Legal Question in Credit and Debt Law in California
I own a condominium that's part of a "Cohousing". All the 7 owners are part of the board and we have an extremely casual system to deal with our shared finances (mainly our Home Owners Dues). I have been an owner since 2003, I have been faithfully paying my HOA dues, but I was just informed a few months ago, that my dues were increased in 2006. My fellow owner who is the elected treasurer, failed to inform me of the increase and didn't notice that I had been continuing to pay the previous amount for the past 4 years. I am told that I owe $2080.00 to correct this mistake. One other owner is in the same position and owes $4k. Other owners knew their correct monthly dues but have been delinquent due to "financial hardship". Now, the seven of us have been meeting to decide how to fix this and balance our budget (which is missing $36k). I don't want to pay my missing $2k because I am convinced that this was not my fault, but the fault of our treasurer. Other owners (board members) are voting that we need to forget that there was a mistake and that we need to ALL pay our past dues (again, two of us owe because of negligence on someone else's part, and the remaining five owe because of negligence on their part). I'd like to make a legal case stating that I do not owe $2080.00 since I was never notified of the dues increase. Please help me.
1 Answer from Attorneys
I'm slightly confused. You indicate that all seven owners have been participating in the management of the association. If that is the case, how did you not know that you owed dues? Pressumably, an increase in the dues was voted upon by the members of the Board of Directors, of which you are one? Further, your financial statements should have reflected a growing "assessments collectible" account which a reasonably prudent member of the Board of Directors would have questioned. It is easy to say that your treasurer didn't notify you of the increase, but you probably had what is referred to as inquiry notice as to the increased dues - I'm not sure you will get out of paying the arrears by claiming ignorance of the increase.
Irrespective, if you and any of the other owners back out of paying past-due HOA dues, the board can simply levy a special assessment against all owners to get the budget back in the black. The net effect is the same - you're going to have to pay, along with the other six owners, to bring the budget back to where it should be. I'm not sure where you expect that money will come from if you and the other owners do not pay it - you are the only seven people who support the operation of your project, and if you do not pay, then something will have to give, and generally that means either a special assessment or a reduction in services provided by the Association (i.e., stop landscapers, maintenance, etc...).
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