Emergency Assessment

Started by SandeepB • 5 replies • 2703 views

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SandeepB (New Jersey)
Posts: 3

Posted:

I live in new jersey and our board is out of control. The Board wants to do wood trims and has come up with a proposal to do it for $650,000. They now want to do an emergency assement of $2400 per unit I dont think that it is an emergency to do this but the board knows that this way no one can question it or they do not have to take 2/3 vot to get a special assessment approved.

the engineering report also does not state it to be an emergency though they feel the need to do wood trims?

Is there any law or rule that requires the board to justify or quantify an emergency else we are at the mercy of the board since they can easliy get away by doing what they want by calling anything and everything an emergency. It should also be noted that this repair benefits the board member more since it is needed more to the section where they live.

I need urgent help and advise.

Thanks

SamuelB (North Carolina)
Posts: 83

Posted:

I can not speak for New Jersey, but your Declarations can. In North Carolina, the Board can not issue a Special Assessment to make a repair/upgrade of this nature, if the repair/upgrade exceeds $25,000 without a super majority vote (66%) of the entire community who are eligible to vote. Those unit owners in arrears in their dues are not eligible to vote, but every other unit owner has one vote per household. Take a quick look at your Declarations, starting from the state documents on down to your Bylaws. If you can find a statement like the above anywhere along the line, you may very well be able to stop this wild expenditure.

I fly because it releases my mind from the tyranny of petty things . . . - Antoine de St-Exupéry

SamuelB (North Carolina)
Posts: 83

Posted:

Also, in North Carolina, there is no such thing as an "Emergency" Assessment. I don't know about other states, but in NC there are only 2 types of assessments; 1). the normal monthly dues, and 2). "Special" Assessment. Your situation above would fall under the "Special Assessment" rulings in our state. I make this distinction only because "Emergency" carries with it a very special connotation. The assessment that is proposed in your neighborhood as you have described it, is far from being an emergency.

Hurricane Katrina hit our community last year (2005) and we definitely felt that was an emergency. And still it was a "Special Assessment" that directed us to collect the costs of repairs (actually only the insurance deductible needed to be collected).

I fly because it releases my mind from the tyranny of petty things . . . - Antoine de St-Exupéry

SamuelB (North Carolina)
Posts: 83

Posted:

Sharon, there is another section of law in NC that might help as well, that falls under the "limited common area" of the development (condo or single family units). If one of the board members feels that his/her unit needs the repairs more than other units, then have the board go forward with a repair to only the affected units, and then only those units share the cost, not the entire development.
Rulings concerning "limited common areas" in most Declarations I have read are very difficult to understand, but can be very powerful in a situation like this. May be well worth looking in to.

I fly because it releases my mind from the tyranny of petty things . . . - Antoine de St-Exupéry

SandeepB (New Jersey)
Posts: 3

Posted:

I read the By-Laws and there is a clear distinction between emergency and Special assessments. You are right with the special assessments that they need to take approval for reparirs over 25K but when I read the emergency assessment clause it says that it is at the sole discretion of the Board.

I feel that this is too broad and any board can make crazy decisions using this clause. They has be some restrictions on how to interpret emergency.

SamuelB (North Carolina)
Posts: 83

Posted:

If there is actually a distinction in your Bylaws between Emergency and Special Assessments, I would look at the governing documents (the Covenants and then your state documents) to see if it is legal for your Bylaws to make that distinction. You might be surprised at how many rulings in HOA Bylaws are illegal because the governing documents do not permit them.

I fly because it releases my mind from the tyranny of petty things . . . - Antoine de St-Exupéry

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