Overview

Imagine the shock of opening a notice from your HOA telling you that you owe a special assessment of $26,000. Or $49,000. Your first payment is due in 30 days, and it doesn’t matter whether you write one check, split it into two payments, or tack an extra $2,000 onto your regular dues every month for the next several months. Nobody asked whether you have the money. And if you’re retired, or living on a fixed income, or you wouldn’t qualify for a refinance, then none of the choices your HOA gave you is really a choice.

Most homeowners who get one of these notices land in the same place. They decide they aren’t paying a dime until somebody explains how an HOA runs up a shortfall this big without years of serious negligence, or fiduciary breaches, or worse. That reaction makes sense. Acting on that instinct, however, could cost you your home. The Davis-Stirling Act doesn’t let homeowners withhold assessments, and it doesn’t care whether the assessment was legal, justified, necessary, or fair.

So let me be honest with you about what the law does and doesn’t give you here. You can ask your HOA board to work with you on options regarding payment of the special assessment, and the Davis-Stirling Act does force your HOA to meet with you and hear you out at certain points. But nobody has to say yes. If your HOA follows the Davis-Stirling Act’s requirements related to imposing a special assessment, and plenty of them do (even the bad HOAs who don’t want to shed light on how things got as bad as they did), then the payment options in that notice are the payment options you’ll have to choose from regardless of whether any of them are realistic options for you.

A special assessment in the tens of thousands of dollars almost always arises as the direct result of massive negligence, fiduciary breaches, or even more serious wrongdoing by an HOA board over a long period of time. Prior directors deferred maintenance year after year, held dues down to keep the members quiet, disregarded their own reserve studies, and never scheduled the inspections California law required. Homeowners had no hand in any of it. Your HOA and the directors who ran it created the shortfall, and California law lets homeowners hold both of them responsible for it.

This Fact Sheet explains what to do when your HOA imposes a massive special assessment that you can’t (and shouldn’t have to) afford, what your HOA can do to you while you sort it out, and how to figure out whether your own HOA board or individual directors are the reason for the special assessment. This Fact Sheet also explains why homeowners in your position are far more dangerous to a bad HOA when they stop fighting alone and start working together, and where the money to make them whole usually comes from.

[If you’re facing something like this, you’re not alone, and it’s worth seeing how other California homeowners are handling it. ABC7 Eyewitness News in Los Angeles ran two “7 On Your Side Investigates” reports on it recently, one on a San Clemente HOA that hit its members with $26,000 each and a follow-up on a Torrance HOA that recently hit its members with more than $49,000 each. I was interviewed for both, along with the homeowners fighting back in those communities. Check those stories out.]

Key Points

A special assessment that you can’t afford to absorb presents two separate problems for homeowners, and you have to handle them in the right order. The first problem is the money itself, which means understanding what your HOA can force you to do, and how long you have before the collection process starts. The second problem relates to how the assessment came to exist at all, which is where homeowners facing enormous special assessments have real power. The points below cover both, and they explain why the homeowners who get the best results are the ones who protect their homes first and then go after the HOA and the directors responsible for the shortfall.

