HOA special assessments are a powerful tool in the arsenal of that governing body to fund the repairs and maintenance of quality of the public spaces within the community.
The residents of a homeowners association rely on these services as part of the intrinsic value of their property. Failure to uphold the usability and safety of these communal areas can not only impact the value residents derive from the neighborhood but also their safety.
For these reasons, HOAs may impose special assessments to help fund important renovations or urgent repairs for which the annual budget is not sufficient.
However, in certain circumstances, residents have the right to defend against unfair special assessments, and they may challenge an assessment to avoid paying all or a portion of the amount.
Here is an overview of the specific situations which homeowners can legally challenge or dispute special assessments imposed by their HOA.
When the Cost Exceeds the Legal Limit
In California, HOAs must abide by the 5% rule—that is, a special assessment’s value cannot exceed 5% of the current year’s fiscal budget. This prevents the HOA from charging unreasonable amounts at its own discretion and caps their possible assessments within each year.
If you have received a special assessment that comprises more than 5% of the value of the budget for the year, you may have the legal basis to contest the assessment. Remember that the 5% rule applies to all residents communally; the full 5% value is divided evenly among all households.
To determine if you are being overcharged, you must calculate how many households are being assessed and what the full value of the assessment is.
Additionally, California law mandates that a majority of a quorum of community members must vote in favor of exceeding the 5% cap. This allows communities to agree to being charged more for projects that are important to them.
However, some HOAs will attempt to write different types of membership voting rules into their contracts. These are not legally enforceable and can be contested if they result in an assessment to which a majority of a quorum did not consent.
When the Assessment Is Being Used Improperly
Special assessments are a narrowly defined category and must be used for very specific tasks. These include remedying emergent issues, such as roadway damage that makes an area of the neighborhood inaccessible.
Special assessments may also be used for large projects that benefit the entire community, such as renovation or construction of public pools and parks.
If your HOA is using special assessments to replace the cost of regular maintenance tasks that should be covered by annual dues, you may legally challenge the assessment.
When You Did Not Receive Proper Notice
HOAs are required to notify all households of an upcoming special assessment. This is best accomplished through certified mail, though the governing body may also appear in person as long as they can confirm that they spoke to someone in the household.
Residents who attend community meetings are considered informed about upcoming assessments. This notification must occur between 30 and 60 days before the assessment is issued.
Failure to properly notify residents of an upcoming assessment is grounds to legally contest that assessment.
In this case, if all other elements of the special assessment are legal, the resolution typically still requires homeowners to pay the dues, but they may be given an extended timeline due to improper notification practices.
When You Cannot Afford the Assessment
In certain circumstances, homeowners have the right to challenge an HOA special assessment if it would place undue strain on their financial well-being.
These defenses are often difficult to uphold, and many households face penalties for not paying their assessments. These include late fees, liens, or prohibitions on using communal spaces and amenities until the owners pay their dues.
However, in other situations, the governing body may receive notice of the contested assessment and meet with the homeowner to determine an alternate plan, such as an extended repayment term. Each HOA will differ in how it approaches this issue.
If you feel your HOA has acted outside of the allowable grounds for issuing a special assessment, contact an attorney experienced in HOA disputes. Understanding your options for recourse can better guide you to the best possible outcome for your situation.
Get Legal Help When Challenging a California HOA Special Assessment
Homeowners associations can create thriving, high-quality communities when operated correctly, but they can also serve as a financial burden when challenges such as special assessments occur improperly.
The attorneys at Lehr Law help homeowners to contest the behaviors of their HOA governing bodies when they are acting outside of their legal scope of authority.
Contact Lehr Law to schedule a consultation to discuss your HOA’s behaviors and whether their special assessments fall within the realm of normal and legally enforceable.