Emergency Assessments – Suprising simplicity BUT significant risk.

This week, I communicated with a community association board that is ready to impose an emergency assessment upon their membership.

We discussed the fact that imposing emergency assessments is very easy! All you need to do is have your board approve the emergency assessment and properly notice it to the association membership. It’s all very enticing since, no matter what amount, it does not require membership approval!

BUT… while IMPOSING it is easy, defending it (legally AND politically) can be very challenging! The simple fact is that emergency assessments carry a high probability of legal challenge (usually, when the association attempts to legally enforce it against a member that refuses or is unable to pay it) and carry a high probability of political upheaval within the community (think board removal petitions, hate mail, and “spirited” discourse at the next few board meetings).

Consequently, the imposition of an emergency assessment should not be taken lightly even if it is of a relatively small amount.

Two CRITICAL steps to reduce the risk and to position the association to best defend itself are as follows:

1) Make sure you have an “emergency situation” as defined by Civil Code 5610 AND make sure you have documentation that clearly proves it!.

In a nutshell, CC 5610 that an “emergency situation” is extraordinary expense that is:

a) Required by a court,
b) Necessary to address a threat to personal safety; or,
c) Necessary to conduct repair/maintenance that was unforeseen at the time of the last annual budget (this tends to be the most dangerous of the criteria, and it requires additional and differing board resolutions).

2) Make sure that its legal justification and practical importance are effectively “sold” to the membership!

Clear and detailed messaging (preferably before the emergency assessment is actually imposed), is VERY important to minimize the political and potential legal blowback! This messaging can include mailings, postings, discussions at board meetings and potentially even town hall meeting(s).

The requirements/criteria for emergency assessments are paraphrased above. To see the full details/requirements of emergency assessments (and other types of community association assessments), download the following document from our resource center.

Dirk Petchul
Whitney | Petchul
22342-A Avenida Empresa, Suite 100
Rancho Santa Margarita, California 92688
Phone: (949) 766-4700 Fax: (949) 766-4712
E-mail: [email protected]