HOA emergency special assessment in the amount $4000.00 dollars!!

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Submitted by The-Shoveler on April 6, 2016 - 8:58am

We just got a notice from the HOA for an emergency special assessment in the amount $4000.00 dollars for all units yikes!!

Can they (the board) just declare this without a vote by all the home owners?

Thanks.

Submitted by spdrun on April 6, 2016 - 8:59am.

If it's a single-family, that's what one gets for buying in an HOA-infected area. Pay it, sell the place, move to a non-infected area.

Submitted by The-Shoveler on April 6, 2016 - 9:00am.

This is a Condo

Submitted by sdsurfer on April 6, 2016 - 9:11am.

The answer to whether or not they can is probably in the HOA docs you should have received when you bought the place. I'm sure most people do not read those though. Most HOA's you vote for the board then they vote on your behalf. Good luck!

Submitted by The-Shoveler on April 6, 2016 - 9:30am.

Thanks sdsurfer This is a fairly large complex so we are talking take the money and move to brazil type money.

Not saying that is what is happening but this is millions of dollars.

I will go through the Doc's again.

Submitted by NotCranky on April 6, 2016 - 9:45am.

Happens all the time. My in-laws just had it for new roofs, another friend a large assessment to redo plumbing in the entire building.

I am sure you will find that it is allowable. 4k isn't that much towards construction projects per unit.

Did they say what it is for?

Condos are not necessarily for the budget conscious.

Submitted by The-Shoveler on April 6, 2016 - 9:56am.

roofs and some structural repairs.

Just seems like the $400+ dollars dues a month should cover that type maintenance stuff gee whiz.

Submitted by NotCranky on April 6, 2016 - 10:08am.

Sorry, it would be a big disappointment to find that out.

I don't know the audit rules but something is required as part of an HOA and maybe "special audits" can be demanded too. My MIL has been president of a HOA in a pretty high end detached home community and also on the Architectural review board. She says this stuff can get pretty heated at times. Don't be shy about making them show you what's going on , somebody has to do it, or maybe they will go to Brazil with your money.

Submitted by The-Shoveler on April 6, 2016 - 10:15am.

Thanks Blogstar,

Yep will do that.

Submitted by SK in CV on April 6, 2016 - 10:22am.

Blogstar wrote:
Sorry, it would be a big disappointment to find that out.

I don't know the audit rules but something is required as part of an HOA and maybe "special audits" can be demanded too. My MIL has been president of a HOA in a pretty high end detached home community and also on the Architectural review board. She says this stuff can get pretty heated at times. Don't be shy about making them show you what's going on , somebody has to do it, or maybe they will go to Brazil with your money.

There probably isn't even any reason for a special audit. Most HOA's have annual audits, and though the quality of the auditing work is problematic at best, that doesn't mean the numbers are necessarily unreliable. They also often include a reserve study. The reserve study will indicate how much should be in reserves. Some associations are fully funded to those recommended reserves. Some aren't. Additionally, shit happens. We know that. It happens all the time. Just because a roof should last 20 years (or 40, or whatever), sometimes that doesn't happen. It doesn't mean the audit was bad. It doesn't mean the reserve study was bad.

Submitted by ucodegen on April 6, 2016 - 11:17am.

Blogstar wrote:
Sorry, it would be a big disappointment to find that out.

I don't know the audit rules but something is required as part of an HOA and maybe "special audits" can be demanded too. My MIL has been president of a HOA in a pretty high end detached home community and also on the Architectural review board. She says this stuff can get pretty heated at times. Don't be shy about making them show you what's going on , somebody has to do it, or maybe they will go to Brazil with your money.


Take a look at the Davis Stirling act.

https://en.wikipedia.org/wiki/Davis%E2%8...

http://www.davis-stirling.com/MainIndex/...

Under assessments: if the assessment is more than 5% of the annual budget, it must be approved by the membership.

Looks like the $4000 had to be approved by membership - unless meets the grounds for emergency assessments.

Your HOA should also be sending you an annual budget report:
http://www.davis-stirling.com/MainIndex/...

Statute: -linked pages
http://www.davis-stirling.com/MainIndex/...

Statute: PDF
http://epsten.com/wp-content/uploads/201...
http://static1.squarespace.com/static/52...

Submitted by FlyerInHi on April 6, 2016 - 11:32am.

If your condo is old, or near the coast where moisture is an issue, $4000 is about right.

Submitted by The-Shoveler on April 6, 2016 - 11:44am.

Thanks ucodegen

The roofs are old so I am thinking that should have been in the budget as it was (400+ per month),

There was nothing that looked like a real emergency situation that would cost that much.

Got to go through all of this but there was no meeting no nothing just a notice we had to pay this by July etc...

Seems kind of arbitrary and made up.

Submitted by ucodegen on April 6, 2016 - 12:27pm.

The-Shoveler wrote:
Thanks ucodegen

The roofs are old so I am thinking that should have been in the budget as it was (400+ per month),

There was nothing that looked like a real emergency situation that would cost that much.

