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Subject: Painting of Exterior Buildings
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Author Messages
WendyZ
(Michigan)

Posts:6


08/12/2021 9:36 AM  
I serve as VP of the Board and helped with the finances to figure out the dollars needed for the Special Assessment for the exterior painting of the buildings. Our bylaws indicate a vote of 66 2/3 would be needed for any assessment over $1500. Please see attached copy explaining assessment and Special Assessment. As a board we did not take a 66 2/3 vote among the co-owners, should we have and are we in trouble legally?

Attachment: 1812362289471.PDF

AugustinD


Posts:1937


08/12/2021 10:16 AM  
WendyZ, Part of section 9 is missing from the excerpt you provided. Would you kindly provide it? Thank you for providing what looks like the relevant covenants. It so beats the veterans here having to pull teeth so they can provide the best responses possible.

Posted By WendyZ on 08/12/2021 9:36 AM
I serve as VP of the Board and helped with the finances to figure out the dollars needed for the Special Assessment for the exterior painting of the buildings. Our bylaws indicate a vote of 66 2/3 would be needed for any assessment over $1500.
-- So far, this is not how I read section 9 and section 10. To me, it's crystal clear that the board, without a vote of the owners, has the sole discretion to approve and implement an additional assessment to pay for needed maintenance such as painting. There is no dollar limit.

But I and many others here aim to be thorough. Could you explain why you have doubts? Or were you just looking for a double (and then some) check by folks here?
DouglasK1
(Florida)

Posts:1689


08/12/2021 2:11 PM  
My take is the same as above. In para 9, special assessments for items identified as (a), (b), (c) and (d) can be levied at the board's sole discretion. Special assessments for the categories (a), (b), (c) identified in para 10 would require the 2/3 owner consent.

Escaped former treasurer and director of a self managed association.
MaxB4
(California)

Posts:1614


08/12/2021 4:14 PM  
My take on the document that was posted is Special Assessments may be authorized by the Board of Directors and approved by the co-owners to include, but not limited to and must be approved by 66 2/3 of co-owners.

Paragraph 9 deals with Assessments, paragraph 10 deals with Special Assessments.
DouglasK1
(Florida)

Posts:1689


08/12/2021 4:23 PM  
Posted By MaxB4 on 08/12/2021 4:14 PM
My take on the document that was posted is Special Assessments may be authorized by the Board of Directors and approved by the co-owners to include, but not limited to and must be approved by 66 2/3 of co-owners.

Paragraph 9 deals with Assessments, paragraph 10 deals with Special Assessments.



My take is paragraph 9 also deals with special assessments. From 9:
the Board shall have the authority to increase the general assessments or to levy such additional assessment or assessments as it shall deem to be necessary

I take "additional assessments" to be special assessments, i.e. not included in the annual budget or the normal annual assessment.

Paragraph 10 has this:
Special assessments / in addition to those authorized in subparagraphs 9 (a) through (d) above ..

This also says that paragraph 9 includes special assessments.

I think the $1500 amount that Wendy is referring to only applies to additions/improvements, not maintenance (painting, for example). Since painting is not an "addition", the $1500 limit would not apply.

Escaped former treasurer and director of a self managed association.
JohnC46
(South Carolina)

Posts:11667


08/12/2021 4:43 PM  
Our docs allow the BOD to increase Yearly assessments (Yearly Dues), 1st of the New Year at budget time, as much as need to make for a balanced budget. We once did a 40% increase.

Any Special Assessments would need to be approved by 2/3rds of our owners.

Do not confuse Yearly Assessments (Yearly Dues) with Special Assessments as many do.
MaxB4
(California)

Posts:1614


08/12/2021 4:48 PM  
Posted By DouglasK1 on 08/12/2021 4:23 PM
Posted By MaxB4 on 08/12/2021 4:14 PM
My take on the document that was posted is Special Assessments may be authorized by the Board of Directors and approved by the co-owners to include, but not limited to and must be approved by 66 2/3 of co-owners.

Paragraph 9 deals with Assessments, paragraph 10 deals with Special Assessments.



My take is paragraph 9 also deals with special assessments. From 9:
the Board shall have the authority to increase the general assessments or to levy such additional assessment or assessments as it shall deem to be necessary

I take "additional assessments" to be special assessments, i.e. not included in the annual budget or the normal annual assessment.

Paragraph 10 has this:
Special assessments / in addition to those authorized in subparagraphs 9 (a) through (d) above ..

