We have received many questions from SAMLARC Members regarding reducing or deferring assessments and deferring collection of assessments during the COVID-19 period. The following opinion is that of many association legal experts.
Each association is a not for profit corporation governed by governing documents (articles of incorporation, CC&Rs, bylaws, and rules adopted by the Board of Directors). These documents create legal duties and obligations on the association for the preservation and protection of property values, and health and welfare of the members. To meet these duties and obligations, the Board adopts an annual budget. The expenses to be paid by the association are determined in large measure in non-discretionary costs. These include the costs for insurance, management, professional services, maintenance, repair and replacement of assets and amenities. The federal government, and the Governor of California have recognized that the functions and services provided by the association are essential services. The association must continue to pay those costs despite the economic burdens resulting to homeowners resulting from COVID-19. By purchasing property subject to the CC&Rs, homeowners agree to pay all assessments.
Although there is compassion for those who have been financially impacted as a result of COVID-19, the association is not the type of entity to render financial assistance. It is not a for-profit lender, financial institution or government agency, nor does it receive government subsidies or guarantees to serve as a source of credit.