The Vote Threshold for an Assessment Outside the Budget
A board can set the annual budget, but it cannot raise money without limit. Most statutes cap how far regular assessments may rise and how large a special assessment may be before the members themselves must vote, with one narrow exception for genuine emergencies.
The rule in short
Statutes commonly limit a board to a stated percentage increase in regular assessments and to special assessments aggregating no more than a stated percentage of budgeted gross expenses in a fiscal year, unless the members approve. Approval is usually by a majority of a quorum voting by secret ballot. An emergency exception permits assessments beyond the cap for court-ordered expenses, threats to health or safety, and unforeseeable extraordinary expenses supported by a written board resolution.
Boards are elected to run a budget, not to write blank checks. The line between those two things is drawn by percentage. Most statutes let a board raise regular assessments by up to a stated share of the prior year and levy special assessments up to a stated share of the annual budget, and require the members to vote on anything larger.
Two caps, and how they are measured
A representative statute provides that, notwithstanding more restrictive limits in the governing documents, the board may not impose a regular assessment more than twenty percent greater than the regular assessment for the preceding fiscal year, or impose special assessments which in the aggregate exceed five percent of the budgeted gross expenses of the association for that fiscal year, without the approval of a majority of a quorum of members.
Two features of that sentence are often missed. The special assessment cap is an aggregate for the fiscal year, so a board cannot avoid it by splitting one project into three smaller levies. And the caps operate notwithstanding stricter provisions in the governing documents, which means the statute sets the ceiling while the documents can still set a lower one.
The same statute conditions even a within-cap increase on the board having complied with its budget distribution duties for the year. A board that failed to distribute the required annual budget report on time can lose the ability to raise assessments at all without a vote, which is a far more common failure than exceeding a percentage.
What member approval actually requires
Approval is not a show of hands at a meeting. Where an assessment legally requires a vote, balloting statutes generally require a secret ballot conducted under the same procedures used for director elections: written notice a set period before ballots are distributed, a ballot that states the proposed action, a return deadline, an independent inspector of elections, and a public count.
The threshold is usually a majority of a quorum rather than a majority of all members, with quorum defined by the documents or by statute. Getting the arithmetic right in advance matters, because an assessment approved by the wrong measure is vulnerable even if the spending was obviously needed.
Ballot mechanics follow the general election rules described in the article on board elections, quorums and proxies, including the limits on proxies and the handling of ballots after the count.
Boards reach for the emergency exception when the vote looks unwinnable. Statutes define it narrowly: an extraordinary expense required by court order, an extraordinary expense necessary to repair or maintain the property where a threat to personal health or safety or another hazardous condition is discovered, or an extraordinary expense that could not reasonably have been foreseen when the budget was prepared. The third category requires the board to adopt a written resolution containing findings on why the expense was necessary and why it was not foreseeable, and to distribute that resolution to the members with the assessment notice.
| Situation | Board acting alone | Member approval needed | Documentation |
|---|---|---|---|
| Regular increase within the percentage cap | Yes | No | Timely budget report distribution |
| Regular increase above the cap | No | Yes | Secret ballot under the election rules |
| Special assessments aggregating under the cap | Yes | No | Notice of the assessment |
| Special assessments aggregating above the cap | No | Yes | Secret ballot under the election rules |
| Emergency assessment for an unforeseen expense | Yes | No | Written resolution with findings, distributed to members |
Allocation is fixed by the documents, not by the board
Once an assessment is validly levied, the amount each owner pays is determined by the allocation in the declaration rather than by any judgment about who benefits. A condominium that allocates common expenses by percentage interest charges the largest units the most, even for a repair to a building only the smaller units occupy.
Boards sometimes try to charge a project only to the owners who use the improved element. That is lawful only where the declaration authorizes a limited common element assessment or a benefited-area assessment. Absent such a provision, an attempt to split the cost unevenly is an amendment to the allocation, and most statutes require the consent of every affected owner for that.
Statutes also cap the amount itself. A common provision requires an association to levy assessments sufficient to perform its obligations while prohibiting it from imposing or collecting an assessment or fee that exceeds the amount necessary to defray the costs for which it is levied. A special assessment padded with a contingency well beyond the project estimate can be attacked on that basis alone.
