Sunday, February 9, 2014

DUES INCREASE WITHOUT MEMBER INPUT


DUES INCREASE WITHOUT MEMBER INPUT

QUESTION: Can the board increase monthly dues without discussing it with the homeowners first?

ANSWERYes they can. The duty to manage the association falls to the board of directors. They are the ones most knowledgeable about the association's financial condition since they pay the bills and review the association's financial reports.

Directors don't like raising dues because (i) they have to pay them just like everyone else and (ii) they get abused by members when they do. Even so, by statute (Civil Code §5600) boards are required to levy assessments sufficient to perform their duties. The legal duty falls on them not the membership. That explains why boards don't seek permission from the membership and why they increase dues when they would rather not.

Assessment Restrictions Void. Even if your CC&Rs were amended to require membership approval for any and all assessment increases, that restriction is voided by the Davis-Stirling Act. Regardless of anything to the contrary in an association's governing documents, boards may increase regular assessments up to 20% and levy special assessments up to 5% without membership approval. Anything more requires owner approval, which is defined as approval by a majority of votes at a meeting with more than 50% of the owners in attendance. (Civ. Code 5605(b).)

RECOMMENDATION: If you as a member want a say in all assessment increases, you need to run for the board.