Got to go through all of this but there was no meeting no nothing just a notice we had to pay this by July etc...

Seems kind of arbitrary and made up.


There should be some sort of accounting for it and what it is to be used for. There should also be yearly budget reports sent to all the residents - per California code (Davis Stirling Act placed it in California Civil Code) section 5300 and 4525(a)(4) - see also section 4530(a) involving required requests of the HOA for documents by any of the homeowners. 5300(a)(5) refs special assessments; should be on the annual budget that is sent out. Also check section 5605 - prerequisites to levying assessment increases and special assessments. 5605(b) shows vote is required on greater than 5% special assessment. 5605(c) indicates that a quorum is required on vote.

--Just pointing out things to look at in Davis Stirling.

Submitted by Dukehorn on April 6, 2016 - 12:30pm.

If you haven't been going to the HOA meetings, I think you'd be hard-pressed to make the assumption that it was arbitrary and made up. How often are your HOA meetings and have you been attending? Go back to the minutes and see when and why the vote occurred.

I'm in a small complex and it turns out that our HOAs have not been keeping up with the budget for the past 8 years before I moved in. We voted out the old board and voted in folks with a finance background to try to get the budget back in line. Without raising monthly HOAs, our reserve is 25k in the hole per unit (and that's without considering emergency/unexpected repairs).

Unless the HOA is building a spa with that money (which has happened at a friend's complex), usually the assessments deal with practical issues that are not fully funded at the time.

Submitted by bearishgurl on April 6, 2016 - 12:43pm.

I've seen special assessments of up to $7K per unit imposed by condo assns and I don't recall that any owners were legally able to get out of them.

Shoveler, your HOA dues at $400 month seem high to me as well. Over a year ago, when I was investigating purchasing a condo for my youngest kid (+ 2 roommates) to live in while attending university in LA County, I did find that two of the complexes I was considering had monthly dues of over $400 month but they had a LOT of amenities for the residents and their landscaping was pretty elaborate. I came to the conclusion that this amount was too much cuz the kids were too busy to care about "amenities" or landscaping. Hopefully, you also have a lot of amenities for your $400 month dues and are not paying MR on top of that.

When you factor in the HOA dues, possible MR, certain special assessments at a future date, and the fact that you don't own any actual land when you buy a condo (or own a substd 1800-3800 sf "lot" with a PUD), they just don't seem like much of a good deal. This is because a buyer can often get a SFR in the same area with an attached 2-car garage and with the same or greater sf as a condo for just $50K-$150K more than the condo and own the (often generous) lot it sits on! A SFR owner (w/no HOA) can also make improvements as they see fit and at a price they negotiate themselves.

This thread illustrates one of the biggest reasons why I don't like condos. I like to "control" my own property myself :=0

Submitted by FlyerInHi on April 6, 2016 - 12:43pm.

Dukehorn, could you please post the process of replacing the board? I would like to do that.

Submitted by The-Shoveler on April 6, 2016 - 1:35pm.

There was a meeting where the board voted on it but there was no notice sent to vote on the issue, something of this magnitude should have been voted by Mail by all members IMO.

But I need to think this through as well as it maybe bread on the water.

Submitted by no_such_reality on April 6, 2016 - 5:23pm.

Is the roof repair project already under way?

I lived in a complex of duplex town homes. Typical wood frame 70s construction with shake roofing. This is back in 2000, his was mid-200s, reserve was in excess of $10k per unit in reserve up to date and it wasn't enough after the grand gaming was done. We forked out an additional $4k plus special assessment for unanticipated "u foreseeable" damage beyond sample home test Bs

Final roofing bill to replace shake with asphalt shingles totaled about $30-35k per duplex which amounted to a roof on a two story 3000 sf house

Really seemed excessive. And IMHO standard HOA market seems to be 100% over private owner price

Submitted by The-Shoveler on April 6, 2016 - 5:48pm.

NSR yea, I think it is the same sort of C$#P that happens quite a bit with property managers (got to be some kick back going somewhere). Really tough to find an honest one.

With Condo's I think it is quite common unfortunately.

To be honest after cooling down I am thinking it is not really such bad deal this time, should end up being a positive.

But that said I think it was very shady how it got done.
(kind of like congress LOL).

Submitted by no_such_reality on April 6, 2016 - 8:16pm.

Yea, it's really doesn't seem very up and up. Basically, the board has some rules. To be advised on the rules they hire a prop mgmt firm that usually collects the fees, and advises while referring everything to lawyers. When it comes time to go out to bid for repairs of maintenance, they advise the board needs multiple bids. Note, multiple, not necessarily competitive. Of course, the prop mgmt firm act manager has a collection of firms they can refer. Not much governance on that relationship.

Submitted by bobby on April 6, 2016 - 9:36pm.

