Real Estate & Property Law

Special Assessments for Repairs and Maintenance in HOA or Condo

Here is a question I recently received from a reader:

"In a condo situation are repairs and replacement legally the same enabling a Board to special assess without owner vote? Is 1 a cap. improvement and the other not? Thank you so much."

Alot depends on what the governing documents say because they may define capital improvements in a limiting or expansive way that distinguishes them (or not) from reserve expenditures. There may be language that limits a board's authority and requires a certain percentage of owner approval for a capital improvement. There may be distinguishing language as to responsibilities between owners and the board for repair and replacement. For example, the documents may require owners to repair broken windows but require the board to replace damaged window frames. If there is nothing in the documents, then the deciding factor might be found in case law, or via logic.

And even if there is no voting requirement for the construction involved, if a special assessment is needed that exceeds the legal limits (5% of the budgeted gross operating expenses for a fiscal year), homeowner approval would be required, unless the matter qualified as an emergency assessment. Check out the link to the Davis Stirling Act on the mainpage of my website to read about assessment limitations. And check out the Primers in the webstore for much more information on assessments (including passing a large special assessment) and also on maintenance responsibilities (who fixes what).

Full post as published by California Condo & HOA Law on November 19, 2010 (boomark / email).