HOA Special Assessments: Your Rights When the Board Wants More Money

The Hedge | Brutal Honesty Over Hype Since 2008

Special assessments — charges levied in addition to regular monthly dues to cover unexpected expenses or fund major projects — are one of the most contentious areas of HOA governance. California law imposes specific limits on boards’ authority to levy special assessments and gives members meaningful rights to review and challenge them. Understanding those rights before a special assessment hits your bank account is worth the preparation time.

The 5% Rule

California Civil Code Section 5605 limits a board’s authority to levy emergency special assessments without member approval. The board can impose a special assessment without a member vote only if the total assessment does not exceed 5% of the association’s budgeted gross expenses for the fiscal year. For an association with a $500,000 annual budget, this means the board can levy an emergency special assessment of up to $25,000 without member approval. Anything beyond that threshold requires a member vote — typically approval by a majority of a quorum.

The Notice and Meeting Requirements

Before levying any special assessment — even one within the 5% board authority — the board must hold an open meeting, provide written notice to all members before the meeting, and explain the basis for the assessment. Members have the right to attend and comment. A special assessment levied at a closed meeting or without proper notice is procedurally defective. Document whether proper notice was provided and whether the meeting was properly held — these are the factual bases for a challenge if you believe the assessment was improperly levied.

The Right to Petition for a Member Vote

When a board levies a special assessment that exceeds its unilateral authority, members can petition for a member vote to ratify or reject the assessment. California Civil Code provides specific procedures for member petitions. A special assessment rejected by a member vote cannot be collected. If your association has levied a large special assessment without a member vote, investigate whether the assessment exceeds the 5% board authority threshold — and if it does, the path to challenge it is a member petition for a ratification vote.

The Hedge has been cutting through financial and business noise since 2008. Brutal honesty over hype — always.