We have been getting lots of questions from clients relating to circumstances caused by the Coronavirus. Below are some responses with the hope of providing useful guidance in these unprecedented times.
Q: Should we continue to pay our monthly Association assessments (dues)?
A:  Yes, however if you have lost your source of income and have no savings or other assets to rely upon, you will need to contact your board and notify them of your situation, intent, and discuss a deferred payment plan. With diminished funds, the Association may be forced to discontinue essential services, such as janitorial, waste disposal, security, etc. Besides inconvenience, this would ultimately result in a negative impact on the value of your investment. It’s critical for those who are able to pay their HOA fees to do so, which will greatly increase the likelihood of surviving the current situation without substantial deterioration to the quality of life or the financial stability of the community.

The association can eventually retrieve the deferred assessments – from those owners returning to work, via special assessments, or if necessary, via liens / foreclosure. Boards are required by statutes to pursue the interests of the entire community, which, unfortunately means they sometimes must force the sale of a unit to collect the monies owed. Bottom line: Not paying your assessments without a payment plan in place rarely works out well for the unit owner. 
Q: We barely have enough money to pay the bills…can we suspend contributions to the reserve fund?
A:  Yes. The Davis-Stirling Act, § 5300 (3) mandates distribution to the membership of the annual funding plan adopted by the board. It is comprised of advanced estimates that may be revised within the fiscal year. If contributions are deferred and not anticipated to be collected before the end of the fiscal year, the board would need to adopt and distribute a new funding plan to establish a revised contribution amount . Note that failure to deposit the monies or modify the funding plan would be deemed “borrowing from reserves”, and subject to the requirements outlined in § 5515.
Q: Some members have stopped paying their monthly assessments. Can the association borrow money from its reserve fund to pay for operating expenses? 
A:  Yes. There is a provision in the Davis-Stirling Act, § 5515, for borrowing from the reserve fund to pay for operating expenses. It requires notice to the membership, detailing the purpose, repayment options, and if a special assessment is considered. It also requires the repayment of the monies within one year. However, that timeline may be extended if the delay is supported by documentation and the required disclosures are repeated.