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Subject: Notice of Emergency Special Assessment
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Author Messages
RaquelS1
(California)

Posts:4


12/24/2020 2:13 PM  
Hi All,

My HOA just sent a Notice of Emergency Special Assessment"

"Please be advised that the Board of Directors has approved an emergency special assessment for the purpose of raising funds to pay roof replacement expenses.
The total special assessment amount is $108,000.
The special assessment is due and payable over a period of consecutive six (6) months with the first payment being due on February 1, 2021.
The billing will be on your regular monthly billing statement"

Questions:
The roof replacement started in 2019 (almost 2 years ago) and finished in Summer 2020, is this really an "emergency" under the California law?
There are not payment options, I don't the money, my part is 106.27 per month for 6 months, anything I can do here?

On top of this, the HOA monthly fee went up last year by 20%, for the same reason, the roof! and in January is going up again another 10%.

Would it be legal to request a payment option of 12 months instead of 6 months?

Thank you,
Raquel
ChrisE8
(New York)

Posts:366


12/24/2020 2:42 PM  
You can certainly ask for a longer payment period. Surely others are.

In my view, someone's "emergency" just means that the person can't handle life in an organized, planned way. That may explain your board.
AugustinD


Posts:4828


12/24/2020 3:41 PM  
Posted By RaquelS1 on 12/24/2020 2:13 PM
Would it be legal to request a payment option of 12 months instead of 6 months?
Absolutely. The Board might agree to this for you. But they may not.

Unless the Board has been going around suing the HOA's members, it's almost guaranteed that the Board has not been frivolous per se with your money. Special Assessments are the alternative to the Board taking out a loan from a bank, which would cost the membership even more money.

Good luck to you.


MarkM19
(Texas)

Posts:716


12/24/2020 3:43 PM  
Raquel,
I have been away from my Ca. board for nearly 4 years now but as I remember and this can be looked up by visiting davis-sterling.com I believe dues can only be raised over 10% without a vote of the whole HOA. If they did it twice in 2 years your HOA may have some major issues. Do you know how they are funding the Reserve accounts? That is where these types of Major repairs should be coming from so it sounds like past boards might not have been doing their jobs and now the current board is stuck making drastic decisions.

Regardless what is important to any home is to have a good roof over your head. If they leak the next Special assessment maybe even larger and if lawyers get involved your HOA may have real problems.

I know that you may be able to get a payment plan if you request it. I personally would just bite the bullet and maybe charge to $650.00 so you can pay as you can and avoid the HOA sending you to collections or adding late payments to your account which can really add up.

JohnC77
(Washington)

Posts:434


12/24/2020 3:55 PM  
In my opinion, the board or management company followed the law. You were given at least a 30 day notice and yes you have a payment option, $637.62 now, or $106.27 over 6 months. Roof repairs are expensive. I have a HOA in California that next month will be voting on a $1M roofing project. You appear to have about 170 units, the one I have is under 100 units so the pain is much greater.

Based on what you posted, the association followed the law.
JohnC77
(Washington)

Posts:434


12/24/2020 3:59 PM  
Posted By MarkM19 on 12/24/2020 3:43 PM
Raquel,
I have been away from my Ca. board for nearly 4 years now but as I remember and this can be looked up by visiting davis-sterling.com I believe dues can only be raised over 10% without a vote of the whole HOA. If they did it twice in 2 years your HOA may have some major issues. Do you know how they are funding the Reserve accounts? That is where these types of Major repairs should be coming from so it sounds like past boards might not have been doing their jobs and now the current board is stuck making drastic decisions.

Regardless what is important to any home is to have a good roof over your head. If they leak the next Special assessment maybe even larger and if lawyers get involved your HOA may have real problems.

I know that you may be able to get a payment plan if you request it. I personally would just bite the bullet and maybe charge to $650.00 so you can pay as you can and avoid the HOA sending you to collections or adding late payments to your account which can really add up.




Assessments up to 20% can be raised annually without membership approval, as long as the budget has been mailed to each owner 30 days prior to the close of their fiscal year.

Special assessments up to 5% can be added without membership vote.
MichaelS56
(Minnesota)

Posts:61


12/24/2020 4:21 PM  
What I do not understand is where is the long range Board and Management planning for large expenses. Each HOA is to have a Replacement reserve for future large expenses and roofs certainly would fall into that category. The Board is following the law, however the Board did a very poor job in long range expense planning for items found in the Replacement reserve coverage. Hope the Board and the Management company do a better job of financial planning.

In Minnesota, we are required to complete a Replacement Reserve study every 3 years.
JohnC77
(Washington)

Posts:434


12/24/2020 5:00 PM  
I will tell you about the one I am working on. In late 2017, I was contacted by a client of my former boss, who by the way is/was a lawyer. They did not turn over any record and a small claims judge said they didn't have to. Now, as of January 2020, it is a law.

I found a reserve study done in 2016, that was pretty much all I had to go on. The association was formed in the early 1980's and maybe had the minutes for six meetings. They hadn't arised dues in almost 20 years. Their reserves were shot, but that didn't stop the rain from coming down and leaking into the units. In two and half years the association spent $192,000 in roof repairs. Roofs hadn't been replaced in over 25 years. I could either walk away from the problem or find a solution that the association could accept.

