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Emergency Assessments


Emergency Assessments

Even well funded homeowners associations can find themselves facing an emergency. 

What defines an emergency assessment, and what are the qualifications that must be met in order to force owners to pay last minute and sometimes hefty contributions?

In basic terms, if the board of directors and management could not have reasonably foreseen or anticipated something, then the membership could potentially be forced to pay for it. 

Moreover, if a situation involving a life-safety threat presents itself, the the board may be able to impose an assessment to correct the situation. 

These are very broad definitions, and H.O.A. management/self-managed boards are strongly encouraged to seek written legal advise prior to making a final decision.  

Recently the insurance premium for an association we manage increased, and through our inquiries as to why we discovered that because the deductible was so low, homeowners were approaching the carrier directly to file liability claims of paramount proportions. That coupled with a significant water damage claim was enough to cause the carrier not to renew the association’s master insurance policy. Seeking out new insurance proved to be a very time consuming and ultimately expensive task. Not only was the renewal premium considerably higher than what was budgeted, but the new policy required a significant down payment (which was not required by the expiring carrier) along with nine monthly installments rather than 12. 

This posed a significant and unexpected financial strain on the association, and could not have been anticipated when we developed the current budget this past year. As a result, and according to the association’s attorney, this qualified as an emergency and the association was able to collect the much needed funds to bind a new policy with plenty of time to avoid any lapse in coverage. 

In another case, we were well underway with a major rennovation project when the contractor uncovered a load bearing exterior wall to be unstable. Although the project was well funded with a healthy contingency budget, this was well beyond anything that could have been anticipated. More importantly though, it presented a life safety threat that clearly could not be ignored. With a written opinion from a structural engineer and the attorney’s blessing, we were able to raise the funds needed to swiftly correct the situation. 

For more information about emergency assessments, or assistance with any other H.O.A. related matter, please contact Jean-Paul Vines: or (818) 883-6607 ext. 235

Posted by Jean-Paul Vines  Posted on 11 Jun 
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