This also says that paragraph 9 includes special assessments.

I think the $1500 amount that Wendy is referring to only applies to additions/improvements, not maintenance (painting, for example). Since painting is not an "addition", the $1500 limit would not apply.



So that I understand this properly, if the board wanted to install a entrance monument, where one never existed, costing $2000.00, that would require a vote of the co-owners, but a painting project, which money should have been set aside, costing $100,000 can be approved solely by the Board of Directors?
DouglasK1
(Florida)

Posts:1689


08/12/2021 7:32 PM  
That's how I read it. I agree that associations should have the foresight to plan ahead for regular maintenance rather than having a special assessment, but from reading here, plenty don't.

Escaped former treasurer and director of a self managed association.
MaxB4
(California)

Posts:1614


08/12/2021 8:00 PM  
Posted By DouglasK1 on 08/12/2021 7:32 PM
That's how I read it. I agree that associations should have the foresight to plan ahead for regular maintenance rather than having a special assessment, but from reading here, plenty don't.



So, in your opinion, does a special assessment require a membership vote?
DouglasK1
(Florida)

Posts:1689


08/13/2021 7:14 AM  
Posted By MaxB4 on 08/12/2021 8:00 PM
Posted By DouglasK1 on 08/12/2021 7:32 PM
That's how I read it. I agree that associations should have the foresight to plan ahead for regular maintenance rather than having a special assessment, but from reading here, plenty don't.



So, in your opinion, does a special assessment require a membership vote?



My take is a membership vote is required for a special assessment for reasons enumerated in 10 (a), (b), or (c). Not for 9 (a-d).

Escaped former treasurer and director of a self managed association.
WendyZ
(Michigan)

Posts:6


08/13/2021 8:13 AM  
So should the membership vote be the board or the co-owners?
DouglasK1
(Florida)

Posts:1689


08/13/2021 8:29 AM  
Posted By WendyZ on 08/13/2021 8:13 AM
So should the membership vote be the board or the co-owners?



The snippet you posted is written in legalese, and as far as I recall no posters here claim to be lawyers, so take any advice here including mine with a grain of salt. My opinion is that the painting would fall under paragraph 9, subparagraph (b) and would not require an owner vote. A board decision should be enough. If you are unsure about advice from strangers in the internet, consulting the association attorney could be warranted.

Escaped former treasurer and director of a self managed association.
MaxB4
(California)

Posts:1614


08/13/2021 8:35 AM  
The approval of the Special Assessment should have been by the Owners.

MaxB4
(California)

Posts:1614


08/13/2021 8:42 AM  
Posted By DouglasK1 on 08/13/2021 8:29 AM
Posted By WendyZ on 08/13/2021 8:13 AM
So should the membership vote be the board or the co-owners?



The snippet you posted is written in legalese, and as far as I recall no posters here claim to be lawyers, so take any advice here including mine with a grain of salt. My opinion is that the painting would fall under paragraph 9, subparagraph (b) and would not require an owner vote. A board decision should be enough. If you are unsure about advice from strangers in the internet, consulting the association attorney could be warranted.



Section 9 deals only with assessments, whether monthly, quarterly or annual. If their monthly assessment was $100.00, by all mean, the Board should be able to raise it $20.00 a month on their own.

Section 10 deals specifically with a Special Assessment, for large dollar projects, such as painting the exterior of buildings. This would normally be paid out of a reserve account and no vote by owners would have been necessary. The association apparently doesn't have the funds and needs owner approval before moving forward.
AugustinD


Posts:1937


08/13/2021 8:47 AM  
Posted By DouglasK1 on 08/13/2021 7:14 AM

My take is a membership vote is required for a special assessment for reasons enumerated in 10 (a), (b), or (c). Not for 9 (a-d).
Posted By WendyZ on 08/13/2021 8:13 AM
So should the membership vote be the board or the co-owners?
When an assessment pursuant to 10 (a), (b), or (c) is sought, the co-owners must vote on it as described in 10.

But the assessment you described in your first post is consistent with what is in 9. For situations described in 9, no co-owner vote is required.

In short, I agree with DouglasK1. I do not agree with MaxB4.


Note to HOATalk readers: Michigan HOA/COA bylaws tend to include sections that in other states, are a part of the CC&Rs.
MaxB4
(California)

Posts:1614


08/13/2021 8:50 AM  
Posted By WendyZ on 08/13/2021 8:13 AM
So should the membership vote be the board or the co-owners?



