Increase of HOA Dues

Hi! I'm new to this website and a new Board Member. Per our Property Management Company, we are on the verge of bankruptcy. In a short meeting last night, we were basically "strong-armed" into increasing the dues 15% with the "threat" that we (the Board) can be sued for not increasing the dues? The Board Members were not given anytime to discuss/research this information or the amount of the increase. Has anyone ever experienced this? Thanks!

P.S. EMPLOYEES CAN be fired!!!!!!!!!!

Ontario? Is that a state now? In my state, Florida, any increase in dues over 10% requires a membership vote. So check your manual.

so I guess you don't have the 14 notice statute as we have in FL?

Kathleen,
First of all GREAT for getting on the board. I am also in Calif. and have been on a BOD for the last five years. Read, read, read all your documents. Next get a copy of the Davis-Sterling Act. It is the mandated Civil Codes that pertain to HOA's in the state of California.
When you bought into your property you should have recieved all the doc's CC&R, Articles of Incorporation, Bylaws and Rules.
Good Luck, Larry

KathleenR - DavidT1 is referring to the General Provisions of Florida Statute 720 specifically 720.306 as follows:

(5) NOTICE OF MEETINGS.--The bylaws shall provide for giving notice to members of all member meetings, and if they do not do so shall be deemed to provide the following: The association shall give all parcel owners and members actual notice of all membership meetings, which shall be mailed, delivered, or electronically transmitted to the members not less than 14 days prior to the meeting. Evidence of compliance with this 14-day notice shall be made by an affidavit executed by the person providing the notice and filed upon execution among the official records of the association. In addition to mailing, delivering, or electronically transmitting the notice of any meeting, the association may, by reasonable rule, adopt a procedure for conspicuously posting and repeatedly broadcasting the notice and the agenda on a closed-circuit cable television system serving the association. When broadcast notice is provided, the notice and agenda must be broadcast in a manner and for a sufficient continuous length of time so as to allow an average reader to observe the notice and read and comprehend the entire content of the notice and the agenda.

Kathleen:

Cutting through all the other stuff going on here, the answer to your questions is pretty simple and is located in your documents and state statutes. Our documents allow an increase of 20% of the dues without a membership vote, so that is the first step I would take is to read your documents. In your example above if it had been our association we simply would have needed a board vote to pass the 15% increase, however your threshold may be different.

What David and others are trying to say is that most states and HOA's require advance notice for a meeting where a membership vote is going to take place on things such as dues increases.

Unfortuntely they can't be sued for being inefficient. Many times boards raise fees because they don't know how to run the place efficiently, so you have a catch-22 almost. Incompetent management = higher fees.

Take everything you hear with a grain of salt and think about why someone would tell you something and what they have to gain from saying what they are. If the management company has gone through the budget by either running up a lot of incidentals or through their monthly fees they need more money.

This happened to us. We were running about $40 a month in Office Supplies and after a few months the new management company suddenly spiked them to to $150 a month. When asked for the details they ended up being things we couldn't possibly have incurred, like 160 proxy election forms for our 50 houses.

Sorry, you are not being strong-armed. Seems that your assessments have not keen reviewed. Are you aware of the following, taken from the Davis-Stirling Act -

1365. Unless the governing documents impose more stringent
standards, the association shall prepare and distribute to all of its
members the following documents:
(a) A pro forma operating budget, which shall include all of the
following:
(1) The estimated revenue and expenses on an accrual basis.
(2) A summary of the association's reserves based upon the most
recent review or study conducted pursuant to Section 1365.5, based
only on assets held in cash or cash equivalents, which shall be
printed in boldface type and include all of the following:
(A) The current estimated replacement cost, estimated remaining
life, and estimated useful life of each major component.
(B) As of the end of the fiscal year for which the study is
prepared:
(i) The current estimate of the amount of cash reserves necessary
to repair, replace, restore, or maintain the major components.
(ii) The current amount of accumulated cash reserves actually set
aside to repair, replace, restore, or maintain major components.

1365.5(e) At least once every three years, the board of directors shall
cause to be conducted a reasonably competent and diligent visual
inspection of the accessible areas of the major components that the
association is obligated to repair, replace, restore, or maintain as
part of a study of the reserve account requirements of the common
interest development, if the current replacement value of the major
components is equal to or greater than one-half of the gross budget
of the association, excluding the association's reserve account for
that period. The board shall review this study, or cause it to be
reviewed, annually and shall consider and implement necessary
adjustments to the board's analysis of the reserve account
requirements as a result of that review............

1366.(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.

KathleenR

DavidT1 doesn’t make a very good point that also holds true in my community, here in Georgia. Our governing document says we can raise the assessment up to 10% without an association vote. (Membership)

If one is fortunate enough not to have to raise the assessments that certainly would be nice. (cost of living alone)

DavidT1,
I’m not really sure what you meant by asking that question, sarcasm, I would assume!
I goggled Ontario, CA. http://www.ci.ontario.ca.us/
I too was thinking what you wrote, but I also figured I’d be sure of it before opening mouth insert foot.

Chuck W.