HOA dues increase, special assessment, and another special fee

Started by TomP11 • 7 replies • 279 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

TomP11 (California)
Posts: 113

Posted:

So, my HOA is going to increase monthly dues mid cycle by 20% aka in 2 month. We had monthly dues increased already by 20% this fiscal year already for 2024. I am not sure they are allowed to do this. I read and the management company said that the max they can increase is 20% a year. Is it calendar year of fiscal year because our fiscal year starts in December when our last increase happened? They also said they are going to increase it another 20% in December. Three 20% increases in 12 months.

In addition they want to do a special assignment which will be over 5% and another special assessment this year as well by July.

Are they allowed to do all of this. I am in California.

TerriS6 (California)
Posts: 3,284

Posted:

Max 20% one fiscal year for regular assessment. Max 5% one fiscal year for special assessment. Otherwise need member election to approve.

TomP11 (California)
Posts: 113

Posted:

So does the 20% increase from 2023 fiscal year to 2024 fiscal year count?

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By TomP11 on 03/15/2024 11:08 AM
So does the 20% increase from 2023 fiscal year to 2024 fiscal year count?

Not sure what you mean. When does your fiscal year begin? Did you read all the requirements in Civil Code sec 5605? Board has to send budget report at least 30 days prior to assessments being due. It has to send policy statements 30 days prior. It has to send notice of increase 30 days prior. Otherwise it can't raise assessments at all without a member vote.

TomP11 (California)
Posts: 113

Posted:

The fiscal year begins in December. That is when the monthly dues increased from $500 to $600. Now they want to increase it again by 20% in May 2024.

November is when they send the budget for the coming up fiscal year and we get to see where all the money is going.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By TomP11 on 03/15/2024 11:27 AM
The fiscal year begins in December. That is when the monthly dues increased from $500 to $600. Now they want to increase it again by 20% in May 2024.

November is when they send the budget for the coming up fiscal year and we get to see where all the money is going.

They will need a member election. If they have not started the election process by now, I doubt they will make May. The 20% applies to one fiscal year.

TomP11 (California)
Posts: 113

Posted:

Thank you for the information. The HOA board voted on it last night. I guess I will have to bring it up with them.

KerryL1 (California)
Posts: 14,550

Posted:

With Terri, the Board may not raise assessments more than 20% in a FISCAL year (12/23-12-24) without Owners voting to approve.

AND the election must abide by the state-required Election Rules that CA HOAs must have. Yours are probably updated in 2021 or 2022. Does your HOA have a website where they're posted? As Terri notes, it takes a long time to get an election ready for secret ballot & votes, etc.

Similarly, the Board may not impose a special assessment that exceeds 5% in a fiscal year* (unless in a strictly defined "emergency.")

Did the manager not speak up at the open board meeting last night since they gave you correct info? Do you recall the exact words of the Board's motion & approval to do all of this??? Put otherwise, was there a motion, etc. to add two more special assessments? And then a spare motion to "amend" the budget. You may have access to the "draft" minutes of that meeting 30 after it. You need to make your request in writing to your manager.

You were. required to have rec'd a Budget & Reserves letter and Policy Statements lonnng document by 10/31/23 that informed all Owners of the Board-approved increases for 12/23-12/24. If misplaced, get a copy from your manager. It states the budget for 23/24. The original 20% AND the. 5% spec. Assess. increase must be in the "Budget letter."

There's a web site about Calif. HOAs compiled by a huge CA HOA law firm. It's very y useful with a fine Index. But look up https://www.davis-stirling.com/HOME/U/Unexpected-Expense#axzz3hxJrmRrD. Or go to Davis-stirling.com, Index, and look up budget or assessments for much more info.

* Forget the planned increase for NEXT fiscal year 12/24-12/25. Stick with the current one.

🎯 You've read this entire discussion

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

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here