San Mateo, CA · Member since 2018 · 37 posts · 4 votes
Hi,
I live in a condo unit in San Mateo, CA county. The HOA is planning a special assessment of over 50K per unit for major repairs ( some of them cosmetic). The HOA decided to do a secret ballot voting and 25 out of 40 residents voted.
Out of the 25 votes, 13 agreed and 12 disagreed.
Now, based on the CCR and California Laws online that I read, it is said 50% quorum is needed to approve the assessment.
Does the above scenario constitute a approval?
Based on my understanding of quorum, atleast 21 residents with voting should have agreed.
It would be really helpful, if someone over here can point me in the correct direction.
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
8y
Look up California Civil Code 5605. It says, in part, “Notwithstanding more restrictive limitations placed on the board by the governing documents, the board 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 a majority of a quorum of members, pursuant to Section 4070, at a member meeting or election.”
It goes on to define a “quorum” as the following: “For the purposes of this section, ‘quorum’ means more than 50 percent of the members.”
To me, that means they need more than 50 percent of the total members to approve it, not just 50 percent of the members who voted. That being said, you should probably ask yourself whether these repairs are necessary before you fight them on it. Because if they’re needed (and you did refer to them as “major repairs”), you might be shooting yourself in the foot if the repairs don’t happen. But that’s another discussion.
To answer the question you asked though, it doesn’t sound like they have enough votes based on the information you posted.
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
8y
Hi Kyle,
Thanks for the answer. I concluded the same from the civil laws and HOA CCR.
The HOA has not described them as emergency repairs. I do agree that some of the work needs to be done, but they can split them over the years and not everything needs to be done at once.
Also, I am a bit skeptical with the amount they are quoting from the contractors. They also didn't approach a lot of contractors to get a good bidding for the work.
What do you think is the best way to communicate with the HOA, through lawyers, notices, etc.
What do you think is the best way to communicate with the HOA, through lawyers, notices, etc.
If it were me, I would communicate with them through written correspondence, pointing out the relevant law. Personally, I would not get a lawyer involved at this point, since the law on the matter seems pretty clear cut. However, if the HOA tries to continue with their special assessment despite you pointing out the law seemingly in contradiction to the manner in which it was approved, you may have to get a lawyer involved at some point.
However, our HOA is trying to use California Civil laws for voting and our CC&R which is old (1987 or something like that), states something different. The HOA has tried to amend the CC&R, but failed in the past.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
8y
I don’t see how you guys are coming to this conclusion:
Quorum means 50% of all members present....you had that.
“...a majority of the Quorum..” means just that.....more than 50% of the members Present, assuming they constitute a Quorum......Not a majority of all members including those not present.
Seems pretty clear me, the assessment passed properly.
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
8y
Hi Wayne,
That was also my conclusion unfortunately :( .
Also, as per HOA manager, 3 votes came in late in the mailbox, so they don't get counted.
I don't know how I should proceed with it, since 60K is a big amount.
I wish I could do something :( , as it might lead to bankruptcy and residents selling their homes. Also, note I recently became a board member, so I don't know if I can do something at my end.
Also, do you know how will the bank provide loan to the HOA. Will it require all the residents sign it?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
8y
@Kamal Sharma Well hopefully, with $2M of improvements repairs the units should see a significant increase in value. I assume much of this is needed, deferred work? I have no idea what banks look at or require when loaning money to an hoa.
Thanks for the answer. I concluded the same from the civil laws and HOA CCR.
The HOA has not described them as emergency repairs. I do agree that some of the work needs to be done, but they can split them over the years and not everything needs to be done at once.
Also, I am a bit skeptical with the amount they are quoting from the contractors. They also didn't approach a lot of contractors to get a good bidding for the work.
What do you think is the best way to communicate with the HOA, through lawyers, notices, etc.
If you're confident you can get a lower bid why not approach them with that. Something along the lines of I support your decision, but I'm able to provide a better value with....
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
8y
I tried to contact the HOA manager, and they are not even willing to consider new quotes. They are going ahead with the repairs and are just mentioning that everything is setup and are starting the loan process from the bank.
The 9 things you need know about HOAs are at the bottom of this article, save a lot of time on the front side bypassing intuitive info.
I live San Mateo now, but I am from Denver Colorado, and I am familiar with HOA issues. I, myself have owned 2 condos many years ago, I have walked away from many so called "good deals" because of HOAs. When considering buying a condo, always talk to the HOA manager to get the forecast info that the realtor did not tell you.
There used to be an attorney on KGO Radio named Lynn Tilum who knew a lot about HOAs, you might want to contact KGO online to see if they know how you can contact him.
Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes
8y
@Kamal Sharma you aren't going to like hearing this - but since you are on the board it is your chance to set things right in the future. The amount needed for repairs (whether necessary or cosmetic) is somewhat irrelevant. The fact that the HOA was not reserving funds for this type of thing IS relevant. No one likes to raise the dues... but if you have assets such as buildings, parks, etc. you need reserve assets for replacements and major repairs like a roof. As a board member you should do your homework about reserve asset studies and how to determine an appropriate assessment. That way "special" assessments become unnecessary. Here is a simple example: an HOA has 100 units. It needs $10,000 per year for regular monthly expenses. So each unit pays $100 per year for that. However, the HOA also owns a small clubhouse. The roof will last 30 years and is 15 years old. Therefore, in 15 years a new roof will be needed. A new roof today would cost $8000 - but in 15 years will cost $12000. Therefore the HOA needs to assess an additional $8 per unit per year to be reserved for a new roof. Wouldn't that have been nice? Now you figure out how often the building needs painted, and how long the furnace will last, when the carpet will need to be replaced, etc. etc. - so you add $5 here and $10 there and you come up with an appropriate amount. Now you are being a responsible board and proactively protecting the community for years to come and you don't have "emergency" $50K assessments burdening your owners.