Update on Fair Assessment Lawsuit


Rancho Santa Fe Covenant Residents for Fair Assessments, a group of Covenant homeowners, sued the Rancho Santa Fe Association (see here for pleading) to overturn the method that the Association uses to calculate yearly HOA dues (see here and here for background).

The Association filed a demurrer which was heard last Friday, August 9th. Judge Mass ruled in favor of the Association to grant the demurrer.

Michael Riney, lawyer for the Fair Assessments group had this to say about the hearing:

Judge Maas began last Friday’s hearing with the observation that, no matter how he ruled, the case would ultimately have to be decided by the Court of Appeal. His ruling allows that appeal to be taken without delay.

We believe that the Court of Appeal will interpret the Covenant’s assessment language as permitting assessments only in proportion to current fair market values, without regard to time of purchase. That is how the Court of Appeal interpreted virtually identical assessment language in a case regarding the CC&Rs at Emerald Bay in Orange County. And that is how the Court of Appeal should interpret the assessment language contained in the Rancho Santa Fe Protective Covenant.

The Fair Assessments group has about 60 days to file an appeal, and should they do so, it will likely take about 18 months to adjudicate.

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