HOA Fees & Assessments FAQ

Special assessments are one-time or periodic charges levied by a homeowners association beyond regular monthly or annual dues to fund specific projects or unexpected expenses. Under California Civil Code Section 5605, HOAs can impose special assessments for capital improvements, emergency repairs, or reserve fund deficiencies. The Davis-Stirling Act requires specific procedures: for regular assessments, the board must provide 30-45 days written notice and hold a board meeting. For assessments exceeding 5% of the budgeted gross expenses, member approval may be required through a vote.

Emergency assessments for immediate health and safety issues may bypass some requirements under Section 5610. The assessment must be reasonably related to legitimate HOA purposes and applied uniformly to all units unless the CC&Rs specify different allocation formulas based on square footage, lot size, or other factors. Homeowners should review the association's governing documents to understand when and how special assessments can be levied. The board has a fiduciary duty to spend assessment funds only for authorized purposes and maintain proper financial records.

Yes, California HOAs can charge late fees, but they are strictly regulated under Civil Code Section 5650. Late fees must be reasonable and cannot exceed the association's actual costs of collection, with a maximum of $10 per violation or 10% of the delinquent assessment, whichever is greater. The HOA must provide at least 10 days written notice before imposing late fees. Interest charges are permitted but limited to 12% per annum under Section 5650(b). The association cannot charge both a late fee and interest on the same delinquent amount unless specifically authorized in the CC&Rs and reasonable.

Before imposing monetary penalties, the HOA must offer an internal dispute resolution process and provide notice of the owner's right to request a hearing. Fees must be itemized in writing, and the association cannot stack multiple late fees without proper notice for each assessment period. If you believe late fees are excessive or improperly imposed, you can challenge them through the HOA's internal dispute resolution procedure or, if necessary, through small claims court or civil litigation. Keep detailed payment records and copies of all notices received from the association.

An HOA lien is a legal claim against your property for unpaid assessments, fees, or fines. Under California Civil Code Sections 5650-5680, when assessments become delinquent, the HOA can record a lien against the property title. This lien attaches to the property, not the individual owner, and must be satisfied before the property can be sold or refinanced. The Davis-Stirling Act requires the HOA to follow strict pre-lien procedures: sending a pre-lien letter at least 30 days before recording, offering internal dispute resolution (IDR), and providing information about payment plans.

The lien amount can include the unpaid assessments, reasonable late charges, interest at up to 12% annually, attorney's fees, and collection costs. HOA liens have super-priority status for up to 12 months of unpaid assessments, meaning they can take precedence over even first mortgages in foreclosure situations. Once recorded, the lien remains on the property until paid in full or released by the association. The lien creates a cloud on the title that will appear in title searches and can prevent property transfers or refinancing until resolved.

Yes, California HOAs have the legal right to foreclose on properties with delinquent assessments under Civil Code Sections 5700-5720, but significant restrictions apply. The association must wait until the assessment is at least 12 months delinquent or the amount owed exceeds $1,800 before initiating foreclosure. The Davis-Stirling Act mandates pre-foreclosure requirements: the HOA must engage in internal dispute resolution, offer a payment plan meeting statutory requirements, and provide notice to the homeowner and any lenders with recorded interests.

Foreclosure can proceed through judicial (court-supervised) or non-judicial (trustee's sale) processes, though judicial foreclosure is more common for HOAs. Before foreclosure, the association must meet and confer with the homeowner or provide a declaration stating efforts were made. Homeowners have redemption rights and can stop foreclosure by paying the full amount owed plus costs. In practice, HOA foreclosures are relatively rare as associations typically prefer payment arrangements, and the process involves significant legal costs that may exceed the debt. If facing foreclosure, consult an attorney immediately to understand your rights and potential defenses.

Yes, California law provides homeowners with a right to request payment plans for delinquent assessments. Under Civil Code Section 5665, before recording a lien or initiating foreclosure, the HOA must offer a payment plan meeting specific criteria. The plan must allow payment of the delinquent assessment over at least 12 months (or longer if assessments accrued over more than 12 months). The association cannot require a payment plan term shorter than the period over which the assessments accrued. Homeowners must submit a written payment plan request, and the HOA must respond within specified timeframes.

The association can require reasonable terms such as timely payment of current assessments during the plan period and may charge reasonable interest on the outstanding balance. However, the HOA cannot condition the payment plan on waiving hearing rights or prohibit the owner from using internal dispute resolution. If the association denies a reasonable payment plan request without good cause, it may face challenges to subsequent collection actions. Payment plans must be documented in writing with clear terms regarding amounts, due dates, and consequences of default. This statutory right provides important protection for homeowners experiencing financial hardship.

When selling property subject to an HOA, unpaid assessments and liens must typically be satisfied at closing. Under California Civil Code Section 5650, HOA liens attach to the property itself, not the individual owner, meaning they transfer with the property if not paid. Most purchase agreements require sellers to pay off HOA debts as a condition of conveying clear title. The escrow company will request an HOA statement showing current assessments, any delinquencies, and pending charges. Buyers can be held liable for certain HOA debts under Section 5658 if proper procedures weren't followed, though purchase money lenders typically require lien clearance.

