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Subject: HOA Dues
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AuroraF1
(California)

Posts:8


12/07/2019 11:07 AM  
Can the board waive the 2020 yearly dues or is it illegal for them to return yearly dues even for one time? The reason why I ask is because my friend told me that their HOA decided that they have too much reserve in the bank. The prior board decided to increase their dues in the last 5 consecutive years just because the president then foresaw lawsuits coming her way. It was primarily to pay for attorney and court fees. They decided to hire a property management to manage finances as their way of cutting on this extra reserves. What are the circumstances they can or cannot do this about yearly dues?
MarkW18
(Florida)

Posts:361


12/07/2019 11:29 AM  
It is not illegal
GeorgeS21
(Florida)

Posts:1846


12/07/2019 11:38 AM  
Usually, an HOA that has a reserve fund for capital components, also had an operations budget.

While it is easy to imagine not needing reserve component funds for a year, due perhaps to recomputation of wear, damage, etc, it is harder to understand how the operations component would not be needed. In other words, reducing the reserve component of the assessment (even eliminating it for a year), while continuing to assess for that year based on operations costs.

Make sense?
MelissaP1
(Alabama)

Posts:8905


12/07/2019 1:05 PM  
Reserves are not for lawsuits. They are for specified TANGIBLE items like Roofs, roads, or other replacement/repair costs. Legal fees are covered by insurance in many cases. Plus legal fees would not be considered a reserve item. It doesn't make sense.

The HOA needs to get a grasp on what is and is not a reserve expense. As even hiring a MC is not a reserve expense. The HOA may want to take the reserve funds and purchase or repair a common area element. It shouldn't be returning the money to the owners/members either. Bad idea.

Former HOA President
AuroraF1
(California)

Posts:8


12/07/2019 1:17 PM  
Thank you for the input. But their community is not even CID as the board claims. There is no common interests to maintain. Each of the owners (they all own their respective lands) are responsible for their property for maintenance. They don't even have a clubhouse. There are no wear and tear or damage, etc to take care except for 3 light fixtures on each of the 3 entrances. So she feels since the dues were increased unnecessarily for the last 5 consecutive years just for court and lawyer expenses. They also know there is an insurance that takes care of these type of fees.
AuroraF1
(California)

Posts:8


12/07/2019 1:30 PM  
Continuation: Streets inside their community are city owned not owned by the community. Residents in the past have been asking for humps so that drivers from within and outside the community do not drive like they are in the freeways but they say they have to take a petition to send to the city.
MarkW18
(Florida)

Posts:361


12/07/2019 1:52 PM  
For example, if a reserve study you need $20K to fully fund your reserves and the Board, over the course of 5 years built up an additional $80K war chest for litigation and that is not going to be used, it is only right to refund the monies back to the owners still living at the complex.

In California, monies from a reserve account can be borrowed on a short term basis ( 1 year) to cover a short fall in operational expense (legal being one of those expenses).
AuroraF1
(California)

Posts:8


12/07/2019 2:08 PM  
MarkW18, this was the thought I had when she told me the issue. I told her the same thought you are giving here. She was told it is illegal or they cannot refund some monies. Can you show me a reference material about what you just said here - For example..........it is only right to refund the monies back to the owners still living at the complex." I wanted to show it to her if there is any law that she can cross reference as she wanted to write a letter to the board. Thank you.
MarkW18
(Florida)

Posts:361


12/07/2019 2:16 PM  
This might help.

https://www.davis-stirling.com/HOME/Excessive-Reserves

Figuring out exactly how to refund is not that difficult.
GeorgeS21
(Florida)

Posts:1846


12/07/2019 2:27 PM  
Would it not be more reasonable to return funds to those who were living there at the time?

Or, since the excess was generated over several years to pro-rate?

Or, since others may have been there a percentage of that time?

So, bad idea to rebate - good idea to simply not assess until in balance?
AuroraF1
(California)

Posts:8


12/07/2019 4:18 PM  
Thank you for everyone's inputs. Merry Christmas and Happy New Year to all.......
JohnC46
(South Carolina)

Posts:9051


12/07/2019 6:01 PM  
Posted By MarkW18 on 12/07/2019 2:16 PM
This might help.

https://www.davis-stirling.com/HOME/Excessive-Reserves

Figuring out exactly how to refund is not that difficult.




This is the answer even if not in CA.
DougF2
(Virginia)

Posts:1


12/12/2019 3:58 AM  
Good Morning I Do have a quick question You all might be able to point me to the right direction. I live in Virginia small country town. I move in my house 6 years ago and I was never told about the HOA or there fees. I just Receive a bill with the last 6 year fee and plus 26% interest,my 1st bill I have received about this. I have pulled my deed of my property its not on my deed or at my closing. I have never received disclosure package as of yet. Now they are telling me they are going to get Warrant in debt on me on my un-paid dues. I don't believe I am responsible for this bill since I was never was told or receive a package plus it was in my closing. Am I on the right track ? Doug
GeorgeS21
(Florida)

Posts:1846


12/12/2019 5:11 AM  
Doug,

Start a new thread.
MarkW18
(Florida)

Posts:361


12/12/2019 3:42 PM  
Doug,

George meant to say PLEASE.
MelissaP1
(Alabama)

Posts:8905


12/12/2019 4:43 PM  
Yes. It is best to start a new thread. However, the short answer is most likely you owe the HOA the money. Most HOA's don't send out "bills" for you to pay. They also don't necessarily provide "closing packages". No one is responsible for providing you the CC&R's/Articles Incorporation except the Seller at closing in SOME states. (Not all States. It is viewed as the buyer to be informed as the documents are PUBLIC).

So if you were looking for a bill or someone to tell your in a HOA that doesn't necessarily happen or excuse it.

Former HOA President
GeorgeS21
(Florida)

Posts:1846


12/12/2019 5:47 PM  
Thanks Mark, but I did not mean to say please.
MarkW18
(Florida)

Posts:361


12/12/2019 9:39 PM  
Posted By GeorgeS21 on 12/12/2019 5:47 PM
Thanks Mark, but I did not mean to say please.



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