How much was the painting project?
WendyZ
(Michigan)

Posts:6


08/13/2021 8:53 AM  
We did not have enough monies in the reserve account and therefore, the board elected a special assessment. I believe we should have had the owners vote on the painting project and the dollar value for the assessment. The Management company is telling the board we do not need any votes, the special assessment can be made by the board.
AugustinD


Posts:1937


08/13/2021 8:58 AM  
Posted By WendyZ on 08/13/2021 8:53 AM
I believe we should have had the owners vote on the painting project and the dollar value for the assessment.
-- Do you think painting the exteriors of the building is maintenance of common areas? If so, the assessment falls under 9, and no co-owner vote is needed.

It is fairly common for HOA/COA Boards to have a lot of leeway when it comes to imposing assessments for common area maintenance. Even the Florida Surfside Champlain Towers South Board had the authority to impose a several hundred thousand dollar assessment on each unit (totalling 15 million dollars) without an ownership vote.
MaxB4
(California)

Posts:1614


08/13/2021 9:00 AM  
I handle implementing special assessments all the time.

A number of CCRs, not Bylaws will spell out the rules for members approval an increase in assessments and special assessments. A typical scenario would be 20% or less for assessments and 5% or less of the total annual expenses of an association for special assessments. A reserve item, such as painting, is not typical maintenance item like fixing a sprinkler head.
WendyZ
(Michigan)

Posts:6


08/13/2021 9:01 AM  
We increased the monthly dues by $25. The assessment is an additional $225 on top of the monhtlies for the next 5 years - a total of $13500.00 per unit.
AugustinD


Posts:1937


08/13/2021 9:13 AM  
Posted By MaxB4 on 08/13/2021 9:00 AM
A reserve item, such as painting, is not typical maintenance item like fixing a sprinkler head.
Doesn't matter. From Bylaw 9 of what WendyZ attached in her first post: "to provide for the maintenance, repair or replacement of existing common elements." Per the rest of Bylaw 9, no ownership vote is required.

MaxB4
(California)

Posts:1614


08/13/2021 9:43 AM  
Wendy,

I do this for a living and based on experience, if I lived in your community and this happened the way you described, I would have the association in court faster than you could shake a stick.
MaxB4
(California)

Posts:1614


08/13/2021 10:07 AM  
This is from a Michigan law firm:

Special Assessments

Similar to additional assessments, there are typically specific circumstances when an association is permitted to levy a special assessment. Condominium bylaws frequently permit the imposition of a special assessment for: (1) providing additions to the Common Elements in excess of a certain amount; (2) assessments to purchase a unit upon foreclosure of the lien (although this is sometimes allowed under the additional assessment powers); or (3) assessments for any other appropriate purpose not elsewhere described. Special assessments differ from additional assessments in that they must usually be approved by a certain percentage of the co-owners before they can be levied. The number of co-owners required to approve a special assessment varies from one association to the next, but approval by at least fifty percent of the co-owners of an association is common. In short, a co-owner should review their condominium bylaws to determine the circumstances in which a special assessment may be levied and whether or not co-owner approval is required.

here is the full article: https://micondolaw.com/2015/09/04/the-differences-between-an-additional-assessment-and-a-special-assessment-in-a-michigan-condominium-association/
WendyZ
(Michigan)

Posts:6


08/13/2021 11:25 AM  
The above article is how I interpreted the bylaws as well and I was afraid of the board not following Michigan law.
AugustinD


Posts:1937


08/13/2021 12:27 PM  
Posted By WendyZ on 08/13/2021 11:25 AM
The above article is how I interpreted the bylaws as well and I was afraid of the board not following Michigan law.
Posted By MaxB4 on 08/13/2021 10:07 AM
In short, a co-owner should review their condominium bylaws to determine the circumstances in which a special assessment may be levied and whether or not co-owner approval is required.

here is the full article: https://micondolaw.com/2015/09/04/the-differences-between-an-additional-assessment-and-a-special-assessment-in-a-michigan-condominium-association/
The OP's Board is complying with its bylaws.
MaxB4
(California)

Posts:1614


08/13/2021 12:38 PM  
Posted By WendyZ on 08/13/2021 11:25 AM
The above article is how I interpreted the bylaws as well and I was afraid of the board not following Michigan law.