The Davis-Stirling Act requires HOAs to provide specific disclosures to prospective buyers, including current assessment amounts, special assessments, and the association's financial condition. Sellers must also disclose any violations or pending enforcement actions. If assessments remain unpaid, the HOA can pursue the new owner for amounts accruing after the sale date but generally cannot collect pre-sale amounts from buyers unless they contractually assumed those debts. Proper escrow procedures ensure assessment obligations are allocated fairly between seller and buyer based on the closing date.

California homeowners have several avenues to challenge improper HOA assessments. First, review the association's CC&Rs and bylaws to determine if the assessment complies with governing documents and Civil Code requirements. Under Section 5200-5235, request copies of the budget, reserve study, and board meeting minutes where the assessment was approved. The Davis-Stirling Act grants homeowners inspection rights to financial records within specified timeframes. If you identify procedural violations such as inadequate notice under Section 5300 or lack of required member approval for assessments exceeding statutory thresholds, document these deficiencies.

File a written dispute with the HOA board citing specific legal or procedural violations and requesting reconsideration. California Civil Code Section 5900 requires HOAs to offer internal dispute resolution (IDR) as an alternative to litigation for assessment disputes. Participate in IDR to potentially resolve the matter without legal costs. If informal resolution fails, you can file a small claims action for disputed amounts under the jurisdictional limit or pursue superior court action for larger amounts. Consider consulting an attorney specializing in HOA law to evaluate claims such as breach of fiduciary duty, violation of the Davis-Stirling Act, or improper assessment allocation. Keep detailed records of all communications and payment history.

Reserve assessments are funds collected specifically for major repairs and replacement of common area components, distinct from regular operating assessments that cover day-to-day expenses. Under California Civil Code Sections 5550-5580, the Davis-Stirling Act requires HOAs to conduct reserve studies at least every three years, identifying major components with useful lives and remaining lifespans. Regular assessments cover ongoing costs like landscaping, utilities, insurance, and management fees. Reserve assessments fund future capital expenditures such as roof replacement, repaving, or infrastructure upgrades.

California law mandates minimum reserve funding levels based on the reserve study, though associations can adopt higher thresholds. Section 5570 requires separate accounting for reserve funds, which cannot be used for operating expenses without member approval. If reserves are underfunded, the HOA may impose special assessments to replenish them or increase regular reserve contributions. The annual budget must disclose reserve funding status and percentage funded. Homeowners should review reserve studies to understand long-term financial health; chronically underfunded reserves often lead to emergency special assessments. Board members have fiduciary duties under Section 5350 to maintain adequate reserves, and failure to do so may constitute breach of duty.

California HOAs have limited authority to increase regular assessments without member approval, governed by Civil Code Section 5605. Generally, the board can increase regular assessments up to 20% above the previous year's assessment without a membership vote. Any increase exceeding 20% requires approval by a majority of the members or as specified in the CC&Rs. For special assessments, different thresholds apply: assessments up to 5% of budgeted gross expenses can typically be levied by board action alone, while those exceeding 5% require member approval through a noticed vote.

Emergency assessments for immediate repair needs affecting health, safety, or property preservation may bypass normal approval requirements under Section 5610, but the board must document the emergency justification. The Davis-Stirling Act requires 30-45 days advance written notice before implementing any assessment increase, along with distribution of the annual budget and pro forma operating budget. Notice must explain the purpose of increased assessments and provide members opportunity to comment at a board meeting. CC&Rs may impose stricter limits on the board's assessment authority. Homeowners can challenge excessive increases by reviewing budget justifications, questioning expense projections, and potentially seeking court intervention for assessments that violate governing documents or constitute abuse of discretion.

California homeowners facing HOA collection actions have substantial procedural rights under the Davis-Stirling Act. Civil Code Section 5730 prohibits HOAs from suspending common area rights or imposing monetary penalties without providing notice and opportunity for hearing before the board. Before recording a lien for delinquent assessments, the association must comply with Section 5660 pre-lien requirements: sending notice at least 30 days prior, itemizing all charges including assessments, fees, interest, and costs, and offering internal dispute resolution. You have the right to dispute assessment validity or amounts through IDR under Section 5900, which is typically less expensive than litigation.

During collection proceedings, request detailed accounting of all charges to verify accuracy and compliance with Section 5650 limits on late fees and interest. The HOA cannot report delinquencies to credit bureaus without following specific notice procedures. If the association violates collection statutes, you may have defenses to enforcement actions and potential counterclaims. Consider asserting any payment plans you requested, compliance with payment obligations, or procedural violations as defenses. Document all payments made and communications with the association. Consult an attorney before allowing default judgments or foreclosure proceedings, as you may have valid defenses or negotiation leverage. California law favors resolution through IDR and payment arrangements over aggressive collection tactics.