repairs and landscape irrigation changes above budget

Our HOA did not budget wisely to include some much needed irrigation changes and repairs, also some structure damages due to a lot of extra moisture. The irrigation oversprays etc. are another problem. How can we get more money into the operating budget now, not next year?

You can increase your HOA dues mid-year. The total increase for any given year cannot exceed 20% of what the prior year dues were.

The 20% total is discussed in our state law. I read on one of the legal sites that I check is that it doesn't have to be done all at the beginning of the year. I'm sorry that I don't remember which site although I think it was Davis-Stirling. Of course, the poster should check their governing documents to see what they say.

Mary, I found it. It was a Davis-Stirling newsletter. These are their words, not mine.

QUESTION: Is it legal for a board to produce an amended budget if they find 6 months into their year that they are not able to operate within the approved budget?

ANSWER: There are three options for funding a mid-year unbudgeted expense. They are as follows:

1. A special assessment (i) imposed by the board of 5% or less or (ii) approved by the membership if more than
5%.

2. Borrowing from the reserves, provided proper notice is given and a repayment plan adopted.

3. A mid-year increase in membership dues. Since the most common surprise mid-year expense is a large increase in insurance premiums, this particular expense is one that would carry into future budgets, thereby justifying a mid-year increase in the regular dues.

Mid-Year Increase. Mid-year dues increases are not addressed in the Davis-Stirling Act. However, the Act does require that associations levy regular assessments sufficient to perform their obligations under the governing documents. Civil Code 1366(a) Accordingly, I believe boards can revise the budget, provided (i) the original budget was properly implemented, (ii) boards stay within their 20% increase limitation, and (iii) they give a minimum 30-days notice of the change.

20% Limitation. To stay within the 20% limitation, boards must take into account any increase that occurred at the beginning of the fiscal year. For example, if there was a 5% increase at the beginning of the fiscal year, the board's mid-year increase is limited to 15%.

I have not polled other law firms to see where they stand on mid-year increases, so there may be some disagreement on this issue.

Mary
I agree with you. It is just one attorney's opinion. No homeowner wants to be surprised with an increase in their assessments midyear. I don't know what the OP's documents say. I do know that the BOD can approve an emergency special assessment without membership approval, but it better be a real emergency as defined by Davis-Stirling and the HOA governing documents.

Mary
I have a good friend that lived in an older large condo association. She was continually hit with special assessments for 5K and 10K a year. Their BOD needed to replace rotting wood siding. That should have been in their reserves as it is clearly a visible component, not some hidden component that suddenly failed. She did not get an opportunity to vote for the special assessment. Her BOD, called it an emergency. To me, that definitely is not an emergency. I would have found a different company to do the reserve study and I certainly would have wanted a new BOD. Anyway, she has moved.

My advice to anyone before moving into a condo is to see what they have in reserves and inspection of major things like roof, plumbing, etc. I moved into a very small co-op in South Florida and the same month got an invoice for $650 due to an increase in storm insurance. When I looked into things (too late) I learned there were many plumbing problems about to come up since the building was 50 years old and then next to come would be the roof and exterior painting. I served as secretary and found in all the fifty years not one cent was put into a reserve account and even though they bragged they had no increased assessments in X number of years we raised the assessments 3 times in the two years I lived there and this was only to cover ongoing costs. I too live on a fixed income so sold after two years and I was fortunate to do so because the locality was in high demand. It's BUYER BEWARE and even though I had years of business experience I let my emotions rule since I had a dog of about 70 pounds and it was the only place that would accept him. They made an exception for my dog and it ended up with everyone loving him so I guess it wasn't all bad.