Community Insider Fall 2017 - Page 39

assessments. Boards should consult with management and other professionals (e.g., accountant, CPA, legal counsel) to determine how the emergency assessment should be imposed. Be sure to check the governing documents to see how the rate of assessments is imposed on the owners. Sometimes the governing documents require that special assessments for repairs to the common area are to be imposed on a square foot basis, rather than an equal basis. If that is the case, then an emergency special assessment will need to be imposed in the same manner. The rate of the assessment (equal vs. variable) may also affect the board’s decision on which type of assessment to use. Can the Association Use Reserve Funds? If the monies to be raised by the emergency assessment are for items that are contemplated under the reserve study, then the reserve funds can be used to pay for the repairs, especially if payment needs to be made to contractors sooner than the emergency assessment will be collected. If the monies do not pertain to reserve fund items, then any use of reserve funds could be considered a temporary transfer under Civil Code Section 5515. Be sure to consult with legal counsel as to whether the expenditure is considered a temporary transfer of reserve monies and, if so, there are specific legal requirements that need to be followed. becoming due. If the emergency assessment was imposed under the third situation above, then the notice to the owners must include a copy of the resolution passed by the board. Hopefully your association will never have to impose an emergency assessment. However, if you find yourself in that situation, understanding the legal requirements is essential. If the emergency assessment is for an expense ordered by a court, that may qualify as an executive session matter, under “litigation.” 1 Prior Notice to the Owners After the board determines to impose an emergency assessment, Civil Code Section 5615 requires that owners be provided with “individual notice” of the emergency assessment no less than 30 days and not more than 60 days prior to the assessment Laurie S. Poole, Esq., CCAL has been an attorney with Peters & Freedman, L.L.P. since 1993. Peters & Freedman, L.L.P. has offices in Encinitas, Palm Desert, and Orange County. Ms. Poole can be reached at Lpoole@hoalaw.com or (760) 436-3441. take that to the bank. Brendan Concannon Regional Account Executive 619-961-6346 Toll Free 866-800-4656, ext. 7480 brendan.concannon@mutualofomahabank.com mutualofomahabank.com AFN45863_0813 Member FDIC Equal Housing Lender