unless imposed by the assessment itself or by the governing documents, there is no time limit on the expenditure of special assessment funds. Even so, any delays in using the monies for their intended purpose must be reasonable.

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Adams Stirling PLC