HOA Assessment Fees FYI

A CID is descriptive not only of a certain type of real estate and form of home ownership, but also of a life-style that is becoming more and more common to the American way of life. To understand the concept, it is important to know that there is no one structural type, architectural style, or standard size for CIDs. They come in a variety of types and styles, such as single family detached houses, two story townhouses, garden style units with shared party walls, and apartment-like, multi-storied high rises.
Currently in California, there are tens of thousands of CIDs which range in size from a simple two unit development to a large complex having thousands of homes, many commonly owned facilities, and multiple associations under the auspices of one overall master association. However, despite the wide range of differences that may exist among CIDs, all CIDs are similar in that they allow individual owners the use of common property and facilities and provide for a system of self-governance through an association of the homeowners within the CID.
The most common type of association of homeowners is the nonprofit mutual benefit corporation. This is a corporation in which the members of the corporation vote for a board of directors which runs the affairs of the corporation. However, some associations, usually the older ones, are unincorporated associations. In many ways, unincorporated associations are treated the same as mutual benefit corporations under California law .Common interest development (CID) The info Below is old and should only used to read. Important:If you wish to research the subject matter further, you may wish to consult with an attorney or an industry professional experienced with CIDs.
The Department of Real Estate assist with the enforcement of the Bylaws and CC&Rs?
CIDs are subject to the Davis-Stirling Common Interest Development Act (California Civil Code Sections 1350 et seq.). This Act is intended to provide homeowners with a system of self-government and dispute resolution. The Department of Real Estate reviews the legal framework of all new CIDs to ensure compliance with the Subdivided Lands Law as part of the public report application process before homes are offered for sale to the public. Once sales have commenced, the Department's jurisdiction is limited to the subdivider's obligations under the public report, which does not include intervention in association disputes. Presently, there is no state or local agency that directly regulates associations or their members.
see HOA Homeowners Real Estate (6.)www.dre.ca.gov/pub_re39.html

Different types of HOA assessments or fees?
There are several types of assessments that may apply to your association. The California Civil Code defines assessments as either being regular or special. Regular assessments are needed for the operating (day-to-day) and reserve (long-term maintenance) activities of the association.
Special assessments are those levied by the association for major repairs, replacement, or new construction of the common area or for a one-time, unanticipated expense which cannot be covered by the regular assessment (e.g., insurance premiums that unexpectedly sky rocket).

Note, a special assessment should not be confused with a monetary penalty levied by the association against an individual owner to reimburse the association for an expense such as damage to the common area, or imposed as a disciplinary measure for a violation of the rules and regulations. Homeowners can be fined for damaging common areas and/or violating any rules and regulations of the association.(14)

Some CIDs establish user fees or special charges for services and activities that are not customary. Typically, these are imposed on an owner specifically benefiting from the service, such as an owner who wants to use the common area pool, clubhouse, or tennis courts to entertain private guests. The fees are usually on a pay-as-you-go basis and generally cannot become a lien on the owner's unit or interest.

There are other types of assessments that may be designated by the CID homeowners association. For example, an association may have an assessment for cable television service. A reimbursement assessment may be levied against an individual owner as a charge for damage to the common area resulting from an act by the owner or an owners guest.

Who can raise the amount of the assessment?
The board of directors can increase the amount of the assessment by following certain procedures mandated by California Civil Code Section 1366. Even if the governing documents are more restrictive, the board of directors may not increase the regular assessment more than 20 percent per year, without the approval of the owners. The board must circulate a budget to the membership no less than 45 days but no more than 60 days prior to the beginning of the fiscal year. If the budget indicates that an assessment increase greater than 20 percent is necessary, a majority of the members of the association must approve the assessment. There are also provisions for a board to increase an assessment more than 20 percent without member approval in cases of emergency such as an extraordinary expense required by order of a court, or for repairs to the common area.

What happens if you do not pay your assessments?
Usually, the association will send you a reminder letter as a first step.
The law is specific in California regarding the due date of assessments and the overall process that an association must follow regarding deliquent assessments.
The law states that if an assessment is not paid within 15 days of the due date, a delinquency occurs. At this point, the association can add a charge to your assessment in the form of a late fee in the amount of $10.00 or ten percent of the monthly assessment amount, whichever is greater, unless the CC&Rs specify a lesser amount.

Again, the law covering this area is quite clear and the board must follow these procedures.
Once a year, the association will send each owner a copy of the assessment collection policy, which will tell you the amount of the late fee. If your assessment becomes over 30 days delinquent the association has the right to assess interest up to 12 percent per year on the balance which is owed and unpaid.