How many units in your complex?
WendyZ
(Michigan)

Posts:6


08/13/2021 12:51 PM  
32
MaxB4
(California)

Posts:1614


08/13/2021 1:03 PM  
Again, if a special assessment to add a new monument at the enterance that costs over $1500.00 requires 66 2/3 owners approval, wouldn't it be fair to assume that a painting project needing $432,000 of funding would also require the same approval?

Nothing in section matters except the type of things special assessment can be used for. Section 10, Special Assessment clearly state, a special assessment may be made by the Board and approved by the owners presenting more than 66 2/3 of the co-owners.

Again, if a co-owner took the association to court they would win.

Has the special assessment been implemented? If the Board didn't seek legal counsel and relied soley on the PM, as VP I would be doing my fiduaiary duty and going to the Association lawyer for confirmation.
AugustinD


Posts:1937


08/13/2021 1:26 PM  
Posted By MaxB4 on 08/13/2021 1:03 PM
Again, if a special assessment to add a new monument at the enterance that costs over $1500.00 requires 66 2/3 owners approval, wouldn't it be fair to assume that a painting project needing $432,000 of funding would also require the same approval?
Of course not. The new monument is not even mentioned in the covenants (bylaws in Michigan?), so adding the monument would require an amendment. The Board's responsibility to maintain the common elements is manifest in the covenants (bylaws in Michigan?). No consent of the owners is needed.

You can apply your reasoning to what Florida statutes (and certain other states' statutes) say that limit, to some extent, the amount of assessments and special assessments, and you'd also be wrong.

I do not think the OP understands the language of covenants. But if she wants, sure, go ahead and ask the board to consult with the HOA/COA attorney.
MaxB4
(California)

Posts:1614


08/13/2021 1:30 PM  
Wendy

There you have it. Please conduct with an attorney, who has more common sense than...well..
MaxB4
(California)

Posts:1614


08/13/2021 1:40 PM  
Wendy

I just finished getting a special assessment approved to repair all the roofs in a complex in addition to replacing the underlayment. It was a $800,000.00 project that the association didn't have in their reserves. Instead of 5 years, repayment was 15 years at a cost of $9500.00 per unit. Approval had to be a majority of quorum, which by state statues, quorum is set at a majority of members.

Yes, out Boards can raise monthly 20% annually with a vote of owners, anything over requires the same approval as above.

If the board wants to add a monument to their complex, it does not have to be in their covanent to do so. If the costs cross a certain threshold, then owner vote is required.

If Augustin's legal advice satisfies your inquiry, then we are all good here.
JohnC46
(South Carolina)

Posts:11667


08/13/2021 1:44 PM  
My BOD alone could have done what Wendy's association did as our BOD can rise Assessments (Yearly Dues) once a year (beginning of the fiscal year) as much as we want to cover our budget.

In order to do a Special Assessment, we would have to have 66% of all owners approve.

I believe Wendy's docs read similar to ours and they acted accordingly.

I read the link to the MI law firm and their opinion and I believe Wendy's Association followed the law.
MaxB4
(California)

Posts:1614


08/13/2021 1:48 PM  
Posted By JohnC46 on 08/13/2021 1:44 PM
My BOD alone could have done what Wendy's association did as our BOD can rise Assessments (Yearly Dues) once a year (beginning of the fiscal year) as much as we want to cover our budget.

In order to do a Special Assessment, we would have to have 66% of all owners approve.

I believe Wendy's docs read similar to ours and they acted accordingly.

I read the link to the MI law firm and their opinion and I believe Wendy's Association followed the law.



John,

They raised assessments by $25.00 monthly, I am ok with that.

They did a special assessment of additional $225.00 per month. You're ok what that, with just a board vote?
AugustinD


Posts:1937


08/13/2021 1:52 PM  
Posted By MaxB4 on 08/13/2021 1:40 PM
Wendy I just finished getting a special assessment approved to repair all the roofs in a [California] complex in addition to replacing the underlayment. It was a $800,000.00 project that the association didn't have in their reserves. Instead of 5 years, repayment was 15 years at a cost of $9500.00 per unit. Approval had to be a majority of quorum, which by state statues, quorum is set at a majority of members.
Posted By MaxB4 on 08/12/2021 9:54 AM
I'll comment where I have the experience. If it is state specific issues, I'll stick with my home state. Am I an expert on California HOA's, pretty much yes,
Obviously the OP's situation is state and HOA specific. So why are you telling Michigan HOA director WendyZ about what California statutes require?

