Adams Stirling PLC
Menu

REIMBURSEMENT ASSESSMENTS

Older sets of CC&Rs often are often silent about imposing a special assessment against individual members for reimbursement of expenses incurred by the association repairing common areas damaged by members or their guests or tenants. An argument can be made that it falls under the general powers of a board to act in the best interests of the association and that it's implied in Civil Code §5855(a). To remove any uncertainty, association's should amend their governing documents to include it.

Lien & Foreclose. The Davis-Stirling Act allows associations to lien and foreclose on unpaid reimbursement assessments, which it calls a "monetary charge."

A monetary charge imposed by the association as a means of reimbursing the association for costs incurred by the association in the repair of damage to common area and facilities caused by a member or the member’s guest or tenant may become a lien against the member’s separate interest... (Civ. Code §5725(a).)

Hearing. Before a reimbursement special assessment is levied against an owner, the owner should receive written notice of a hearing at which the assessment may be levied so the owner has an opportunity to present evidence as to why the assessment should not be levied. (Civ. Code §5855(a).) The board should make sure any expenses are clearly documented and the documentation is provided to the owner.

Collection. If the owner refuses to pay for the damage he/she caused, an association can impose late fees and interest and then record a lien against the owner's unit and foreclose as they would with any other delinquent assessment.

Recommendation: Because it is unclear whether authorizing language for reimbursement special assessments needs to be in an association's governing documents, the more conservative course of action is to amend an association's documents to include it. Doing so, avoids the potential for a legal challenge.

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