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It is quite common for an association to kick the can down the road when it comes to building reserve account(s) thus when something hits (emergency or normal maintenance), they not have enough or any money to cover it thus an assessment is required.
The more one does not see themselves living there in say 10 years, the harder it is to properly fund an event happening in 11 years.
I know of one 15 year old HOA of $450K townhomes that needed repairs (like residing, new porches, etc.). It came down to $25 to $30K per unit (175 units). The BOD did such a good job presenting it that 85% of the owners voted for it. The HOA had arranged for a bank to loan any owner the needed money with up to a 5 year pay back.
I disagree with that. It is certainly not common in my area for complexes to have low or skimpy reserve funds. I have quite a few friends who live in condos and we have discussed this topic before and they agree with me.
In fact, our state even has a maximum limit to how much of your budget can be put in the reserve fund. Obviously, the state would only do this if there was a problem with condo associations trying to put away too much money in their reserve funds for future major repairs.
The reason I joined our board was to understand all the finances and to be able to voice my opinion. I didn't have real concerns, but wanted to get involved. We talk about maintenance schedules every month. Nothing is ignored. We follow the schedule exactly as it is laid out. Painting, street repairs, landscaping replacement, porch repairs, etc. Kicking the can down the road is stupid and irresponsible. We want to keep our community looking great and keep our home values high.
I don't understand how these other condo associations can keep doing these massive assessments. It is unethical and wrong. I would sell my condo in a heartbeat if that was the case.
A reserve study must be done and followed exactly. The funds must be collected every month to ensure proper finder and avoid dreaded assessments. Every condo association should have a law film representing them and making a yearly appearance and report at the community meetings. And a full audit of the financials should be done every 2 years. These are all things we do. It may cost a bit more per month, but we avoid assessments this way.
I think researching before you buy is probably your best route especially on an aging property where things will have to be fixed here and there.
Your other best bet is to participate in board activities. Go to the meetings. Get to know the board managers. Know why they are doing what they're doing and speak up if you have questions. Vote in the elections. Many people don't participate in condo board or HOA affairs and then they are shocked when things happen.
I had a friend who owns a 1/1 condo near Fort Lauderdale beach. He had special assessments of several hundred dollars a month for 3 years added to is hoa/maintenance fees to cover repairs. I bet by the time the 3 years are up there will be more assessments.
Without knowing the association's finances how can you say that? It might have been spread out over 3 years so people wouldn't have to pay up at once.
I had a friend who owns a 1/1 condo near Fort Lauderdale beach. He had special assessments of several hundred dollars a month for 3 years added to is hoa/maintenance fees to cover repairs. I bet by the time the 3 years are up there will be more assessments.
Quote:
Originally Posted by thinkalot
Without knowing the association's finances how can you say that? It might have been spread out over 3 years so people wouldn't have to pay up at once.
Good point.
In my 35 years as a condo owner I had to pay three special assessments. While I don't remember the first one (I think we had one year to pay it), the last two we had two years notice to pay the $2,000. I bet that some people just paid off a little every month instead of all of it at one time.
one thing we learned that potentially can be very dangerous in an hoa ,co-op or condo is liability issues .
we had our own residents doing patrolling in our development in the pocono's when we had the house .
we would get people with atv's or snow mobiles using our private roads which is not allowed ,so the patrol would chase them away .
the question came up as to what happens if a law suite is lost due to injury and someone wins an award larger than the development insurance ?
the answer surprised us , as not only are we each held liable for any shortfall but our homeowners and umbrella will not cover those kind of events .
we thought our umbrella would cover the overage if we were held liable for the difference .
nope ! turns out liability insurance covers only events caused by you or your insured . it does not cover events caused by 3rd party's .
since that would not be an event caused by you no coverage is given.
i called geico to confirm . they said yep , anything that happens by others in an hoa ,condo or co-op that has spillover to you because it exceeds the developments policy would not be covered .
they said some insurers sell riders for that coverage if you live in a condo ,hoa or co-op but they do not offer it .
Last edited by mathjak107; 10-09-2016 at 03:47 AM..
Oh, we don't have a condo yet. My husband just said that it's common to be regularly hit with huge special assessment fees in condos.
I guess a newer, well-reviewed condo would be the safest bet. The states we're considering are Oregon or Washington.
