Special Assessment Pro & Cons

Started by BruceC2 • 10 replies • 2372 views

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BruceC2 (Virginia)
Posts: 54

Posted:

When i took over the poa of 30 yrs i was suprised that no former or current board knew any thing about Va.Property Owners Association Act, anything about Special Assessment or using an Assessment Team to enforce restrictions. If Special Assessment is used to pay for the property owners half of bringing the roads up to minimum standards to be taken over by the state. As i understand it the special assessent would become a lien on ones property until paid or the home was sold or transfered if this is true what would happen to this owners credit, it is only about 1500 dollars can this capital improvement lien mean that an owner would have problems getting credit or as one asked, this will cause my credt card intrest to increase ( help)

DonnaS (Tennessee)
Posts: 5,671

Posted:

Bruce,
Yes it can cause credit problems. You answered all of your own questions. Nobody wants to pay special assessments but they become a fact of life when an association has not prepaired itself by saving Reserve funds for capital improvements. Any owner who refuses to pay the special assessment opens themselves up to liening of their property. Check to see if Virginia has a laws or Statutes for HOAs to use in case of non payment of assessments as every State has different laws. Florida does but I know not about Virginia.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

BruceC2:

I realize, from your other post, that one homeowner asked you...if they chose NOT to pay the special assessment, could a lien be put on their home?

I understand that some states dictate that a lien or fine CANNOT be put on a unit owner for unpaid Special Assessment--only for regular Assessment Fees owed. You need to refer to your state's Association laws, or a local HOA Attorney to get professional advice. And, if you go the Attorney route, request that he put the answer in writing, also noting from what document he is referencing. This will be important for you when presenting to the Assn.

Important--do you have a Capital Reserve Fund to cover repair/maintenance of common expense assets?

Please be more clear, in your other post, re what actual ground is involved for Vdot to 'take' what they need when bringing your private roads up to their codes. This is a very interesting topic, the subject of which many of us, as association residents with private roads, would like to pursue.

I, personally with others, would not blink an eye and gladly pay a Special Assessment Fee to turnover our private roads to the county.
Can we do it next week?......No more high assessment fees!

DonnaS (Tennessee)
Posts: 5,671

Posted:

I agree with Paul that I would pay any special assessment assessed against my property as that is what I agreed to do when I bought into my developement.The fact that the road Reserve is the largest reserve account that we all should have dictates it's importance of being established early on.

It will cost almost 2 million to redo our roads covering 565 homes. The initial job done was less than first class by the developer so we might get 20 years out of them and 7 years are already passed.Because we started out underfunding the road reserves, we have lots of saving to do and some of the hard nose residents have said that they would rather move that pay a huge special assessment. I say--"bye bye"

Because of our gates, the County makes them private roads. If the gates come down, and we apply for the County to assume responsibility for them, then we would be held not responsible for them. I like that concept because the gates are not a foolproof security device and the reserve fund could do wonders in other areas.. They (gates)look good to the average guy but are easily breeched.

We in Florida can lein non payment of special and regular dues not payed. We cannot lein fines being not paid.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Donna,
How the hell do you have time to take care of all you do? We have sixty five units and I can spend all day invloved with aspects of some of it.

Talk about multi-tasking. I also know it takes time and knowledge to post all the stuff you do, lots of time and lots of energy.

Incredible!!!!!!!!!!

DonnaS (Tennessee)
Posts: 5,671

Posted:

I spend lots of time at my desk and Mr. Ding Dong rings when a new post appears. I am Documents for 2 associations so I spend much time reading. Board duties are simple because we have the most dedicated team of 5 AND we are all friends and think similar. Association being the only important thing that we do while we are on Board duty. Thank You

BruceC2 (Virginia)
Posts: 54

Posted:

