PENALTY FOR LATE BUDGET

Although boards are allowed to raise dues by up to 20% without membership approval Civil Code §1366(b), they may not do so unless they distribute a pro forma operating budget as described in Civil Code §1365(a) or a summary as provided for Civil Code §1365(c) AND the budget is distributed not less than 30 days nor more than 90 days prior to the beginning of the association's fiscal year. Civil Code §1365(a)(4)

Failure to meet the above requirements nullifies the increase and requires membership approval for any increase in the dues, i.e., approval by the owners, constituting a quorum, casting a majority of the votes. For the purposes of this provision, "quorum" means more than 50 percent of the owners of an association. Civil Code §1366(a)

Updated by ADAMS KESSLER 8/9/2008