Requirements for either special assessments, additional assessments or raising the regular assessment mid-fiscal year vary widely from one state to the next.
MaxB4
(California)

Posts:1614


08/13/2021 1:59 PM  
Because her Bylaws specifically state, special assessments require more than 66 2/3% approval, plain and simple. Assessment and Special Assessment are two separate beasts.
AugustinD


Posts:1937


08/13/2021 2:19 PM  
Posted By MaxB4 on 08/13/2021 1:59 PM
Because her Bylaws specifically state, special assessments require more than 66 2/3% approval, plain and simple.
From WendyZ's attachment in her first post:

"Should the Board, at any time determine in its sole discretion, that the assessments levied are or may prove to be insufficient... (b) to provide for the maintenance, repair or replacement of existing common elements... then the Board shall have the authority to increase the general assessments or to levy such additional assessment or assessments as it shall deem to be necessary."

Plain and simple, no co-owners' vote is required.


I think WendyZ has enough information to figure out her next step at this point.
JohnC46
(South Carolina)

Posts:11667


08/13/2021 2:24 PM  
Posted By MaxB4 on 08/13/2021 1:48 PM
Posted By JohnC46 on 08/13/2021 1:44 PM
My BOD alone could have done what Wendy's association did as our BOD can rise Assessments (Yearly Dues) once a year (beginning of the fiscal year) as much as we want to cover our budget.

In order to do a Special Assessment, we would have to have 66% of all owners approve.

I believe Wendy's docs read similar to ours and they acted accordingly.

I read the link to the MI law firm and their opinion and I believe Wendy's Association followed the law.



John,

They raised assessments by $25.00 monthly, I am ok with that.

They did a special assessment of additional $225.00 per month. You're ok what that, with just a board vote?



Max

I do not see the $225.00 per month as a Special Assessment. I see it as an Assessment that expires in association with one ($25) that does not expire. Might this be a semantics issue?
DouglasK1
(Florida)

Posts:1689


08/13/2021 2:27 PM  
Posted By MaxB4 on 08/13/2021 10:07 AM
This is from a Michigan law firm:


here is the full article: https://micondolaw.com/2015/09/04/the-differences-between-an-additional-assessment-and-a-special-assessment-in-a-michigan-condominium-association/



Thanks for the link. Based on this and the document snippet originally provided, it's possible the board should be calling this an "additional assesment" instead of a "special assessement". Functionally, there doesn't appear to be a difference other than the former not requiring a homeowner vote.

Escaped former treasurer and director of a self managed association.
MaxB4
(California)

Posts:1614


08/13/2021 2:29 PM  
Posted By AugustinD on 08/13/2021 2:19 PM
Posted By MaxB4 on 08/13/2021 1:59 PM
Because her Bylaws specifically state, special assessments require more than 66 2/3% approval, plain and simple.
From WendyZ's attachment in her first post:

"Should the Board, at any time determine in its sole discretion, that the assessments levied are or may prove to be insufficient... (b) to provide for the maintenance, repair or replacement of existing common elements... then the Board shall have the authority to increase the general assessments or to levy such additional assessment or assessments as it shall deem to be necessary."

Plain and simple, no co-owners' vote is required.


I think WendyZ has enough information to figure out her next step at this point.



You really need to learn how to separate assessment and special assessment. They have two certain voting mechanisms. Like JohnC's community they can raise assessments all they want, outside of the additions exceeeding $1500.00, with just a board vote.

A special assessment requires a membersip vote, for anything, including additions exceeding $1500.00. JohnC's community has to vote on assessments.

If, by your reasoning, the Surfside condo may not have collapes if their board had voted on their own to raise the $9M to maintain the strucrual intergrity of the buidling.
MaxB4
(California)

Posts:1614


08/13/2021 2:31 PM  
Posted By DouglasK1 on 08/13/2021 2:27 PM
Posted By MaxB4 on 08/13/2021 10:07 AM
This is from a Michigan law firm:


here is the full article: https://micondolaw.com/2015/09/04/the-differences-between-an-additional-assessment-and-a-special-assessment-in-a-michigan-condominium-association/



Thanks for the link. Based on this and the document snippet originally provided, it's possible the board should be calling this an "additional assesment" instead of a "special assessement". Functionally, there doesn't appear to be a difference other than the former not requiring a homeowner vote.



Exactly what is an additional assessment? This is a $225.00 monthly charge, payable over 5 years. That has all the earmarks of a special assessments.
MaxB4
(California)

Posts:1614


08/13/2021 2:40 PM  
Could somebody please define for the audience what a special assessment is for?