Why deferred maintenance is not an emergency
The most litigated word in the emergency provision is foreseen. A roof reaching the end of a documented service life is not unforeseeable; the reserve study identified it years earlier. A board that let reserves run down and then declares an emergency when the roof fails is claiming that its own inaction created the exception.
Courts and owners look at the reserve study for exactly this reason. If the component appears in the study with a remaining useful life that has expired, the finding of unforeseeability is very hard to defend. The mechanics of that document are covered in the article on reading a reserve study.
The safer route for a board is transparency early. Presenting the reserve shortfall with the budget, showing what a gradual increase would cost against what a later special assessment would cost, and putting the question to members before the component fails converts an unwinnable emergency argument into an ordinary vote.
Where a challenge succeeds
Challenges rarely turn on whether the spending was wise. Statutes give boards substantial latitude on that question, and directors making a considered decision are protected by the standard described in the article on the standard a volunteer board is held to.
They turn instead on process: whether the percentage was exceeded, whether a vote was required and held, whether notice and ballot rules were followed, whether the emergency resolution was adopted and distributed, and whether the assessment exceeds the amount necessary to defray the costs for which it was levied. That last limit is statutory in several states and is the one boards forget when they add a cushion to a special assessment.
The documents an owner needs to test any of this are the budget report, the meeting minutes, the resolution and the ballot records, all of which are ordinarily obtainable under the rules described in the article on inspecting association records and what may be withheld.
Points to carry away
- A board may raise regular assessments only up to the statutory percentage without a member vote.
- Special assessments aggregating more than the statutory percentage of budgeted gross expenses require member approval.
- Approval is usually by a majority of a quorum, cast by secret ballot under the election procedures.
- The emergency exception covers court orders, health and safety threats and genuinely unforeseeable expenses.
- An emergency assessment requires a written board resolution with findings, distributed with the assessment notice.
Questions readers ask
Does a member vote require a majority of all owners?
Usually not. Most statutes require approval by a majority of a quorum rather than a majority of all members, and the quorum for that purpose is defined by statute or by the governing documents. That distinction is decisive in communities where turnout is low. It also means a small, motivated group can approve a large assessment for everyone, which is one reason challenges tend to focus on whether notice and ballot procedures were followed rather than on the merits of the spending.
What can an owner do about an assessment already levied?
The first step is a written demand identifying the specific procedural failure: the percentage exceeded, the vote not held, the notice not given, the emergency resolution not adopted or not distributed. Many statutes then require internal dispute resolution or mediation before suit. Paying under protest is generally wiser than withholding, because non-payment triggers late fees, interest and lien procedures that continue whether or not the underlying challenge is sound.
Can the board borrow instead of assessing?
Often yes, and it is a common way to fund a large project without a single painful assessment. Borrowing authority normally comes from the declaration or the bylaws, and many statutes require member approval to borrow or to pledge future assessment income as collateral. The loan is repaid out of assessments, so the money still comes from owners; what changes is the timing and the fact that owners who sell before repayment ends leave the balance behind.
Sources
- California Civil Code § 5605 — Limits on assessment increasesThe percentage caps on regular increases and aggregate special assessments absent member approval.
- California Civil Code § 5610 — Emergency situationsThe three categories of emergency and the written resolution required for an unforeseen expense.
- California Civil Code § 5600 — Levy of assessmentsThe duty to levy enough to meet obligations and the bar on collecting more than the cost being defrayed.
- California Civil Code § 5100 — Balloting requirementsSecret ballot procedures for elections regarding assessments legally requiring a vote.
- Virginia Code § 55.1-1825 — Authority to levy additional assessments; authority to borrowA statutory grant of additional assessment and borrowing authority subject to the declaration.
- Florida Statutes § 720.303 — Association powers and duties; budgetsBudget adoption and the fiduciary duties that attach to the officers and directors who prepare it.
Metro Law Advisors is a publication, not a law firm. This article states general rules and cites its sources; it is not advice about any particular case, and the law differs by state and changes over time.
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