I have only lived here six years, and I am on the board. We've had two assessments since I was here. $150 because we went over our snow budget a few years ago during a bad winter, and $300 because after the two hurricanes that hit New Jersey, the number of insurance companies underwriting wood-frame condo complexes was greatly reduced and the premium doubled. We are fortunate in that we are five miles inland. Complexes within 2 miles of the ocean have only one company willing to insure them, I'm told, and so there is no chance for competitive price proposals.
If you are going to live in a condo, please do your board and management company a favor and educate yourself and be involved. The board is not an US v. THEM situation. It is all US. Yet ten owners out of 122 units show up at the quarterly meetings. A neighbor was complaining to me last week that the fee is too high. Someone she knows at a different complex doesn't pay that much. I wanted to ask, "How incredibly stupid do you choose to be???" There is no identical complex to the one where we live. They have a different number of units, might have different expenses, might be newer--what on earth does another complex have to do with what WE pay????
Then she went on to say well, she just doesn't know where her monthly fee goes. Well, that's on you. This is YOUR property. Our budget is gone over meticulously at the third-quarter meeting every year and available to you in print. The information is there. You can't be bothered to get off your ass and come to a 90-minute meeting four times a year, so don't complain to me that you don't know where the money goes.
Then she says she "doesn't know" when the meetings are held. They are the third Wednesday of January, April, July, and October, and you get a letter so stating that with the exact dates at the beginning of each year. Further, we hang a large wooden sign off the sign at the entrance to the complex the week before reminding everyone of the meeting. And last year I started sending emails to the unit owners who have provided their emails.
If you don't keep yourself informed and educated about YOUR OWN HOME, don't go whining to somebody. It's YOU who is the problem.
Back to large assessments, they did have a larger assessment a few years before I moved in. The complex was built in 1985, and it needed new roofs. I don't think it was huge, though, because it was meant to supplement what they needed from the reserves so as not to deplete them, not pay for the roof entirely. We just replaced all the sidewalks in the community with funds from the reserves.
I have only lived here six years, and I am on the board. We've had two assessments since I was here. $150 because we went over our snow budget a few years ago during a bad winter, and $300 because after the two hurricanes that hit New Jersey, the number of insurance companies underwriting wood-frame condo complexes was greatly reduced and the premium doubled. We are fortunate in that we are five miles inland. Complexes within 2 miles of the ocean have only one company willing to insure them, I'm told, and so there is no chance for competitive price proposals.
If you are going to live in a condo, please do your board and management company a favor and educate yourself and be involved. The board is not an US v. THEM situation. It is all US. Yet ten owners out of 122 units show up at the quarterly meetings. A neighbor was complaining to me last week that the fee is too high. Someone she knows at a different complex doesn't pay that much. I wanted to ask, "How incredibly stupid do you choose to be???" There is no identical complex to the one where we live. They have a different number of units, might have different expenses, might be newer--what on earth does another complex have to do with what WE pay????
Then she went on to say well, she just doesn't know where her monthly fee goes. Well, that's on you. This is YOUR property. Our budget is gone over meticulously at the third-quarter meeting every year and available to you in print. The information is there. You can't be bothered to get off your ass and come to a 90-minute meeting four times a year, so don't complain to me that you don't know where the money goes.
Then she says she "doesn't know" when the meetings are held. They are the third Wednesday of January, April, July, and October, and you get a letter so stating that with the exact dates at the beginning of each year. Further, we hang a large wooden sign off the sign at the entrance to the complex the week before reminding everyone of the meeting. And last year I started sending emails to the unit owners who have provided their emails.
If you don't keep yourself informed and educated about YOUR OWN HOME, don't go whining to somebody. It's YOU who is the problem.
Back to large assessments, they did have a larger assessment a few years before I moved in. The complex was built in 1985, and it needed new roofs.
I was going somewhere with the board president one day and one of her neighbors waved us down. We have fenced-in patio/garden areas behind our units which the owner must maintain, and there are some rules, like no big trees in there because they are too close to the building. This guy had a tree and we had been after him to cut it down, which he finally did. His question was, "If I want to cut my own lawn and remove my own snow and take care of my own landscaping in front of my unit and not pay the monthly maintenance fee, how do I go about doing that?" I said, "Buy a single-family home." He said, "Really? I can't just do my own stuff and not pay the fee?"
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