Adams Stirling PLC


QUESTION: A board member and I have conflicting beliefs as to the number of projects a special assessment can cover. I believe it is one; the board member believes it can be more than one. Who is right?

ANSWER: Your board member is right. For special assessments approved by the board (up to 5% of the current year's budgeted gross expenses) there are no limitations on the number of items for which the assessment can be used. (Civ. Code § 5605.) The same is true for member-approved special assessments. There are, however, limitations imposed by the ballot measure when the assessment is approved.

Ballot Limitations. For example, if the membership approves a special assessment of $100,000 for two items, roof and boiler repairs, the board cannot use the funds to asphalt the parking lot. They must use the funds for the roof and boiler. The limitation also applies to left-over funds. If at the conclusion of the work, $8,000 is left over, the board cannot use the surplus funds for new artwork in the lobby. The board must either (i) transfer the funds to reserves for future roof and boiler repairs, (ii) obtain membership approval to buy new artwork for the lobby, or (iii) return the money to the membership.

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Adams Stirling PLC