• Pay the special assessment even if you’re certain your HOA had no right to impose it. The Davis-Stirling Act gives homeowners no right to withhold an assessment, and it makes no exception for an assessment your HOA imposed illegally. You owe the money on the date it comes due whether the assessment was lawful or not. Homeowners who stop paying to make a point end up fighting two battles at once, and the collection battle is the one they lose. Assessments go delinquent 15 days after the due date, and from there your HOA can add late charges, interest up to 12% a year, collection costs, and its own attorneys’ fees, then record a lien and start a foreclosure. Partial payments won’t stop any of that either because your HOA can proceed against you as long as any part of the assessment remains unpaid. So find a way to pay the assessment in full, and put your money and your energy into teaming up with fellow homeowners to go after your HOA instead. [For an explanation of why withholding payment is not a viable option for you, read my Fact Sheet, “Can You Stop Paying Disputed HOA Dues in California?”]
  • Paying the special assessment does not waive any of your rights to later challenge the legality of the assessment. Many homeowners worry that paying for a special assessment that they believe is illegal or unfair amounts to agreeing that the assessment was legal or fair. It doesn’t. When you pay, you waive nothing. No magic words are required, and you don’t have to write anything in the memo line of your check or send a letter along with it. Paying protects your home while you go after your HOA over the assessment itself and over the conduct that made it necessary.
• Your HOA has to give you at least 30 days before you have to pay any portion of a special assessment. Civil Code 5615 requires your HOA to deliver individual notice of any increase in regular or special assessments not less than 30 and not more than 60 days before the increased assessment becomes due. That window is the only planning time the Davis-Stirling Act guarantees you, and it isn’t much. So if you intend on challenging the legality of the special assessment, or the prior board conduct that made it necessary, make use of that limited time by talking to a qualified homeowner-side HOA attorney (like the ones at my firm, MBK Chapman) before the due date rather than after. [To learn more about the grounds available to homeowners challenging a special assessment, read my Fact Sheet, “California HOA Special Assessments: What They Are, When They’re Legal, and How Homeowners Can Challenge Them.”]
• Unfortunately, under the present Davis-Stirling Act, you don’t have much recourse if the payment options offered by the HOA don’t work for you. Many HOAs typically offer homeowners facing a significant special assessment a few options to pay the assessment (e.g., in a lump sum, two or three installments, or a temporary increase added to their monthly dues). Those terms come from their HOAs, and not from any statute. HOAs can, therefore, set them however they like, and they can refuse to change them. No provision of the Davis-Stirling Act requires HOAs to accommodate homeowners who can’t meet the schedule in the notice, and no provision creates a hardship exemption based on a homeowner’s age, income, or inability to borrow.
• Homeowners who can’t (or don’t) pay a special assessment will go delinquent, and the Davis-Stirling Act sets out what happens next. Before an HOA can record a lien, Civil Code 5660 requires it to send the homeowner a notice by certified mail at least 30 days in advance, along with an itemized statement breaking down the delinquent assessments, late charges, interest, collection costs, and attorneys’ fees the HOA says it’s owed. That notice is what triggers the one real payment right in the Davis-Stirling Act. Civil Code 5665 lets a homeowner mail a written request for a meeting to discuss a payment plan, and if that request goes out within 15 days of the postmark on the notice, the HOA board has to meet with the homeowner in executive session within 45 days. Late charges stop running while a homeowner complies with a plan the HOA board agrees to. But you should understand the limits before counting on them. HOA boards don’t have to agree to anything, and a payment plan won’t stop an HOA from recording a lien to secure the debt (although it will prevent an actual foreclosure). [To learn more about the steps an HOA has to take before it can record a lien or foreclose on your home, and for what to do when that happens, read my Fact Sheet, “Can My California HOA Foreclose on My Home for Unpaid Dues?”]
• Many massive special assessments are legitimately necessary. Roofs and balconies that went 20 years without proper maintenance and repairs eventually have to be replaced. And the Davis-Stirling Act obligates HOAs to keep the common area in working order regardless of what earlier HOA boards failed to do. So a special assessment isn’t illegal just because the number is enormous, and the work behind it usually can’t wait. Current directors are often the ones who discovered what earlier HOA boards had buried, and they’re taking the blame for a shortfall they didn’t create by telling the members the truth about what the repairs cost. Homeowners should aim at the directors who caused the damage over the preceding years rather than at the ones now stuck fixing it. This doesn’t mean that homeowners don’t have a viable claim against their HOA. In fact, as I stated earlier, they often do because these massive special assessments almost always stem directly from prior malfeasance and negligence on the part of prior boards. But it does mean that homeowners should be thoughtful about where they aim their wrath.
• Pull your HOA’s records to find out how the shortfall happened. Civil Code 5200 entitles homeowners to inspect and copy a long list of HOA records, and Civil Code 5210 sets the deadlines, which run 10 business days for records from the current fiscal year and 30 calendar days for records from the prior two fiscal years. Minutes get separate treatment under Civil Code 5210 because they remain subject to inspection permanently, and that matters here since the decisions behind the shortfall may go back a decade or more. Ask in writing for the reserve studies, the annual budget reports, the Civil Code 5551 balcony inspection reports, the board minutes and executive session minutes, the general ledger, the check registers, and the invoices and contractor proposals tied to the deferred work. Read the budget reports first, because Civil Code 5300 requires each annual budget report to state whether the HOA board decided to defer repairs or replacement of any major component with 30 years or less of remaining life, along with a written justification for that decision. Those disclosures, sitting in your HOA’s own reports year after year, are how homeowners prove what earlier HOA boards knew and what they chose to do about it.
• Massive special assessments usually mean prior HOA boards breached their fiduciary and contractual duties. Corporations Code 7231 requires directors to act in good faith, in a manner they believe serves the HOA’s best interests, and with the care an ordinarily prudent person would use in the same position, including reasonable inquiry. Civil Code 4775 makes HOAs responsible for repairing, replacing, and maintaining the common area, and Civil Code 5550 requires a visual inspection and reserve study every three years, along with an annual review and the adjustments that review calls for. HOA boards that ignored their obligations to maintain or repair large common area components, or that ignored reserve studies telling them a roof had five years left, kept dues flat to avoid a fight with the members, and pushed the repairs onto whoever owned the units when the roof finally failed, exercised none of that care. So homeowners facing an assessment built out of years of deferrals and failures likely have an excellent claim against their HOA for breaching the CC&Rs and the Davis-Stirling Act. [In some circumstances, liability may also rest with individual directors.] And because a lawsuit of this nature directly addresses an HOA’s failure to abide by its duty to maintain the common areas, Civil Code 5975 entitles homeowners who prevail to their attorneys’ fees and costs.
  • In many cases, insurance money will be available to satisfy these claims. HOAs carry insurance covering the acts and omissions of their directors and officers, and Civil Code 5800 requires that coverage in a minimum amount of $500,000 for HOAs with 100 or fewer separate interests and $1 million for HOAs with more than 100, though most HOAs carry considerably more. So the practical question in these cases usually isn’t whether anybody can pay a judgment. It’s whether the claim gets framed in a way that triggers the coverage, which is one more reason to get an experienced homeowner-side HOA attorney involved early.
• Homeowners facing a massive special assessment should get organized with their neighbors. Massive special assessments like the ones reported in the news segments mentioned above affect all the homeowners in the community (each of whom will have the same claims). One homeowner suing alone ends up responsible for paying the whole cost of the case and gives the HOA an easy target to isolate. A group of homeowners splitting the costs makes challenging the special assessment much more affordable, and brings much more pressure to bear on the HOA.
• Here’s what homeowners should do the week that a massive special assessment notice arrives. Confirm the due date and the amount, and read the notice for what your HOA says the money is for. Send a written records demand under Civil Code 5200 the same week, because the 10-day and 30-day clocks in Civil Code 5210 don’t start running until your HOA receives it. Put every communication with your HOA and its manager in writing, and keep the responses. Line up the money, whether that means a loan, a refinance, a line of credit, or family, and start those conversations immediately because approvals take weeks. Talk to your neighbors, especially those who tend to attend meetings, because some of them might have insight as to what earlier boards did or didn’t do.
• If your HOA hit you with a massive special assessment, call the HOA attorneys at MBK Chapman immediately. The HOA attorneys at MBK Chapman are considered by HOA insiders to be the very best in California. We’re experts at pulling records, finding out what earlier HOA boards knew and when they knew it, and telling you whether the assessment itself is vulnerable to attack. Just be sure to call us before the due date passes, while you still have every option in front of you.

