FOR BOARD CONSIDERATION BY: MR. CALVIN ROSE, ESQ., BEAUMONT TASHJIAN
TEMPORARILY RELAXING ASSOCIATION COLLECTION POLICIES AS A RESULT OF THE COVID-19 PANDEMIC
W
ith the spotlight shining brightly on the coronavirus (COVID-19) pandemic, association boards should be prepared to navigate some of the complicated issues it has created, particularly in regard to assessment collections. As we know, Governor Gavin Newsom has proclaimed a State of Emergency to exist in California as a result of the threat of the pandemic. What is more, he issued Executive Order N-33-20, ordering all residents, unless exempted, to stay at home. He also issued Executive Order N-28-20, which effectively suspended actions by a housing provider which would eject a person from their home (i.e., foreclosures).
Many Californians, including the members of over 45,000 homeowner associations in the state, are experiencing, or will experience, substantial losses of income as a result of business closures, the loss of hours or wages and layoffs arising from the COVID-19 pandemic. Members of associations experiencing substantial losses of income may be unable to meet their current financial obligations, including the payment of assessments.
With that said, community associations, through their boards of directors, are charged with the fiduciary duty to operate and manage community association affairs, including managing and maintaining the common areas. This also includes, among other things, enforcing the provisions in the CC&Rs, and any related collection policies, that speak to the timely payment of assessments, and the implications for not doing so.
Assessments are literally the lifeblood of associations. Without assessments, essential expenses and services to members, including, but not limited to, insurance, trash removal, maintenance of common areas, such as walkways/sidewalks, driveways, roads, landscaping, pools, structures, etc., cannot be funded.
In order to strike a reasonable balance between the needs of members experiencing substantial losses of income as a result of the pandemic, and the fiduciary obligations for boards to exercise (among other things) prudent fiscal management, boards may consider temporarily relaxing their collection policies. For example, boards
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CONNECT MAGAZINE • ISSUE TWO 2020