I was taught, assessments are to pay for the day to day operations of an HOA. Special Assessments are to pay for capital improvement and large projects that aren't done on a day-to-day basis. Painting your entire complex is not a day-to-day expense, it is long term.

If you utilities, which you use on a day-to-day basis, increase 10% across, that, IMO, would call for an increase in assessments. More day to day irrigation cost increase, pool guy increases his rates, landscaper raises monthly fees.

Paying to replace your roofs every 30 years where you have a shortfall in your reserves would be a special assessment.
AugustinD


Posts:1937


08/13/2021 2:42 PM  
Posted By MaxB4 on 08/13/2021 2:29 PM
Posted By AugustinD on 08/13/2021 2:19 PM
Posted By MaxB4 on 08/13/2021 1:59 PM
Because her Bylaws specifically state, special assessments require more than 66 2/3% approval, plain and simple.
From WendyZ's attachment in her first post:

"Should the Board, at any time determine in its sole discretion, that the assessments levied are or may prove to be insufficient... (b) to provide for the maintenance, repair or replacement of existing common elements... then the Board shall have the authority to increase the general assessments or to levy such additional assessment or assessments as it shall deem to be necessary."

Plain and simple, no co-owners' vote is required.


I think WendyZ has enough information to figure out her next step at this point.



You really need to learn how to separate assessment and special assessment.
Posted By DouglasK1 on 08/12/2021 4:23 PM
Paragraph 10 has this:
Special assessments / in addition to those authorized in subparagraphs 9 (a) through (d) above ..

This also says that paragraph 9 includes special assessments.
AugustinD


Posts:1937


08/13/2021 2:43 PM  
Posted By MaxB4 on 08/13/2021 2:40 PM
Could somebody please define for the audience what a special assessment is for?
Whatever the covenants say it's for.
KerryL1
(California)

Posts:8734


08/13/2021 4:14 PM  
9. "Should the Board...determine... that the assessments levied are insufficient ... (b) to provide for the maintenance...of existing common areas...then the Board shalI have the authority to increase the general assessments or to levy such additional assessment ... as it shall deem to be necessary."

The assessments that were previously levied were insufficient to correctly fund reserves. The Board, therefore, voted to levy an "additional" assessment.

The above quote seems perfectly clear, so I agree with Douglas and Augustin. It doesn't matter whether we think it's "fair" or "OK," it's what Wendy's documents permit. It doesn't matter what we do in CA (Max's turf), but what's in Andy's docs.

Can you tell us, Wendy, what passages in the citations we've seen suggest to you that owners should vote on this?
MaxB4
(California)

Posts:1614


08/13/2021 4:23 PM  
I checked with a HOA attorney friend of mine. The board can increase assessments as they wish without owner approval. Special assessments must be approved by the owners.

Someone please show us where the attached document specifically states "additional assessments"
MaxB4
(California)

Posts:1614


08/13/2021 4:38 PM  
Posted By KerryL1 on 08/13/2021 4:14 PM
9. "Should the Board...determine... that the assessments levied are insufficient ... (b) to provide for the maintenance...of existing common areas...then the Board shalI have the authority to increase the general assessments or to levy such additional assessment ... as it shall deem to be necessary."

The assessments that were previously levied were insufficient to correctly fund reserves. The Board, therefore, voted to levy an "additional" assessment.

The above quote seems perfectly clear, so I agree with Douglas and Augustin. It doesn't matter whether we think it's "fair" or "OK," it's what Wendy's documents permit. It doesn't matter what we do in CA (Max's turf), but what's in Andy's docs.

Can you tell us, Wendy, what passages in the citations we've seen suggest to you that owners should vote on this?



Your argument about Section 9 is mute, they increased assessments by $25.00. Then they did an Special Assessment, not "additional" assessment for $225.00. The very first sentence of Section 10 states, Special Assessments can be made by the Board and approved by the co-owners, and later it spells out the percentage for approval.

My wife who was president of her HOA read Section 10 and within 60 seconds determined the owners are required to pass the Special Assessment.
KellyM3
(North Carolina)

Posts:1811


08/13/2021 4:41 PM  
I agree with Max.

The owners are owed a budget in an annual basis and the board "assesses" them based on this budget. If the regular budget proves insufficient to maintain the property or to allow for expansions under $1,500, the board can change the regular assessment. I think paragraph 9 explicitly gives the board the sole authority to raise regular dues for "regular" operational purposes.

