Should Families Pay More?

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Q: Our 80-unit complex once was adults-only, but now allows families with children. This has increased our community’s population and, in turn, our maintenance needs and monthly assessments (now $225 per unit). The assessments pay for water, trash, sewers, cable TV, insurance, two pools, spa management, painting, and other common area care. Thirty-five of our units are occupied by single persons–most of whom are seniors on fixed incomes. We think it is unfair for them to pay these costs. Can we change the assessment to a one-resident base rate, with an extra charge for each additional person living in a unit?–Camarillo, California

A: Meeting the needs and interests of different groups within a community is a challenge, especially when financial matters are concerned. Like local, state, and federal governments, community associations struggle when an aging population and fixed incomes collide with economic needs.

ASSESSMENT AUTHORITY
Charging assessments based on the number of people in a unit creates some legal hurdles as well. The authority for assessing and collecting association fees is found in your state’s enabling statutes and the association’s governing documents. The enabling statutes provide the basic framework for determining the fees and expenses payable by owners within the community. For example, the Uniform Condominium Act requires that the declaration specify each unit’s interest in the common elements. By statute, that percentage is used to determine the assessments payable by that unit.  Enabling statutes generally do not allow common expense assessments to be based on the number of residents in a unit. Most association documents contain similar language. You should examine your own governing statutes and documents–it is unlikely, however, that your association has the legal authority to adopt the user-oriented assessment system you suggest.

ARE THERE ALTERNATIVES?
There may be other ways to provide relief for residents on fixed incomes. First, consider “unbundling” some of the services your association provides. Depending on the community’s physical requirements–its existing wiring, for example–you could discontinue the cable service and allow each owner to decide whether to spend money on cable-TV. See if other services can be separated, allowing those who want them to pay for them independent of the association fees. Also, if your documents allow it, consider user fees for some of the amenities. Your community has two pools and a spa. Can you separate them from the other common expenses, and charge either daily use or membership fees? A number of factors will affect your determination, in particular the requirements of your documents. Can the costs of operating and maintaining those facilities be met in this fashion? What will the financial effect be on the actual users?  These are important questions, because user fees can be as problematic as higher assessments for families. User fees are attractive because they seem to make those who use a facility responsible for its costs. Yet amenities can make the community special–they have an indirect benefit for every owner, even those who don’t swim in the pool or sit in the spa. As with most association issues, your analysis must start with your governing documents. Analyze them carefully with your attorney and property manager. Chances are you can find some workable solutions for your community.

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