Opinion ID: 2593799
Heading Depth: 1
Heading Rank: 8

Heading: Monthly Assessments

Text: The Owners assert that certain monthly assessments for condominium services are not authorized by the Apartment Ownership Act. They argue that assessments for Recuperative Care, the Wellness Center, Bethel College Program, Marketing/Public Relations/Community Service, Debt Service Charges, Street Debt Charges, and the Harvest Room are not assessments for common areas of the condominium project. They claim that fees for these services are to be charged on a fee-for-services basis. The trial court found that the various contracts clearly provide for a single fee assessment for access to all the services provided by the Village. The court noted that the Village was conceived, developed, and marketed as a retirement community consisting of low-income housing, a nursing home facility, and the condominiums, with a broad array of services and facilities available in common to all residents. The court observed that the village concept was explained to prospective purchasers of the condominium units. Based on the testimony of residents, the trial court found that the Owners had a general understanding that they would be required to pay a set monthly fee for the maintenance of their own units and for facilities and services that the Village had available, regardless of their level of usage. The court did not address the Act in making its determination. In the Act, common areas and facilities are defined in K.S.A. 58-3102: (g) `Common areas and facilities,' unless otherwise provided in the declaration or lawful amendments thereto means and includes: (1) The land on which the building is located; (2) The foundations, columns, girders, beams, supports, main walls, roofs, halls, corridors, lobbies, stairs, stairways, fire escapes, and entrances and exits of the building; (3) The basements, yards, gardens, parking areas and storage spaces; (4) The premises for the lodging of janitors or persons in charge of the property; (5) Installations of central services such as power, lights, gas, hot and cold water, heating, refrigeration, air conditioning and incinerating; (6) The elevators, tanks, pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common use; (7) Such community and commercial facilities as may be provided for in the declaration; and (8) All other parts of the property necessary or convenient to its existence, maintenance and safety, or normally in common use. Common expenses are defined in subsection (i) of the same statute: (i) `Common expenses' means and include: (1) All sums lawfully assessed against the apartment owners by the association of apartment owners; (2) Expenses of administration, maintenance, repair or replacement of the common areas and facilities; (3) Expenses agreed upon as common expenses by the association of apartment owners; (4) Expenses declared common expenses by provisions of this act, or by the declaration or the bylaws. Limited common areas are defined by K.S.A. 58-3102 as: (m) `Limited common areas and facilities' means and includes those common areas and facilities designated in the declaration as reserved for use of certain apartment or apartments to the exclusion of the other apartments. The declaration provides as follows: 1.11 Common Expenses. `Common Expenses' shall mean and refer to the following: (a) Expenses incurred by the Board in the maintenance, repair and replacement of common areas and facilities. (d) Expenses incurred pursuant to any agreement with Declarant, or its assigns, to provide health services and facilities to the Board. (e) All other expenses agreed upon as common expenses by the Board. Regarding the purposes of assessments, the declaration provides: 8.1. Purposes of Assessments. The assessments levied by the Board of Directors shall be used to discharge the duties imposed under Article Seven hereof. Proper uses of the assessments levied by the Board of Directors shall include, but are not limited to, the expenditure of funds for taxes, fees, expenses, charges, levies, premiums, expenditures or other costs of the Board of Directors for: (a) Providing for health services and facilities for the members. (b) Generally for any purposes and uses that the Board of Directors shall determine to be necessary to meet the primary purposes of the [Association]. (c) Repairing, replacing and maintaining the common areas and facilities. (d) Installing, maintaining, and repairing roads and underground utilities upon, across, over and under any part of the subject property. (e) Furnishing garbage and trash pick up and water and sewer services. (f) Providing horticultural services .... (g) Obtaining and maintaining insurance .... .... (i) Establishing and maintaining reserves for repairs, maintenance, taxes, capital improvements and other purposes. (j) Carrying out all other powers rights and duties of the Board of Directors. .... 8.3 Amount of Total Assessment. The annual assessment for each condominium unit for the first assessment year shall be in the amount of $165.00, multiplied by the number of months in such first assessment year. Commencing with the second assessment year and thereafter, the total annual assessments against all condominium units shall be based upon the Board of Director's advanced budget of the cash requirements needed by it to provide for the administration and performance of its duties during such assessment year, which estimates may include, among other things, the following: (a) Providing for health services and facilities for the members. (b) Any other costs, expenses and fees which may be incurred or may reasonably be expected to be incurred. (c) Expenses of management. (d) Premiums for all insurance which the Board of Directors is required or permitted to maintain as provided in Article Nine hereof. (e) Common lighting, heating and other utility charges, water charges, trash collection and sewer services charges. (f) Repairs and maintenance. (g) Wages for employees. (h) Legal and accounting fees. (i) Any deficit remaining from a previous assessment year. (j) The creation of reasonable contingency reserves, surpluses and sinking funds. The Owners challenge several items as outside the scope of expenses contemplated by K.S.A. 58-3102 and the declarations. The challenged assessments are discussed separately.