Waiver of Assessments for Common Areas or Maintenance Areas

DRE Regulations allow for HOA assessments to be waived for HOA-maintained improvements that are not complete. Regulation 2792.16c, in a nutshell, allows a complete deferment of costs associated with improvements that are not being maintained by the HOA.  It’s actually illegal for the HOA to charge assessments for expenses that they do not incur.

IF the CCRs allow for this deferment of assessments, the HOA manager should be made aware of the provision.  For projects where construction of HOA-maintained improvements is phased or delayed, it can literally shave thousands of dollars in assessments.  This is particularly important to understand when the HOA maintains roofs and exteriors of attached dwellings where the buildings are not complete.

The regulation provides a list of examples but, for HOA management and oversight, the facts are simple:  any costs for maintenance and reserves associated with an improvement that is not complete are literally erased from the HOA budget.  Having these provisions in your CCRs up front can help you avoid having to re-phase your development when a market slowdown occurs.  If your CCRs don’t include the provision, then you should make sure it is included in any Annexation document!

For specific examples of how this provision can benefit you on a given project, please call us.  It is not unusual or unlikely to eliminate thousands of dollars each month from the budget – particularly when the buildings are maintained by the HOA.

Here is the hyperlink to the law.

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