A special assessment in the tens of thousands of dollars is one of the worst things that can happen to a California homeowner. Do not let it turn into a collection file with your home attached to it. Pay what your HOA demands, hold onto every document that comes your way, and then turn your attention to the years of decisions that created the need for the special assessment. The reserve studies, the budget reports, and the minutes are sitting in your HOA’s files right now. Most of the time, they tell you exactly who should be answering for this.

FAQs

About Michael Kushner

Michael Kushner is a California attorney with over 30 years of experience representing homeowners in disputes with their HOAs. He is widely regarded as California’s leading homeowner-side HOA attorney, and has built one of the state’s most prominent law practices dedicated to holding HOAs accountable under the Davis-Stirling Act and California law.

In addition to his law firm’s work, Michael is a recognized lecturer, author, and the host of the hit HOA HELL podcast, where he provides homeowners living in HOA-governed communities with clear, practical strategies for dealing with bad HOAs. He’s also the author of the best-selling book, HOA HELL | California Homeowners’ Definitive Guide to Beating Bad HOAs, which has become a go-to resource for both homeowners seeking real-world solutions to their HOA disputes, as well as those good HOA board members who are interested in doing a good job.

About MBK Chapman Fact Sheets

Homeowners searching for answers online will often come across articles that appear authoritative, but are actually written as search-engine marketing content rather than by an experienced HOA lawyer. These pieces tend to prioritize keyword density over clarity, accuracy, or legal context, which often leaves homeowners more confused than informed.

At MBK Chapman, our Fact Sheets are part of our HOA Law Library and are written by Michael Kushner, an HOA lawyer with decades of hands-on experience representing California homeowners. In fact, Michael Kushner is the HOA lawyer who pioneered the systems and strategies used by some of California’s most successful homeowner-side HOA law firms.

Each Fact Sheet is deliberately concise, statute-based, and designed as a quick-reference guide to help homeowners understand key HOA laws and enforcement rules at a glance.

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