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Legalease
Legalease, Lawyer
Category: Legal
Satisfied Customers: 16288
Experience:  15 years exp all aspects of general law
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Our HOA is short on funds and the CC&R's state: "if annual

Customer Question

Hi, Our HOA is short on funds and the CC&R's state: "if annual assessments are not increased by the maximum amount permitted (10% per year) the maximum increase permitted for that year shall be computed and the annual assessments may be increased by that amount in a future year" . The assessments have not been raised in ten years or so, my question is does the computing allow 10% for each year that it was not raised or would it only allow for one year to be added to the 10% max? Thanks Ron
JA: Because real estate law varies from place to place, can you tell me what state the association is in?
Customer: north carolina, we can't find any state cap
JA: Have you talked to a lawyer yet?
Customer: one and he thinks that there would be no cap, thou some board members want it to be onlt multiplied for one year
JA: Anything else you think the lawyer should know?
Customer: not that i can think of
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Lawyer about your situation and then connect you two.
Submitted: 5 months ago.
Category: Legal
Expert:  Legalease replied 5 months ago.

Hello there --

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There are no state minimums or maximums on raising assessment charges in any manner -- because your HOA has been given the power to organize and vote on its own governance, the Board of Directors can make the ultimate decision regarding the yearly amount to raise it and the overall amount to raise it. The only thing they must do is follow the written directive in the CC&R as you set it forth above. The way I am reading that language, the Board can compute the amount that has been due in any or all of the past ten years and add it to the current amount -- and there is no cap under state law so your HOA can increase the amount by what it should have been increased over the past 10 years (if it had been done at the 10 percent rate each year). However, the Board also has the power to vote in something less than the full 10 years increases in one year if they want to work it that way as well (so they might want to work out something where the assessments are raised incrementally over the next couple of years to meet the amount that it should have been if it had been raised during the prior 10+ years). Again, it is completely up to the Board, but they must have a majority vote and they should put the new assessment and manner of calculating it into the CC&R s as an amendment.

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MARY