A dedicated vote to raise money for exterior painting is absolutely a "special assessment." As such, the owners should vote on it. It's a capital project due to the perceived large scale of the project.

NOTE: This is spectator sport for us.
KellyM3
(North Carolina)

Posts:1811


08/13/2021 4:42 PM  
EDIT: Over $1,500..
JohnT38
(South Carolina)

Posts:794


08/13/2021 5:02 PM  
Considering how the answers to this post appear to be split my advice to the OP is pay a lawyer in your state and get an answer in writing that you can fall back on.
KerryL1
(California)

Posts:8734


08/13/2021 5:21 PM  
The $1,500 in 9 does not matter-as it's solely for "additional" items and it does not refer to b. Painting a condo building is not a capital improvement, it's not an additive item, it's a reserve component or should be.

But with many others, Wendy should convince her board to consult with their HOA attorney.
DouglasK1
(Florida)

Posts:1689


08/13/2021 5:32 PM  
Posted By MaxB4 on 08/13/2021 2:31 PM
Posted By DouglasK1 on 08/13/2021 2:27 PM
Posted By MaxB4 on 08/13/2021 10:07 AM
This is from a Michigan law firm:


here is the full article: https://micondolaw.com/2015/09/04/the-differences-between-an-additional-assessment-and-a-special-assessment-in-a-michigan-condominium-association/



Thanks for the link. Based on this and the document snippet originally provided, it's possible the board should be calling this an "additional assesment" instead of a "special assessement". Functionally, there doesn't appear to be a difference other than the former not requiring a homeowner vote.



Exactly what is an additional assessment? This is a $225.00 monthly charge, payable over 5 years. That has all the earmarks of a special assessments.



Yes, it sounds a lot like a special assessment, but paragraph 9 calls it an "additional assessment" and does not require homeowner vote.

Escaped former treasurer and director of a self managed association.
MaxB4
(California)

Posts:1614


08/13/2021 5:41 PM  
Posted By DouglasK1 on 08/13/2021 5:32 PM
Posted By MaxB4 on 08/13/2021 2:31 PM
Posted By DouglasK1 on 08/13/2021 2:27 PM
Posted By MaxB4 on 08/13/2021 10:07 AM
This is from a Michigan law firm:


here is the full article: https://micondolaw.com/2015/09/04/the-differences-between-an-additional-assessment-and-a-special-assessment-in-a-michigan-condominium-association/



Thanks for the link. Based on this and the document snippet originally provided, it's possible the board should be calling this an "additional assesment" instead of a "special assessement". Functionally, there doesn't appear to be a difference other than the former not requiring a homeowner vote.



Exactly what is an additional assessment? This is a $225.00 monthly charge, payable over 5 years. That has all the earmarks of a special assessments.



Yes, it sounds a lot like a special assessment, but paragraph 9 calls it an "additional assessment" and does not require homeowner vote.



But the OP stated that the board passed a $25.00 assessments and a $225.00 "special" assessment.

What funding mechanism do you use to fund a capital project, when there is as the OP stated, a "shortfall" in the reserves? $500,000 funding is more than changing a sprinkler head. Have any of you ever had the power to raise $500,000 without a membership vote?
AugustinD


Posts:1937


08/13/2021 5:53 PM  
I consulted seven Michigan HOA attorneys at the Wolverine HOA Legal Advocate forum. All seven are graduates in the top half of their classes of the University of Michigan School of Law. One sits as the "CAI Endowed Chair of Common Interest Community (CIC) Law" at the Thomas M. Cooley School of Law.

The seven Michigan HOA attorneys are unanimous: No vote of the co-owners is required when the additional assessment is for "maintenance, repair or replacement of existing common elements."
AugustinD


Posts:1937


08/13/2021 6:11 PM  
Posted By KerryL1 on 08/13/2021 5:21 PM
But with many others, Wendy should convince her board to consult with their HOA attorney.
Respectfully, I would say, "Wendy can try to convince her board to consult with their HOA attorney." If Wendy is the only one on the board who thinks a co-owner vote is necessary, and if I were a director on her HOA's Board, then I would not support spending money on a HOA attorney's opinion. Why? Because WendyZ has neither explained what wording in the Bylaws makes her think the co-owners have to vote on this assessment, nor has she responded to the polite queries trying to understand why she feels as she does. I do not think spending the owners' money on an attorney in such a situation is appropriate.
MaxB4
(California)

Posts:1614


08/13/2021 6:12 PM  
Posted By AugustinD on 08/13/2021 5:53 PM
I consulted seven Michigan HOA attorneys at the Wolverine HOA Legal Advocate forum. All seven are graduates in the top half of their classes of the University of Michigan School of Law. One sits as the "CAI Endowed Chair of Common Interest Community (CIC) Law" at the Thomas M. Cooley School of Law.

