Homeowners associations (HOAs) are established in communities with a common interest in keeping the streets clean, the lawns mowed, and the neighborhood quiet. An HOA is meant to serve the community by maintaining communal property, communicating with residents, and improving or repairing community assets. Some of these efforts are supported through HOA special assessments—an additional fee that each homeowner in the community must pay each month.
The governing body of the HOA also has the right to collect special assessments and additional financial resources from homeowners, in certain circumstances. Although special assessments are regulated according to numerous legal precedents, including the Davis-Stirling Act, not all HOAs abide by the rules.
Here is an overview of some special assessment abuses that have been prevalent within the last decade. These cases are not the only instances of special assessment fraud, but they serve as a window into this widespread issue within California HOA communities.
Homeowners Association Special Assessments
Special assessments are a means for HOA collection of additional dues in which the governing body requires residents to fund community projects that exceed the HOA budget and are considered an emergency.
For instance, if the communal gathering place is damaged in a tornado, a special assessment may be levied to assist the HOA in recovering sufficient funds to repair the structure on behalf of the community.
However, special assessments require careful planning, as numerous laws govern their application. In California, a special assessment cannot be levied for more than 5% of the year’s fiscal budgetary value without a community vote.
Despite this and other rules, some California HOAs have historically attempted to secure more money from special assessments than is their right, or they do so in a manner that does not comply with the rights of the members.
A few examples of cases in which the HOA governing body overstepped its authority include:
Diamond v. Superior Court
In 2013, Arlyne M. Diamond, of the Casa Del Valle common interest development, petitioned the Superior Court of California to review her previous request for judgment against her HOA. The HOA had levied a special assessment (to finance retailing the roofs), which Diamond was unable to pay on the HOA’s timeline.
As an alternative, she suggested a payment plan that would give the HOA the same value over a longer term. The only definitive response she received was a delinquent assessment for failing to pay the original charge, a total cost of over $12,000.
The court, reviewing the work of the previous trial court, found that the association had failed to adhere to notice requirements and communicatory guidelines that must predate further action.
This was a violation of the Davis-Stirling Act, a set of legal provisions to protect people in HOA managed communities—especially from improperly applied special assessments and their consequences. Because of this, the HOA’s right to take legal action regarding Diamond’s assessment was eliminated.
Multani v. Witkin & Neal
The 2013 case of Afshan and Rahim Multani is a similar example of success in suing an HOA. The Multanis were delinquent in their assessment charges to the Castle Green Homeowners Association, which decided to foreclose on their house.
The governing body of the homeowners association failed to abide by the proper guidelines in their rush to foreclose, including attempting to foreclose on a home in order to collect delinquent assets totalling less than $1800, which is prohibited by Civil Code section 1367.4 of Senate Bill No. 137, and multiple mailings sent to the wrong address.
In addition to the misuse of special assessments, other abuses of authority also plague HOAs and can lead to unfair costs:
Boswell v. The Retreat Community Association
In 2016, David and Melina Boswell sued the HOA of The Retreat in Corona, California. The HOA and its president, Carl Schmidt, did not approve of the Boswells’ Facebook page, which was openly critical of the HOA.
To deal with these problematic residents, the HOA began fraudulently utilizing its governing body privileges in the hope that the family would leave or take down the Facebook page.
Without justified reason, 19 acts demonstrating abuse of authority were waged against the homeowners, including: the HOA forced the homeowners to remove or redo HOA-approved architecture, towed the cars of friends with issued parking passes, and told local realtors that the Boswells’ business of flipping houses was a scam.
The Boswells secured legal victory against the HOA for issues of bad faith behavior. This case serves as an example that the many privileges granted to HOA leadership, including the ability to levy special assessments, may be utilized inappropriately. However, legal action can secure resident rights against HOA abuses.
Protect Your Rights in Cases of California HOA Special Assessment Abuse
If you have been the victim of an HOA that oversteps its authority when utilizing its special assessment privileges, it is your right to take legal action. The attorneys at Lehr Law can help you to defend your rights as a resident of a California HOA and fight against unjust special assessments.
Contact Lehr Law to schedule a consultation and share the details of the situation with a professional legal team.