Real Estate & Property Law

May an HOA or Condo Board Turn off the Water or the "Juice" for Unpaid Assessments?

Many associations are having a difficult time collecting assessments these days. They are looking for "incentives" to get people to pay. Here is an example of a common question:

"I am in a 10 unit complex. There is one DWP meter for the complex paid by the HOA. [Approximately 1/3] of our annual budget goes to water. If an owner fails to pay dues can the HOA shut off water to that unit? Would our bylaws need to cover this?"

First of all I would say emphatically that an HOA or Condo Association could get into trouble turning off anyone's water if there was no provision in the governing documents (CC&Rs for Condos or HOAs) allowing it.

Secondly, I would not advise amending the documents (even with owner approval) to allow for disconnection of water, electricity or utilities for non-payment of assessments, unless we were talking about a separate corporation in the case of water that acts as a water company.

Third, the potential for trouble if the water, gas or electricity is turned off seems to me to greater than the potential benefit. Without electricity or gas for heat, cooking, etc. accidents can happen (candle use, use of gas and propane stoves indoors, failure of oxygen machines, battery pack wheelchairs and the like used by those who need it) and worse things can happen such as attempts by residents to tap into the services illegally causing damage. Without water toilets don't work, people cannot wash, children go thirsty.

You may get different advice from other attorneys, but turning off basic services is not a remedy I would recommend. And when there is only one system without shutoffs, I do not even know how it would be accomplished realistically.

Full post as published by California Condo & HOA Law on February 23, 2010 (boomark / email).