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| Author |
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BonnieE
(Illinois)
Posts:176
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| 08/14/2006 1:54 PM |
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| Helo - Our Reserve Report for our Master HOA (Master encompasses both condo HOAs and single family homes that comprise the subdivision) did not include the dry stormwater detention basins on our property. As a result, no funds have been built up in the Reserve Fund for these basins. Other common elements which would require capital repair or replacement were included. Unfortunately, one detention basin has been found to need a major expenditure to repair it. The question I have is whether the Reserve Fund can be used to cover the cost of the repair. If so, the Reserve Report would need to be updated and a new Reserve funding plan developed. The only other option would be a special assessment, which I do not think should be done for a number of reasons (we already have a significant delinquency rate and we would likely expend a significant amount of money trying to obtain the special assessments from the recalcitrant HOs). |
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RogerB
(Colorado)
Posts:3725
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| 08/14/2006 4:36 PM |
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| Bonnie, if you have sufficient reserve funds I would use part of the reserve funds to repair the detention basin. Then modify the reserve plan and increase the next annual assessment accordingly. |
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150 
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JosephW
(Michigan)
Posts:787
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| 08/14/2006 6:46 PM |
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I hope this wasn't a professionally done reserve report. Very often, reserve reports done by owners forget to look down, at things underground or drainage/sewer issues. They tend to focus on roofs or roads, very visible items.
I agree that if your documents and state law allow it, use the current reserves (in some states like mine, reserves funds can only be used for the items they were collected for). I would urge you to adopt a resolution, stating the nature of the emergency, the amounts to be used and the plan to re-fund the reserves. This makes it a little more formal and future boards would have to deal with it, just in case they thought they could save a few bucks by not rebuilding the reserves.
This may also be a good time to clean up the delinquency problem. Send the delinquent owners a note to the effect that the association is undergoing a financial shortfall, in part due to the delinquencies. Give them a 30-day grace period to pay up-to-date, letting them know that at the end of that period, collections will be turned over to the association attorney, and they will find the costs of becoming current will be significantly more.
Joe |
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Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
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