AB 2846 - Gives Owners Option of Paying Disputed Assessments, Costs, Fees, Interest or Penalties Under Protest

Feldsott & Lee
A Law Corporation

Assembly Bill 2846 (hereinafter “AB 2846”) takes effect on January 1, 2009. It amends Civil Code §1365.1 and adds Civil Code §1367.6. AB 2846 provides that if there is a dispute between an owner and the association regarding a charge levied by the association (including assessments, costs, fees, interest, fines and monetary penalties imposed as a disciplinary measure), the owner may pay the amount in dispute under protest and subsequently sue the association in small claims court. The disputed amount must be within the jurisdictional limits for small claims, which is $7,500 for natural persons and $5,000 for corporations and businesses. The owner must pay under protest, for example, by noting it on the payment, if he or she wishes to dispute it later in small claims court.

AB 2946 will prevent minor disputes from unnecessarily spiraling into big legal battles and will allow the parties to resolve their disputes in the most cost-effective manner. Even if paid under protest, the owner’s account will technically be reflected as current so he or she will not incur additional late fees, interest or other penalties, and associations will not need to run up legal bills for collections of those subsequent dues.