PaulM

Our meeting last sunday opened with my holding up the Va. Property Owners Association Act, I read the definitions of (act) of (Association) and (body) I then read them (special assessment) I then read them (enforcing restrictions) after that i placed the book on the first table and told each person as this meeting continued to look at it that pages just read were on 2,11,12, highlighted were in deed Va. law. I also asked them to write down the address and a copy would most likely be mailed for i had already in previous gave them a website to find these laws. I told them that by law a special assessment if not paid would become a lien on thier property until paid or the home was sold or transfered. The yearly assessment of 75.00 dollars is all that has been paid in the last 18yrs. there is not or never was a reserve fund of any kind in fact when i took it over in sept. there were 16 delinquent and had not paid in over 12yrs all now are either in payment arrangements the i only took 3 to court in november and received judgement on the associations behalf.EdieL hit the chord when she explaind that there private road was deeded right of way so is ours. In order to give VDOT the right of way every homeowner would have to give the addition of 15ft, this means that if a few people do not want to pay they can simply say they i wont give you the right of way!

MaryN (Virginia)
Posts: 125

Posted:

Bruce,
Have you had an attorney review all your controlling legal documents? We did, we(property owners)hired an attorney who specializes in HOA law. He reviewed our documents and we found..
we are not a mandatory association(we were always told we were)it would take a 100% approval of the lot owners to make it one..
we do not qualify to be part of POAVA(even tho we have paid dues and been members for 9 years)
Our HOA has placed liens on lots in the past and won court judgements, however, when one homeowner went to court, presented the judge with the controlling legal documents...the judge told the HOA they did not have the authority to collect more than the actual road maintenace fees..he also told them they are not a mandatory association. This judge had been president of his HOA and is very familiar with the laws which apply.
We are now part of a very expensive legal battle.
At the end of this legal nightmare we hope:
with good legal council to somehow get the HOA back on track..our roads are in terrible shape..we did have a reserve fund for both the roads and the water system(which the HOA does own)..but we have heard the BOD is using that money to pay a lawyer...
the HOA does not have the authority for a special assessment..
to make the HOA a mandatory association the judge and several lawyers have told us..will take a 100% vote of the then lot owners...
this is one huge, expensive mess..
could have been avoided if...
the last 2 BOD had paid for good legal council..to review the controlling legal documents...
they did attend POAVA meetings, ask questions and relayed general information to the property owners...as well as the booklet with POAVA..we were told that if our CCR's stated we owned payment for anything we were a mandatory association...not true..there is no mention of a POA in our CCR's...also in the creation of our POA there is no declaration as to the lots or areas that are encluded..
at the end of this mess..the HOA will still be a Corp...have little if any authority..and we will all have to come together as property owners to come up with solutions about how to maintain our roads..
Hope your POA doesn't have the same issues to confront..it's a nightmare
Maryn

BruceC2 (Virginia)
Posts: 54

Posted:

MaryN
(WOW) Our association was set up as the road fund this is the only common area we have and is the only reason we collect yearly fees if the majority accept going public i am out of a job.Although the restrictions on the community dont expire until 2027 we currently do not and cannot enforce the resrictions it would be up to any individual homeowner to file suit.Unless these are voted in as a means of reinventing the POA for a future after going public.Previous BODS have used lawyers to take deliqentcies to court to get judgement so i would think this would have cleared the hurdle of legal intent. However it will be on my list of questions reguarding ccr`s our corp. status in reguards as to what or what we cant do to address our future problems.

SusanW1 (Michigan)
Posts: 5,202

Posted:

You said -

"It will cost almost 2 million to redo our roads covering 565 homes."

That is NOT a Reserve Fund expenditure. You coulnd not possibly save up enough money to be ready for that!!!

Reserves can maintain i.e. Patch, slurry, chipcoat, redo small stretches, sealcoat, but NOT a 2 million dollar total re-do. That is a SAD (Special Assessment District) expenditure where I come from.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Susan,
Our Reserve funding is huge compared to many up north associations because of being required by Florida Statutes. We do not have a clubhouse or any other structure to care for or replace so basically we have infrastructure , gates, entries and roads. Our Reserve funds are strictly used-just for Reserve funding. We are not allowed to use them for maintenances and repairs, even on the roads. We fund $95,000.00 yearly in the road fund, therefore for a 20 year road, we are good to go. Because we are a private road system, to find someone willing to kick in would be great. Any suggestions for that? Thanks!

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