OVERCOMING BUDGETARY SHORTFALLS
By : Carrie N . Heieck , Esq .
2020 has strained the purse strings of homeowners ’ associations . When the pandemic hit in March , it forced associations into uncharted territory , which resulted in unanticipated legal fees to address a myriad of issues such as how to conduct meetings , enforce the governing documents , and maintain common areas during state-ordered shelter-in-place directives .
As restrictions lifted , were re-imposed , and continuously adjusted , associations needed advice from legal counsel to determine how to best navigate the fluid landscape of Covid-19 regulations . When the heat of summer arrived and quarantinefatigued residents demanded pool re-openings , Boards had to consider whether to adopt emergency rules to safely and legally reopen community facilities , again with the assistance of legal counsel . Covid-19 regulations also require increased cleaning and sanitation measures , amounting to more unanticipated costs .
The pandemic caused an unprecedented rise in unemployment and reduced incomes for millions of people , many of whom live in associations and pay assessments . Government programs that supplement unemployment benefits , provide stimulus checks , and issue emergency loans , only provide temporary relief . Many fear we are headed toward a crash similar to 2008 where associations faced a wave of delinquent assessments .
As 2020 nears its end , many California communities find themselves over budget . Pursuant to Civil Code § 5600 , directors have a duty to levy regular and special assessments sufficient to perform their obligations under the governing documents , which includes maintaining the common areas . Boards will need to evaluate how to best accomplish this task within budgetary constraints , focusing on safety as a first priority , and possibly putting off larger , non-urgent projects until the pandemic has subsided and the economy starts to recover . If the community facilities are too costly to safely remain open , boards may consider closing them or increasing assessments to offset the increased sanitation , cleaning , and monitoring costs if facilities are kept open .
14 | SAN DIEGO COMMUNITY INSIDER WINTER 2020