The seven Michigan HOA attorneys are unanimous: No vote of the co-owners is required when the additional assessment is for "maintenance, repair or replacement of existing common elements."



While waiting for dinner, I googled "Wolverine HOA Legal Advocate forum", nothing came up. I then googled "CAI Endowed Chair of Common Interest Community (CIC) Law" at the Thomas M. Cooley School of Law. ", again nothing came up, EXCEPT this https://lawschooli.com/should-i-attend-cooley-law-school/ (Worse law school in America)

AugustinD


Posts:1937


08/13/2021 6:17 PM  
Posted By MaxB4 on 08/13/2021 6:12 PM
Posted By AugustinD on 08/13/2021 5:53 PM
I consulted seven Michigan HOA attorneys at the Wolverine HOA Legal Advocate forum. All seven are graduates in the top half of their classes of the University of Michigan School of Law. One sits as the "CAI Endowed Chair of Common Interest Community (CIC) Law" at the Thomas M. Cooley School of Law.

The seven Michigan HOA attorneys are unanimous: No vote of the co-owners is required when the additional assessment is for "maintenance, repair or replacement of existing common elements."



While waiting for dinner, I googled "Wolverine HOA Legal Advocate forum", nothing came up. I then googled "CAI Endowed Chair of Common Interest Community (CIC) Law" at the Thomas M. Cooley School of Law. ", again nothing came up, EXCEPT this https://lawschooli.com/should-i-attend-cooley-law-school/ (Worse law school in America)

MaxB4, are you all right?

Give the forum the name of the attorney you talked to, please.

Oops. No can do? Then I also cannot share the names of my seven attorney acquaintances from the subscription-only, removed-from-all-search-engines site. But really, I have doxed their individual names. They all check out, except six of them say their buddy in the endowed chair is a showboat and do not take her too seriously.

By the way, former Counsel to the President Michael Cohen graduated from the Cooley Law School. So there.
MaxB4
(California)

Posts:1614


08/13/2021 6:42 PM  
Wendy

You might find this interesting reading: http://www.zdfattorneys.com/blog/michigan-court-appeals-rules-condo-association-invalidates-special-assessment-fund-litigation-without-co-owner-vote-contrary-bylaws/
AugustinD


Posts:1937


08/13/2021 6:58 PM  
Posted By MaxB4 on 08/13/2021 6:42 PM
http://www.zdfattorneys.com/blog/michigan-court-appeals-rules-condo-association-invalidates-special-assessment-fund-litigation-without-co-owner-vote-contrary-bylaws/
It is interesting reading. I would have ruled as the appeals court ruled and as the Bylaws made clear: A special assessment to fund a lawsuit requires a vote of the owners.
JohnC46
(South Carolina)

Posts:11667


08/14/2021 9:55 AM  
Posted By MaxB4 on 08/13/2021 2:29 PM
Posted By AugustinD on 08/13/2021 2:19 PM
Posted By MaxB4 on 08/13/2021 1:59 PM
Because her Bylaws specifically state, special assessments require more than 66 2/3% approval, plain and simple.
From WendyZ's attachment in her first post:

"Should the Board, at any time determine in its sole discretion, that the assessments levied are or may prove to be insufficient... (b) to provide for the maintenance, repair or replacement of existing common elements... then the Board shall have the authority to increase the general assessments or to levy such additional assessment or assessments as it shall deem to be necessary."

Plain and simple, no co-owners' vote is required.


I think WendyZ has enough information to figure out her next step at this point.



You really need to learn how to separate assessment and special assessment. They have two certain voting mechanisms. Like JohnC's community they can raise assessments all they want, outside of the additions exceeeding $1500.00, with just a board vote.

A special assessment requires a membersip vote, for anything, including additions exceeding $1500.00. JohnC's community has to vote on assessments.

If, by your reasoning, the Surfside condo may not have collapes if their board had voted on their own to raise the $9M to maintain the strucrual intergrity of the buidling.




To make it clear. My BOD can raise the Annual Assessment (monthly dues) as much as it wants but only one time a year effective 01/01 and there is a procedure. Any Special Assessment must be approved by 2/3rds of our owners.
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