Real Estate & Property Law

Variable Assessments in HOAs - What's Right?

Variable assessments cause a lot of consternation for associations, especially those that do not have professionals to guide them. There are all sorts of questions that arise. Here is one example:

"HI Beth, I think your articles dealing with hoa's are wonderful! so thank you for that. I had one topic that I didn't see discussed, We are a small hoa that started 10 years ago, and initally, we just broke down the hoa dues of 3 units into total bills / 3 (this worked for years, but now our insurance has skyrocketed, and the hoa dues are now way skewed. So here is the break down of the units 1850 sq ft , 1950 sq ft, and 1200 st ft. so initally it was established that even though there are different sq footages we each use the same amount of garbage typically. But in the last couple years our insurance went from $1200 - $4000 and the larger units are of course getting much more coverage then the smaller units. The reply from the hoa was that well as far as liability its all shared equal, but the fire covereage should be divided by sq footage only.

Here is my question - is there a general breakdown of how hoa dues should be or are required to be split with ca hoa's? Im in the smallest unit so I feel that Im paying more then my share for the other units benefits, and in a 3 condo vote, the 2 large units seem to always out vote me. "

It is unfortunate in associations where the majority has the power to make decisions that force the minority to pay more than their fair share. However it is important to note that it is more likely that the governing documents of the association dictate the proper legal allocation of assessments than any vote of a board, meaning look in the CC&Rs to see how the assessments are allocated. When square footage ratios come into play, there still often are some expenses that are shared equally. Often, things like garbage, management, and general operating costs are shared equally while painting, roofs, siding, insurance and other expenses related to the maintenance of the buildings is shared pro rata. It becomes complicated when an association has to collect equal assessments for operating costs and recreational facilities like pools and clubhouses, and then have to have a separate allocation for reserves for the building improvements housing the units.

Still, difficult or not, unless a proper amendment is passed changing the allocation (which sometimes requires a high percentage of member approval AND lender approval), the allocation in the governing documents is the legal allocation.

And if persons get together and set up a condo ownership situation without legal advice as to how to set it up properly and in a manner that protects fairness, opting instead for the informal process that requires a member vote on important decisions, and that leaves one party at a disadvantage, I don't know what to say other than I guess you get what you pay for.

Full post as published by California Condo & HOA Law on May 18, 2010 (boomark / email).