If you still fail to pay your assessments, the matter may be referred to an attorney or forclosure service. The association has the right to lien your property for the amounts owed as well as other costs such as attorneys fees.Ultimately, the association can foreclose and take your property for you failure to pay assessments. A personal judgment may also be entered against you.
As you can see, it is imperative that all owners pay their assessments in a timely manner. Failure by several owners to pay their assessment obligation could place the association in financial jeopardy.(16) The best place to look for the different types of assessments that may apply to a CID is in the CC&Rs of the association.

Can owners rent to someone else?(21)
Some CIDs restrict the number of units that may be rented by owners. Some CC&Rs require that a rental agreement acknowledge that the tenancy is subject to all of the rules and regulations of the association. Some associations' rules and regulations also require that you provide the association with a copy of the rental agreement. In most associations, the CC&Rs state that the owner of the property being rented is responsible for the conduct of the tenant. Naturally, it is in the best interest of all parties to prevent problem situations between tenants and owners of other units. If your tenant does damage to the common area or creates a nuisance (e.g., loud music or pet problems), the disturbance could become your problem and the association may fine you.
What are your individual responsibilities as an owner living in a CID?
Primarily, you are responsible for paying your assessments on time and abiding by the CC&Rs and all other rules and regulations which exist for community harmony.(22)

What are your individual rights as an owner living in a CID?
Your individual rights as an owner living in a CID are based upon the laws of the state of California and the documents you signed at the time of purchase. Prior to making a purchase, it is advisable to thoroughly review the CC&Rs and any other governing documents applicable to the CID. You may also wish to attend a board meeting and obtain copies of minutes from previous board meetings. The CID should be able to demonstrate that it has adequate insurance coverage, a solvent budget and a sufficient reserve account.

Generally, the rights of owners include:
The right to participate in meetings of the board of directors and to be heard.
The right to enter into dialogue with your association board of directors with regard to any problem you may perceive in the development.
The right, with some exceptions, to utilize an alternative dispute resolution process, if a dispute arises between you and the association prior to the involvement of the court system.
A Look at Who Does What and When
MANAGEMENT
The management function of a community association is adminitrative in nature. The Board of Directors is the principal policy making body for the association. Their role is to govern by establishing policies, operational standards, procedures, fiscal policies and eventually the association's operation budget.
Implementing policy governance means the Board does not get involved in the day-to-day operations of the association. The role of the community management professional is to implement the policies and procedures established by the board.
There are various approaches to association management; including the use of unpaid volunteers, hiring association paid staff or utilizing a third party management firm, each of which has its pluses and minuses. Whatever the level of management services selected for the association, clearly defined tasks and responsibilities will contribute to the overall successful management of the association. Although the governing body of the association.
Administration and compliance program
The administration and compliance program encompasses all financial activities of a routine basis for any given fiscal year. They include day-to-day communication and problem solving with unit owners on common area issues and communication with subcontractors performing services for the association.Also included is record keeping for the association, the paper documentation required by law for compliance with state, federal and local regulations and requirements, as well as the attendance at the Board of Directors meetings and the annual meeting of the association members.• Coordination of alternative dispute resolutions litigation
• Minute taking and preparation of meetings of the as so -ciation
• Collection of delinquent accounts
• Property inspections
• Rules enforcement/proceedings
• Architectural processing and monitoring
• Attendance at association meetings beyond one per month
• Transfer of owner documentation
• Securing proposals for subcontractors work (particularly with reserve items)
see page19:401. www.dre.ca.gov/pdf_docs/OCM_final_2007.pdf



AB 2289 (Kehoe) — Common
Interest Developments (Chapter
1111)
AB 2289 makes numerous changes
to the procedures followed by
homeowners associations when a homeowner
is delinquent on fees and assessments.
These changes include a
waiting period prior to the notice of
recordation of a lien, a meeting by the
association.s board with the homeowner
to discuss the matter upon the
homeowner.s request, and additional
mandatory disclosures and notices
throughout the process. The bill also
limits the circumstances during which
an association may deny a homeowner
access to his or her property

AB 2546 (Nation) — Real Estate
Marketing: CIDs (Chapter 817)
This bill limits the requirements/
restrictions that a homeowners. association
(HOA) may place on an owner
seeking to market his or her interest in
a common interest development (CID).
In addition, this bill voids any rule or
regulation of an association that arbitrarily
or unreasonably restricts an
owner.s ability to market his or her
interest in a common interest development.
The California Association of
Realtors sponsored AB 2546.