Battram

The facts are not in dispute. Emerald Bay is a private self-contained community of over 500 homes. There are 11 tracts in the community, subject to virtually identical covenants, conditions and restrictions (CC&Rs). The Emerald Bay Community Association (Association) administers the rights and obligations created by all the CC&Rs and establishes a fiscal year budget, funded by imposing homeowner fees against the properties.

The CC&Rs prescribe these fees as a percentage of the assessed value of each property. Article XI of the CC&Rs requires assessed values be determined by the Orange County Assessor’s office. Prior to 1978, this office defined “assessed value” as 25 percent of each property’s full cash value. Following adoption of Proposition 13 (Cal. Const., art. XIII A § 1) “assessed value” became the “full cash value” shown on the 1975-1976 tax bill or appraised value following a change of ownership or in the event of new construction.

After 1978, in determining homeowner association dues, the board of directors continued to rely on the tax rolls provided by the assessor’s office. Thus, Emerald Bay residents purchasing or constructing a home after passage of…