Take care to learn about common interest community costs

Homeowners associations and condominium communities are popular choices for many residents of California. People who are considering buying into one of these common interest community options should become fully informed about the special features of this type of housing, which may involve periodic substantial increases in costs.

Satisfied residents

Residents in common interest communities were recently surveyed by the Foundation for Community Association Research (FCAR) to determine their satisfaction levels. Overall, the responses were positive, with 70 percent of those surveyed saying they were satisfied with their experience and 22 percent stating that they were neutral about it. Only eight percent said they were dissatisfied.

These communities are governed by association boards comprised largely or entirely of owners and residents of the homes in the community. Only about one eighth of the residents surveyed declined to respond positively when asked if their board tried to serve the community’s best interests.

Similarly, about three-fourths of the survey respondents believed that professional managers were valuable to the community, and about the same proportion said that the community association rules enhanced and protected property values.

Assessments

One area in the FCAR survey where some dissent might have been expected was the matter of assessments, the fees and dues that are charged to members of common interest communities. Dues, or regular assessments, pay for upkeep of common areas, including recreational spaces and possibly utility lines. They also cover management costs. These assessments are paid on a regular schedule, perhaps monthly or annually. Community boards are allowed under California law to increase regular assessments by up to 20 percent each year.

Owners of units in common interest communities can also be charged for special assessments. All members of the community could be assessed for a share of the cost of an extraordinary project, like repairs to a condominium building roof damaged by extreme weather. While boards should keep a reserve on hand to cover such unexpected expenses, they do not always have enough set aside.

In California, it is estimated that these communities are taking in annual assessments totaling about $200 million. The accumulated money sitting in common interest community coffers totals some $8 billion.

As it turned out, the FCAR survey found that about eight in 10 residents believed they got a good return for money paid for association assessments. This is a nationwide survey result, and there is no clear answer as to how many California common-interest community residents feel satisfied with assessments.

Association conflicts

Homeowners in a common interest community could get involved in disputes with the governing board. They might fail to pay assessments for a variety of reasons, including inability to pay. California law gives association boards some methods to compel members to pay assessments. A board can take a community association homeowner to small claims court, foreclose the property or place a lien on the property.

New owners who have recently paid a large down payment to buy a home are especially vulnerable when regular assessments go up or large special assessments are imposed. Owners of condominiums and other common interest properties may need the help of an attorney to protect their rights when disputes arise over assessments, community rules or other issues that come up in these housing communities.