We are proud to announce we have been awarded the AICPA SOC Audit seal. 
Click the on the seal for more information about this accomplishment!
Special Assessments
If You Had a Hammer
User Rating:
/ 0
- Details
-
-
- Category: Special Assessments
Get down to brass tacks (not to mention green dollars) with a comprehensive maintenance and repair plan.
A 264-unit high-rise condominium community in Alexandria, Virginia, recently imposed a special assessment of almost $9,500 per unit to fund a $4-million exterior repair project. The project concentrated on repairing spalled concrete on balconies and refinishing stained and discolored window units.
Why was such a basic project performed on such a grand scale, with such a huge price tag? Lack of regular maintenance. The community had failed to maintain cementitious coatings on the balcony decks and ledges, to replace deteriorated non-shrink grout around balcony railings, or to periodically clean windows, resulting in sand from the brick veneer reacting with and staining window glazing.
Borrowing for Major Repairs
User Rating: / 0
- Details
-
-
- Category: Special Assessments
As communities mature more and more boards are faced with the responsibility and need to do major repairs of their common areas. Often, because of unanticipated problems lack of or un-funded reserves, associations do not have sufficient funds to make necessary repairs.
In the past when faced with a situation where major repairs were required and funds were not available, associations had no alternative but to pass a special assessment, defer repairs, or complete the work piecemeal over time. Each of these solutions has its own shortcomings and can create new problems for the board and the association members.
Special assessments, are never popular, can create a real hardship for owners, and are often difficult or impossible to pass. Putting off necessary repairs is in clear conflict with the board’s fiduciary responsibility to “preserve enhance and protect” the value of the asset, and can create additional liability for the association if questions of health and safety are involved. Spreading the work over time often will increase the overall cost of the project; lead to excessive insurance claims for repairs and can become a source of owner dissent.
Avoiding the Special Assessment Trap
User Rating:
/ 1
- Details
-
-
- Category: Special Assessments
Don't think owners won't notice an extra charge from the association. Prepare for a fight and plan ahead to avoid special assessments altogether.
Many community associations turn to special assessments when confronted by unanticipated repairs, but boards need to avoid making hasty decisions to fund these surprise expenses.
Special assessments should be the last resort - not the first step -
Special Assessments?
User Rating: / 0
- Details
-
-
- Category: Special Assessments
Don't Rely on Special Assessments for Major Repairs If You Can Help It!
Because many people are hurting financially right now, your homeowners association board might be considering whether or not you should underfund your HOA's reserves.
As usual, there are differences among state laws governing associations' reserve practices, so whatever approach you take, you should start by checking your state law.
Boards who decide to underfund figure that if they ever needed to undertake a major repair, they could make up for a shortfall through a special assessment. No harm. No foul. Right?
For this week's tip, we spoke to David C. Swedelson, principal at Swedelsen & Gottleib, a law firm that represents associations in the Los Angeles area.
David pointed out the problem with this logic: "What happens if homeowners don't fund the special assessment?"
Beyond that problem, David explained why the decision not to fully fund reserves comes with unhappy consequences: "If I were going to buy and saw that one association had somewhat healthy reserves and the other didn't have much in reserves, I'd know the second association was likely to special assess as it went along."
The bottom line? Underfunding reserves undermines property values and could even be interpreted as a breach of your fiduciary duty to the association. So if you really think it's right for your HOA, get advice before you act.
