Regardless of what restrictions may be contained in the association’s governing documents, the board may not without membership approval “impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year.” (Civ. Code § 5605(b); See also “Limitations on Assessment Increases.”)
However, Civil Code Section 5605 does not limit assessment increases “necessary for emergency situations,” where “emergency situations” include any one of the following:
- Court Order – An extraordinary expense required by an order of a court; (Civ. Code § 5610(a).)
- Safety Threat – An extraordinary expense necessary to repair or maintain the development or any part of it for which the association is responsible where a threat to personal safety on the property is discovered; (Civ. Code § 5610(b).)
- Unforeseen Expense – An extraordinary expense necessary to repair or maintain the development or any part of it for which the association is responsible, where such expense “could not have been reasonably foreseen by the board in preparing and distributing the annual budget report under Section 5300.” (Civ. Code § 5610(c).)
Unforeseen Expense; Resolution Requirement
Where a board seeks to impose an emergency assessment for an unforeseen extraordinary expense pursuant to Civil Code Section 5610(c), the board must first “pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process.” (Civ. Code § 5610(c).) The resolution must be distributed to the members with the notice of assessment required by Civil Code Section 5615. (Civ. Code § 5610(c).)
