Judge dismisses residents’ lawsuit over RSF Association assessments

The Rancho Santa Fe Association administration building.
(Karen Billing)

The assessment lawsuit filed against the Rancho Santa Fe Association has been dismissed in San Diego Superior Court but the legal fight may continue in an appellate court.

In October 2018, a group of 50 unnamed homeowners called the Rancho Santa Fe Covenant Residents for Fair Assessments sued the Association over its assessment methodology.

Per the Covenant, homeowners are assessed at a rate of $100 per the assessed value of the lot as shown on the San Diego County tax assessor’s roll, not on the property’s fair market value. The lawsuit alleged that this creates an inequity between what is paid by longtime homeowners and those who have recently purchased, built or remodeled a Covenant property.

According to the plantiffs, despite receiving equal services, hundreds of longtime owners pay less than a $1,000 a year in assessments while recent purchasers of properties of similar current value receive annual assessments that approach or even exceed $10,000 per year.

On Aug. 9, San Diego Superior Court Judge Earl H. Maas issued a tentative ruling to dismiss the lawsuit.

Per the tentative ruling: “The assessment method set forth in H 24 of the Protective Covenant is expressly allowed by law (see Civil Code § 5625) and clearly states that the amount of the annual charge or assessment shall be based on the assessed valuations which have been established by the assessment roll of the County Assessor or in accordance with some other legal and equitable plan to be adopted by a majority of all members of the Association.”

The Rancho Santa Fe Association declined to comment on the lawsuit.

“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,” said Michael Riney, attorney for the Rancho Santa Fe residents. “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,” Riney said. “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.”