Special Assessment
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SPECIAL ASSESSMENT LIMITATIONS

Boards are allowed to special assess the membership up to 5% of the current fiscal year's budgeted gross expenses without membership approval regardless of any limitations that might be found in the governing documents. (Civ. Code §5605(b).)

How Determined. If an association's annual budget is $100,000, then the maximum special assessment the board can impose without membership approval is $5,000. That does not mean $5,000 per unit. The $5,000 assessment is divided among all units according to the allocation schedule contained in the CC&Rs. Once an assessment has been approved by the board, proper notice must be given to the membership before it can be levied.

Membership Approval. Unless it is an emergency assessment, a special assessment over 5% requires membership approval, i.e., a majority of voting members once a quorum has been established. (Civ. Code §5605(b).) The statute defines "quorum" to mean more than 50% of the owners of an association. Because of the way the statute is worded, the quorum requirement is fixed at a majority of the owners. Language in governing documents that allow for reduced quorums does not apply to special assessments. If apathy prevents an association from achieving the majority quorum requirement (a common problem with large associations), it might be possible to petition the court to reduce the quorum requirement.

Balloting. Voting for a special assessment is done by secret ballot.

Conflicts. See hierarchy of documents. Also see rules of interpretation when it comes to conflicts in and between statutes and governing documents.
 
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