First thing we did was got rid of worthless earthquake insurance this year, $31,000 savings. Got approval for a $850K roofing loan payable over 15 years. The increase to owners is $66.00 a month. Since you won't need to spend $120K on repairs a year and no more earthquake premium, the association can contribute the $150,000 to the reserve account which will add up to $2.25M over 15 years. If it all goes well, it will finally set them up financially for a long period of time.

RaquelS1
(California)

Posts:4


12/25/2020 11:13 AM  
"Special assessments up to 5% can be added without membership vote."
that would be 5% of the total yearly HOA fees?
JohnC77
(Washington)

Posts:434


12/25/2020 11:15 AM  
Posted By RaquelS1 on 12/25/2020 11:13 AM
"Special assessments up to 5% can be added without membership vote."
that would be 5% of the total yearly HOA fees?



It is 5% of the total budgeted expenses.
LetA
(Nevada)

Posts:1069


12/26/2020 9:11 AM  
That sounds pretty normal. We can only raise our assessments annually 15% without a majority vote. On the bright side, it appears you are going to have healthy reserves, hopefully a good percentage of that increase goes to reserves.
KerryL1
(California)

Posts:7758


12/26/2020 6:23 PM  
JohnC77 has given you correct info, Raquel.

To spread the increase over additional months, write a request to the Board to meet with you in "executive session" to discuss an altered "payment plan" for you. This meeting must be kept confidential from other owners. At the meeting, explain to the Board that their plan creates hardships for you, but you're certainly willing to pay your share. Propose a plan that you can live with. If they do not reply at this executive session, they must by mail within 10 or 15 days (can't recall which).

Do not criticize your HOA's need for more funds or ask why your HOA's reserves are so insufficient.

If you have a reasonable board, they will accept your plan.
RaquelS1
(California)

Posts:4


12/27/2020 9:47 AM  
Thank you so much everyone for your recommendations. It really helped me and now I have proposed a different payment method. Would anyone know if there is something I can do if they refuse my proposal?

When I questioned why there is an emergency statement, they said it is to cover unforeseen expenses! How can this be right in a Covid19 year where everything is "unforeseen". It is pretty nasty. Some people lost their jobs, I lost half of my income, and they keep putting HOA fees up. Last January they increased 20% of the HOA fees, and this year again, another increase on the 1st of January as well as this extra fee.

So no, they are not doing their job, they are just incompetent and extremely selfish. The building is from the '90s, not even that old.

Thank you.


AugustinD


Posts:4828


12/27/2020 10:53 AM  
Posted By RaquelS1 on 12/27/2020 9:47 AM
When I questioned why there is an emergency statement, they said it is to cover unforeseen expenses! How can this be right in a Covid19 year where everything is "unforeseen". It is pretty nasty. Some people lost their jobs, I lost half of my income, and they keep putting HOA fees up. Last January they increased 20% of the HOA fees, and this year again, another increase on the 1st of January as well as this extra fee.

So no, they are not doing their job, they are just incompetent and extremely selfish.
Can you define "reserve study"? If so, have you looked at the most recent reserve study for your HOA? If not, then respectfully (since I know this may be about you not having all the information you need), I think your comments are premature and out of line.
BillH10
(Texas)

Posts:601


12/27/2020 11:00 AM  
Raquel

The present Board may be very competent, in fact far more competent than the previous boards dating back 25-30 years. Selfishness has nothing to do with it. The 'they' (the Board) you identify as being "selfish and incompetent' have a fiduciary responsibility to every owner, including you, to properly maintain the property.

A building dating from the '90s is 'that old'. If this is the original roof and is ordinary asphalt shingles, your Association should consider itself fortunate it has lasted until now. You should expect increases in your assessments on a regular basis from now on due to aging infrastructure, especially if the assessments have been kept artificially low all all these years.

The fact a Special Assessment is necessary may be an indicator previous Boards have not set the assessments at a level sufficient to collect funds needed for repairs and replacements.

Also, the expenses may indeed be 'unforeseen', Covid or not. The roof theoretically has a known life expectancy of around 20 years. What happens if there is a failure of some portion of the roof system which requires replacing it at 15 years? Is that not unexpected? Certainly there may be a degree of warranty coverage but such failures generally are not covered by insurance.

Remember the Association is not 'doing this' to you personally or alone. Replacing a roof is generally not an optional expenditure. Every person who owns property in the Association, including the "they" you identify, is responsible for paying their share of the Special Assessment, just as you are. One or more members of the Board may also have experienced a reduction in income, the decision to impose a Special Assessment may have been as difficult for them personally as it will be for you to pay it.

If you wish to understand what is taking place in your Association and why, you should consider attending meetings of the Board and perhaps volunteer to serve on a committee or the Board itself.
RaquelS1
(California)

Posts:4


12/28/2020 12:49 PM  
they are totally incompetent which made them totally selfish in a Covid19 year, where people are struggling to survive, asking for money for UNFORSEEN expenses, shame on them.
JohnC46
(South Carolina)

Posts:10366


12/28/2020 1:08 PM  
Raq

The BOD has the responsibility to financially operate the association. Things do not cost what they did in 1990 and your dues need to reflect this regardless of Covid. If one cannot afford to live there, one should move to where they can afford to live.
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