What is the name of your state (only U.S. law)? California
The Board of Directors in my HOA decided to sue another party and to assess each unit $500 to pay for this lawsuit. A few weeks later, the Board President sends an email out indicating that he (not the Board) erred and the assessment can't exceed 5% of the gross operating budgeted expenses for the year without approval of owners constituting a quorum. Hence, they lowered the assessment amount to exactly 5% of the gross operating budgeted expenses for the year, which is $198.81. However, one can reasonably assume that $198.81 will be insufficient to cover expenses relating to this lawsuit and there will in all likelihood need to be future $198.81 assessments to cover ongoing and future expenses. In my opinion, reducing the amount from $500 to $198.81 with the strong possibility of future special assessments for the same lawsuit violates the spirit of the 5% special assessment rule. No homeowner vote or even a survey was taken on the
reduced assessment amount. "Getting around" the 5% rule requiring a quorum of the owners by reducing the assessment amount into smaller parts seems a little unethical. Does this Board action violate any California statute?
The Board of Directors in my HOA decided to sue another party and to assess each unit $500 to pay for this lawsuit. A few weeks later, the Board President sends an email out indicating that he (not the Board) erred and the assessment can't exceed 5% of the gross operating budgeted expenses for the year without approval of owners constituting a quorum. Hence, they lowered the assessment amount to exactly 5% of the gross operating budgeted expenses for the year, which is $198.81. However, one can reasonably assume that $198.81 will be insufficient to cover expenses relating to this lawsuit and there will in all likelihood need to be future $198.81 assessments to cover ongoing and future expenses. In my opinion, reducing the amount from $500 to $198.81 with the strong possibility of future special assessments for the same lawsuit violates the spirit of the 5% special assessment rule. No homeowner vote or even a survey was taken on the
reduced assessment amount. "Getting around" the 5% rule requiring a quorum of the owners by reducing the assessment amount into smaller parts seems a little unethical. Does this Board action violate any California statute?