๐Ÿ’ฌ Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account โ†’

โšก Takes 30 seconds

Already a member? Log in

MirS (California)
Posts: 2
Posted:
We are homeowners of newly built townhouses. Our builder was managing the hoa and recently he hired a different company.
We figured the new management company is charging way too much. Also we are paying a lot for insurance, landscaping..etc.
The board of directors did not want to approve the budget with the high numbers , but the hoa manager will not do a thing to shop for better rates .Instead he want to increase our hoa fees What will happen if the budget is not approved?Tahnks
GlenL (Ohio)
Posts: 5,491
Posted:
Mir your post is a little confusing, are you still under developer control or has it been transitioned to the homeowners?

But to answer your question under Davis-Stirling if the budget is not approved then fees cannot be raised.

Civil Code ยง1366. Duty to Assess, Limitations on Assessments.

(a) Except as provided in this section, the association shall levy regular and special assessments sufficient to perform its obligations under the governing documents and this title. However, annual increases in regular assessments for any fiscal year, as authorized by subdivision (b), shall not be imposed unless the board has complied with subdivision (a) of Section 1365 with respect to that fiscal year, or has obtained the approval of owners, constituting a quorum, casting a majority of the votes at a meeting or election of the association conducted in accordance with Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of the Corporations Code and Section 7613 of the Corporations Code. For the purposes of this section, "quorum" means more than 50 percent of the owners of an association.

(b) Notwithstanding more restrictive limitations placed on the board by the governing documents, the board of directors may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of owners, constituting a quorum, casting a majority of the votes at a meeting or election of the association conducted in accordance with Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of the Corporations Code and Section 7613 of the Corporations Code. For the purposes of this section, quorum means more than 50 percent of the owners of an association. This section does not limit assessment increases necessary for emergency situations. For purposes of this section, an emergency situation is any one of the following:

(1) An extraordinary expense required by an order of a court.

(2) An extraordinary expense necessary to repair or maintain the common interest development or any part of it for which the association is responsible where a threat to personal safety on the property is discovered.

(3) An extraordinary expense necessary to repair or maintain the common interest development or any part of it for which the association is responsible that could not have been reasonably foreseen by the board in preparing and distributing the pro forma operating budget under Section 1365. However, prior to the imposition or collection of an assessment under this subdivision, the board shall pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process, and the resolution shall be distributed to the members with the notice of assessment.

(c) Regular assessments imposed or collected to perform the obligations of an association under the governing documents or this title shall be exempt from execution by a judgment creditor of the association only to the extent necessary for the association to perform essential services, such as paying for utilities and insurance. In determining the appropriateness of an exemption, a court shall ensure that only essential services are protected under this subdivision. This exemption shall not apply to any consensual pledges, liens, or encumbrances that have been approved by the owners of an association, constituting a quorum, casting a majority of the votes at a meeting or election of the association, or to any state tax lien, or to any lien for labor or materials supplied to the common area.

(d) The association shall provide notice by first-class mail to the owners of the separate interests of any increase in the regular or special assessments of the association, not less than 30 nor more than 60 days prior to the increased assessment becoming due.

(e) Regular and special assessments levied pursuant to the governing documents are delinquent 15 days after they become due, unless the declaration provides a longer time period, in which case the longer time period shall apply. If an assessment is delinquent the association may recover all of the following:

(1) Reasonable costs incurred in collecting the delinquent assessment, including reasonable attorney's fees.

(2) A late charge not exceeding 10 percent of the delinquent assessment or ten dollars ($10), whichever is greater, unless the declaration specifies a late charge in a smaller amount, in which case any late charge imposed shall not exceed the amount specified in the declaration.

(3) Interest on all sums imposed in accordance with this section, including the delinquent assessments, reasonable fees and costs of collection, and reasonable attorney's fees, at an annual interest rate not to exceed 12 percent, commencing 30 days after the assessment becomes due, unless the declaration specifies the recovery of interest at a rate of a lesser amount, in which case the lesser rate of interest shall apply.

(f) Associations are hereby exempted from interest-rate limitations imposed by Article XV of the California Constitution, subject to the limitations of this section.


Studies show that 5 out of 4 people have problems with fractions
CarolR11 (Colorado)
Posts: 2,563
Posted:
Glen's question is important, Mir. Does the developer still control your HOA? Or do homeowners?

The PM must comply with the Board's directions. So if the Board instructs the PM to gather competitive bids, via Board vote at a duly noticed meeting, s/he must do so.

In what ways do folks think the new dues are too high? Examples? Might not be much wiggle room re: insurance.
MirS (California)
Posts: 2
Posted:
The homeowners are in control, but the developer hired the HOA management company.
ValorieL (California)
Posts: 2
Posted:
Hire a new management company. The majority of the board can make this decision. If the budget is not approved by the board, the dues remain the same until a new budget is adopted. Your CC&R's will state the minimum number of days (usually 30-45 dayss) notice that has to be provided to the homeowners before the new budget can go into effect.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Mir

I might not be so fast in firing the present management company. Take a hard look at the budget they used to arrive at dues. It could be the first time your association has been properly financed budgeted. Not uncommon for a developer/builder to hide expense items.

Yes the management company works for and can behired/fired by the BOD, but do not fire the messenger for the message.

๐ŸŽฏ You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • โœ“ Ask follow-up questions
  • โœ“ Share your experience
  • โœ“ Get expert advice
  • โœ“ Access 350,000 discussions
Create Free Account โ†’

โšก Takes 30 seconds

Already a member? Log in here