Legal Question in Real Estate Law in California

Condominium Special Assessment

I live in a 12-unit condominium complex and each homeowner recently received a twelve thousand dollar ($12,000.00) special assessment for a new roof on the building.

In reviewing the current financial statements, it appears that a portion of the assessment money for the roof is being used for other purposes. For example, prior to the assessment, the operating account had a balance of approximately $9,000.00. After the assessment and reflected on the current financial statements, is a disbursement for legal fees in the amount of approximately $24,000.00 in addition to disbursements for the usual monthly operating expenses. It would appear that the most of the funds used to pay these particular disbursements are attributable to the assessment monies.

Can you tell me if there are any laws or regulations which prohibit levying a special assessment for one purpose and then using the funds for another? Finally, what are penalties and remedies, IF ANY?


Asked on 1/04/06, 10:51 pm

3 Answers from Attorneys
H.M. Torrey The Law Offices of H.M. Torrey

Re: Condominium Special Assessment

In a nutshell, you are describing an intentional fraud claim, which is actionable with both compensatory and punitive damages being proper remedies. If you would like a free phone consultation, contact us directly.

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Answered on 1/04/06, 11:42 pm
Carl Starrett Law Offices of Carl H. Starrett II

Re: Condominium Special Assessment

It is impossible to tell from the facts presented whether anything improper has occurred. A proper answer to your question would require a review of the governing documents for the HOA (CC&Rs and Bylaws), documents using in voting on the special assessment and a complete picture of the financial status of the HOA.

The HOA could have borrowed from reserves to pay the legal fees. Or the legal fees might be related to construction defect litigation for a defective roofing system. Without more fact, any answer provided here borders on speculation.

If you want a consultation with an attorney experienced in HOA law, feel free to give me a call.

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Answered on 1/05/06, 1:28 am
Philip Iadevaia Law Offices of Philip A. Iadevaia

Re: Condominium Special Assessment

The California Civil Code has extensive law governing common interest developments such as condo complexes. The governing documents of the HOA must comply with the civil code. Special assessments of the kind levied on your unit must ruled on by the Board, and you may dispute them or even call for a vote to have the monies apportioned appropriately. You should consult a lawyer for the possibility of representing the dissenting owners against the Board. Good luck.

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Answered on 1/05/06, 1:54 pm


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