Can My HOA Raise Dues or Levy a Special Assessment? California's 20% and 5% Rules

Yes, but within limits. Under Civil Code section 5605, a condo board may not raise the regular assessment by more than 20 percent over the prior fiscal year without member approval. It also may not impose special assessments that together exceed 5 percent of the association's budgeted gross expenses for the year without member approval. Emergencies are an exception, and owners get 30 to 60 days' notice of any increase.

For a Los Feliz condo owner, these rules explain how much the board can do on its own and when the owners get a vote. At Rooster Homes™, we check a building's assessment history against them before a client buys. This article is general information based on the current Civil Code, not legal advice.

Your regular assessment is the monthly or yearly HOA fee. Section 5605(b) says the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the prior fiscal year without approval of a majority of a quorum of members, given at a member meeting or election.

There is a second condition for any yearly increase. Under section 5605(a), the board may raise regular assessments for a fiscal year only if it has distributed the required parts of that year's annual budget report, or has member approval. That report includes the operating budget, the reserve summaries and a statement on expected special assessments.

So an increase of 20 percent or less can be a board decision, as long as the budget report went out and the CC&Rs do not set a tighter limit. An increase above 20 percent goes to the members, unless it is an emergency.

A special assessment is a charge on top of the regular fee, usually to pay for a specific project. Section 5605(b) says the board may not impose special assessments that in the aggregate exceed 5 percent of the association's budgeted gross expenses for that fiscal year without approval of a majority of a quorum of members.

Two parts of that sentence matter. First, the 5 percent is measured against the budgeted gross expenses for the year, not against your own monthly fee. Second, it is in the aggregate. Several smaller special assessments in the same fiscal year are added together.

Also, under section 5600, an association may not impose or collect an assessment or fee that exceeds the amount needed to cover the costs it is levied for.

Here is a simple example with made-up numbers. They are not the figures for any Los Feliz building.

Regular dues. Say last year's regular assessment was $500 a month. Twenty percent of $500 is $100. So the board could raise it to as much as $600 a month on its own, as long as it distributed the budget report and the CC&Rs set no tighter limit. Anything above $600 would go to the members, unless it is an emergency.

Special assessments. Say the association's budgeted gross expenses for the year are $1,000,000. Five percent of that is $50,000. The board could levy special assessments totaling up to $50,000 for the year on its own. Past that, it needs member approval, unless it is an emergency. How the total is divided among units depends on the building's governing documents.

Notice the difference. The 20 percent rule is measured against your own prior regular assessment. The 5 percent rule is measured against the whole association's budgeted expenses.

It is a specific voting standard. For section 5605, the quorum is more than 50 percent of the members. Under section 4070, a measure passes when it wins a majority of the votes cast in a properly held election where a quorum is represented, and those yes votes also add up to a majority of the required quorum.

In plain terms, enough owners have to take part to reach a quorum, and the yes votes have to be more than half of that quorum. A building's CC&Rs can hold the board to tighter limits than these, because section 5605 applies notwithstanding more restrictive limits the governing documents place on the board.

Section 5610 says section 5605 does not limit increases needed for emergency situations. It defines three:

1. An extraordinary expense required by a court order.
2. An extraordinary expense to operate, repair or maintain property the association is responsible for. It applies when a threat to personal health or safety or another hazardous condition is discovered.
3. An extraordinary expense to repair or maintain property the association is responsible for that the board could not reasonably have foreseen when it prepared the annual budget report.

For the third kind, the board first passes a resolution with written findings. It explains why the expense is necessary and why it was not or could not have been foreseen in the budget. That resolution goes to the members with the notice of assessment.

Section 5615 requires the association to give each member individual notice of any increase in regular or special assessments. The notice arrives not less than 30 and not more than 60 days before the increased assessment becomes due.

The budget report is an earlier signal. Under section 5300, it states whether the board has determined or expects that one or more special assessments will be needed for major components. If so, it gives the estimated amount, the start date and the duration. We walk through that report in how the HOA budget and reserve study work under California law.

If you are buying, the question is what is already scheduled and what might be coming. Under section 4525, the seller discloses any change in regular and special assessments the board has approved that is not yet due. The budget report shows any special assessment the board expects. The reserve study shows the big repairs ahead. We read all three with you before you remove contingencies. Our buying approach is on buying a condo in Los Feliz, and if you plan to rent the unit out, investing in a Los Feliz condo covers how assessments fit your numbers.

If you are selling, an approved assessment is part of the disclosure package, and buyers ask about it early. We order the HOA documents the day you sign, so we can explain the assessment clearly in the marketing and in every conversation with a buyer's agent. See selling your Los Feliz condo.

Who pays an assessment that falls due during escrow is a term of the purchase contract, so it gets decided in the offer.

Rooster Homes™ is a Los Feliz, Los Angeles real estate brokerage owned by Brandon and Sarah Arlington (DRE #02051216) helping buyers and sellers of Los Feliz condos and townhomes. When a building has a planned assessment or a large increase on the way, we lay out what the documents say and what it means for your price and your monthly budget.

To talk through a specific building, send us a note or call (323) 201-2724. If you are an owner disputing an assessment, an attorney who works with associations is the right person to advise you.

This article reflects the California Civil Code as read on the Legislature's website on September 23, 2026. Laws change, so confirm the current text before relying on it.