QUESTION: What takes precedence in our governing documents? Our bylaws clearly state our yearly dues CANNOT exceed $36.00 a year, yet the CC&Rs say the board can raise them up to 20% each year. Last year the board raised our dues by 20% and again this year they raised them another 20% so they are now $51 per year. Can they do that?
ANSWER: Asking you to pay 98 cents a week for association services is scandalous. It took my breath away. But then I remembered that boards have a fiduciary as well as a statutory duty to levy regular and special assessments sufficient to perform their obligations under the governing documents and the Davis-Stirling Act. (Civ. Code §5600.) Before you break out the torches and pitchforks, you should review your association’s budget. I suspect the board was forced to raise your assessments to such outrageous levels to deal with deferred maintenance and higher insurance costs.
Hierarchy. You mentioned a conflict between your CC&Rs and bylaws. The $36 annual cap in your bylaws is trumped by the 20% dues increase in your CC&Rs. New Civil Code §4205 states that any conflict between the governing documents sets the priority as follows: CC&Rs, articles of incorporation, bylaws, and then rules. In addition, the “Notwithstanding” language in Civil Code §5605(b) voids the $36 cap, i.e., the statute trumps your bylaws. Either way, the $36 cap is dead.
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