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CALIFORNIA CIVIL CODE
DUES - ASSESSMENTS
§ 1366. Levy of Assessments-Purposes-Delinquency
(a) Except as provided in this section, the
association shall levy regular and special assessments sufficient
to perform its obligations under the governing documents and
this title. However, annual increases in regular assessments
for any fiscal year, as authorized by subdivision (b), shall
not be imposed unless the board has complied with subdivision
(a) of Section 1365 with respect to that fiscal year, or has
obtained the approval of owners, constituting a quorum, casting
a majority of the votes at a meeting or election of the association
conducted in accordance with Chapter 5 (commencing with Section
75 1 0) of Part 3 of Division 2 of Title I of the Corporations
Code and Section 7613 of the Corporations Code. For the purposes
of this section, "quorum" means more than 50 percent
of the owners of an association,
(b) Notwithstanding more restrictive limitations
placed on the board by the governing documents, the board
of directors may not impose a regular assessment that is more
than 20 percent greater than the regular assessment for the
association's preceding fiscal year or impose special assessments
which in the aggregate exceed 5 percent of the budgeted gross
expenses of the association for that fiscal year without the
approval of owners, constituting a quorum, casting a majority
of the votes at a meeting or election of the association conducted
in accordance with Chapter 5 (commencing with Section 75 1
0) of Part 3 of Division 2 of Title I of the Corporations
Code and Section 7613 of the Corporations Code. For the purposes
of this section, quorum means more than 50 percent of the
owners of an association. This section does not limit assessment
increases necessary for emergency situations. For purposes
of this section, an emergency situation is any one of the
following:
(1) An extraordinary expense required by an
order of a court.
(2) An extraordinary expense necessary to repair
or maintain the common interest development or any part of
it for which the association is responsible where a threat
to personal safety on the property is discovered.
(3) An extraordinary expense necessary to repair
or maintain the common interest development or any part of
it for which the association is responsible that could not
have been reasonably foreseen by the board in preparing and
distributing the pro forma operating budget under Section
1365. However, prior to the imposition or collection of an
assessment under this subdivision, the board shall pass a
resolution containing written findings as to the necessity
of the extraordinary expense involved and why the expense
was not or could not have been reasonably foreseen in the
budgeting process, and the resolution shall be distributed
to the members with the notice of assessment.
(4) An extraordinary expense in making the first
payment of the earthquake insurance surcharge pursuant to
Section 5003 of the Insurance Code.
(c) The association shall provide notice by
first-class mail to the owners of the separate interests of
any increase in the regular or special assessments of the
association, not less than 30 nor more than 60 days prior
to the increased assessment becoming due.
(d) Regular and special assessments levied pursuant
to the governing documents are delinquent 15 days after they
become due. If an assessment is delinquent the association
may recover all of the following: (1) Reasonable costs incurred
in collecting the delinquent assessment, including reasonable
attorney's fees. (2) A late charge not exceeding 10 percent
of the delinquent assessment or ten dollars ($ 10), whichever
is greater, unless the declaration specifies a late charge
in a smaller amount, in which case any late charge imposed
shall not exceed the amount specified in the declaration.
(3) Interest on all sums imposed in accordance with this section,
including the delinquent assessment, reasonable costs of collection,
and late charges, at an annual percentage rate not to exceed
12 percent interest, commencing 30 days after the assessment
becomes due.
(e) Associations are hereby exempted from interest-rate
limitations imposed by Article XV of the California Constitution,
subject to the limitations of this section.
§ 1366.1. Excessive Fees Not Permissible
An association shall not impose or collect an
assessment or fee that exceeds the amount necessary to defray
the costs for which it is levied.
§ 1367. Assessment Is Debt of Owner-Lien
against Interest
(a) A regular or special assessment and any
late charges, reasonable costs of collection, and interest,
as assessed in accordance with Section 1366, shall be a debt
of the owner of the separate interest at the time the assessment
or other sums are levied.
(b) The amount of the assessment, plus any costs
of collection, late charges, and interest assessed in accordance
with Section 1366, shall be a lien on the owner's interest
in the common interest development from and after the time
the association causes to be recorded with the county recorder
of the county in which the separate interest is located, a
notice of delinquent assessment, which shall state the amount
of the assessment and other sums imposed in accordance with
Section 1366, a description of the owner's interest in the
common interest development against which the assessment and
other sums are levied, the name of the record owner of the
owner's interest in the common interest development against
which the lien is imposed, and, in order for the lien to be
enforced by nonjudicial foreclosure as provided in subdivision
(d) the name and address of the trustee authorized by the
association to enforce the lien by sale. The notice of delinquent
assessment shall be signed by the person designated in the
declaration or by the association for that purpose, or if
no one is designated, by the president of the association.
Upon payment of the sums specified in the notice of delinquent
assessment, the association shall cause to be recorded a further
notice stating the satisfaction and release of the lien thereof.
(c) A lien created pursuant to subdivision (b)
shall be prior to all other liens recorded subsequent to the
notice of assessment, except that the declaration may provide
for the subordination thereof to any other liens and encumbrances.
(d) A lien created pursuant to subdivision (b)
may be enforced in any manner permitted by law, including
sale by the court, sale by the trustee designated in the notice
of delinquent assessment, or sale by a trustee substituted
pursuant to Section 2934a. Any sale by the trustee shall be
conducted in accordance with the provisions of Sections 2924,
2924b, and 2924c applicable to the exercise of powers of sale
in mortgages and deeds of trust.
(e) Nothing in this section or in subdivision
(a) of Section 726 of the Code of Civil Procedure prohibits
actions against the owner of a separate interest to recover
sums for which a lien is created pursuant to this section
or prohibits an association from taking a deed in lieu of
foreclosure.
(f) This section only applies to liens recorded
on or after January 1, 1986
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