Here is a question from an owner about variable assessments that has a twist to it.

“Hi, we are 3 owners in our building and we all have same amount of living square footage except that [1 Unit] has a very large terrace/exclusive use common area, and the other unit above me has Exclusive use of a 1400 sq ft roof top deck with a Jacuzzi. I am in the middle. After 20 years of being owners together I was questioned to why I pay $30.00 less HOA dues than [the other two owners]. I simply answered without really knowing the laws that it was logical seeing that they both have extra surface. Plus our insurance covers (includes Earthquake) the Exclusive use common area when there is a big repair needed. Unfortunately there is nowhere mentioned in our CC&Rs and we now are wondering what the law says in this incident.”

You are on the right track to look to the association CC&Rs to define responsibility and I am not in favor of ignoring them. If they provide for equal assessments then I believe some correction may be in order – and recommend getting legal advice. An amendment to the CC&Rs approved by all 3 members could fix  things to a logical conclusion and save all of these owners from legal disputes in the future involving “mucho” legal fees. Chances are that if the CC&Rs do not define variable assessments they also may fail to give the owners above and below exclusive use of the terrace and roof deck.

It would not make sense to charge all 3 units the same assessment unless there was provision also stating that the owners on top and bottom had more responsibility, such as full responsibility to maintain, repair and replace the improvements in these respective areas. If the owners do have these extra responsibilities under the CC&Rs then maybe equal assessments are more appropriate. But the point about insurance coverage is well made –if the protection provides more benefit for the Units above and below in the event of a claim, then variable $30 cost might be justified.

I suggest the owners get legal advice on what is the best, most fair, and logical thing to do here. A review of the association governing documents might reveal that is already the case. If not, there is a fix available in an amendment to the documents.

If all agree to go on with the current scheme and it is not consistent with the CC&Rs, then it may work for awhile but at some point someone may challenge the “system” that has been adopted by the owners and there may be legal repercussions and/or legal fees involved.  That is a risk to all 3 owners.

  • Share/Bookmark

Sorry, comments are closed for this post.