By: Nina A. Tran
If you live in a community governed by a property owners association (“POA”) requiring mandatory membership, you are probably also familiar with the requirement to pay the POA maintenance fees or assessments (“Assessments”). The obligation to pay Assessments can generally be found in the POA governing documents, and more often than not in a document entitled Declaration of Covenants, Conditions and Restrictions, or similarly titled document, that is recorded in the real property records of the county in which your property is located. The obligation to pay Assessments is triggered merely by your acceptance of a deed to the property, nothing else, and that obligation remains in place until your ownership of the property ceases by way of sale, transfer or otherwise, evidenced by a newly recorded deed and transfer of ownership.
During the COVID-19 pandemic, some homeowners have tried to argue that their obligation to pay Assessments is waived, or the Assessments should be reduced or offset, due to the fact that many common area facilities, such as gyms, tennis courts and community centers, owned and maintained by their POA were closed or not accessible to the homeowners. As more fully outlined below, non-use of the common area facilities and certainly the pandemic, are not valid defenses for nonpayment of mandatory Assessments.
Assessments are generally used to pay for maintenance, upkeep and repair of common areas and operation expenses of the POA, such as, but not limited to: landscaping, maintenance of gyms, tennis courts, community centers, parks, roads, lights, trash removal, insurance policies, utility payments, property taxes, attorney fees and professional management fees. These POA maintenance and financial responsibilities largely remain the same, in ordinary and extraordinary times, and certainly during a pandemic. Regardless of whether a homeowner uses the POA gym once a month, every day of the month, or never, the rate of Assessments for each homeowner bound by the governing documents remains the same. As such, the obligation of a homeowner to pay Assessments is independent of their use of the common area facilities or their unfettered access thereto.
A Force-majeure or an “Act of God” provision in a contract is generally defined as a contractual provision allocating risk when performance becomes impossible or impracticable, especially as a result of an event or effect that the parties could not have anticipated or controlled, such as the COVID-19 pandemic. In other words, it excuses non-performance due to circumstances beyond the control of the parties. It is a provision that is often found in oil and gas, construction and lease contracts, not so much, if ever, in POA governing documents. The party asserting the defense has the burden of proof, and given that POA governing documents do not generally contain force-majeure clauses, such defense as to the payment of Assessments is not available to homeowners.
The obligation to pay Assessments is not only a personal obligation of the homeowner who covenanted to pay same by acceptance of a deed to the property, but it acts as a lien against the property in favor of the POA to secure payment of the Assessments and allows the Association foreclosure remedies. Failure to pay Assessments can cause an owner to incur attorney fees, interest, collection fees, costs and expenses, all of which also is the personal obligation of the owner and acts as a lien against the property. So, when in doubt as to whether you are obligated to pay Assessments to your POA, carefully read your governing documents or consult a lawyer. You could save yourself a lot of time, money and headaches!