I almost bought into an HOA/Condo 2 years prior. the story of that place was 3 months prior, there was EXTENSIVE work being done to beautify the place. the cost was some $15,000 to each owner. the plus side was the work was very good. Never bought the place though.

Submitted by njtosd on April 6, 2016 - 11:47pm.

no_such_reality wrote:
Is the roof repair project already under way?

I lived in a complex of duplex town homes. Typical wood frame 70s construction with shake roofing. This is back in 2000, his was mid-200s, reserve was in excess of $10k per unit in reserve up to date and it wasn't enough after the grand gaming was done. We forked out an additional $4k plus special assessment for unanticipated "u foreseeable" damage beyond sample home test Bs

Final roofing bill to replace shake with asphalt shingles totaled about $30-35k per duplex which amounted to a roof on a two story 3000 sf house

Really seemed excessive. And IMHO standard HOA market seems to be 100% over private owner price

I know this sounds cynical, but I truly believed the HOA officers for our first house in SD were in it just to send work to their friends and my guess is they were reimbursed in kind. The worst is if there is litigation involved and fees start spiraling out of control. No HOAs for us anymore ....

Submitted by ucodegen on April 7, 2016 - 1:16am.

The-Shoveler wrote:
There was a meeting where the board voted on it but there was no notice sent to vote on the issue, something of this magnitude should have been voted by Mail by all members IMO.

But I need to think this through as well as it maybe bread on the water.


Per Davis-Sterling, a quorum of the homeowners had to be present on such a vote. The board can not pass a special assessment that exceeds 5% of the yearly assessed fees without a homeowner vote with enough homeowners there to make a quorum (50% of homeowners).

Submitted by Dukehorn on April 7, 2016 - 10:27am.

If the assessment was an "emergency" then the Davis-Sterling voting requirement does not apply (from my understanding).

Also, if it was an emergency, then the issue of taking multiple bids is questionable due to time issues.

If one unit has a leaky roof, you can do a short-term patch but if multiple units were having problems, that might be enough to push it into an emergency replacement. Should be in the minutes though.

We changed our board at a normal election for all the seats. Nothing special. One guy had been a dictator for awhile, was afraid to raise the HOA, so we were spending more than taking in. Reserves were pathetic so we had to blindside him to get some changes. If you have an elevator in your complex, then $500 dues are not unexpected. $400 seems to be market rate. In DC HOA's were hitting that in the late 90s. Units with doormen, fancy gyms have HOAs in the $700-1000 range.

At least in my building, being on the board is a thankless job. Kind of odd to talk about Brazil money when the money is held in escrow by your management company. This isn't the Wild West, CA has plenty of regulations re: HOA management.

Submitted by spdrun on April 7, 2016 - 12:13pm.

As far as the $700-1000 range of HOAs, are we talking about HOA only in DC, or HOA with taxes included i.e. a co-op? $1000/mo for just HOA seems high even with a gym. Keep in mind that a very good gym membership, in NYC costs about $80/mo. That's with a pool, multiple gyms, etc.

Doorman adds maybe $100/mo (in NYC), but many doorman buildings are newer, so they have a parking garage downstairs that's rented out to offset the HOA dues.

BTW - in San Diego, for a 1/1, no elev, no doorman, but with pool, paying under $250/mo, and reserves are actually increasing.

Submitted by Dukehorn on April 8, 2016 - 2:39pm.

For the HOA range, I think the DC and SF market are similar. DC was awhile ago for me but I have friends in SF highrises and I think their HOAs are ridiculous.

https://www.redfin.com/CA/San-Francisco/...

$842/month for a 837 square foot condo. (doesn't look like tax included in the HOA description).

https://www.redfin.com/CA/San-Francisco/...

$1,056/month in a brand new building 1b/2ba condo.

Submitted by FlyerInHi on April 8, 2016 - 2:57pm.

njtosd wrote:

I know this sounds cynical, but I truly believed the HOA officers for our first house in SD were in it just to send work to their friends and my guess is they were reimbursed in kind. The worst is if there is litigation involved and fees start spiraling out of control. No HOAs for us anymore ....

I agree... it can be bad sometimes.
In Vegas, there was an FBI investigation and conviction of high profile figures and lawyers for gaining control of HOA boards and defrauding the associations.

http://lasvegassun.com/news/2015/may/11/...
https://storify.com/ReviewJournal/hoa-scam

Submitted by svelte on April 10, 2016 - 8:59am.

I have dealt with and been in hoa boards for many moons. Some truth in what everyone on here says. It is a thankless job that can be very time consuming. For that reason, my experience is that folks on the board are there for one of the following reasons:
1. They are concerned about their neighborhood and want to help (yes there are some good ppl on boards)
2. They have a pet issue that they want to have a voice in addressing (this is quite common).
3. They are retired and want something to do.
4. They like being in control.
5. They want to award the contracts to friends/family (i had to call a board member out on this and was successful in getting the rest of the board to see what was happening)
With a good board i think hoas are a very positive thing for a neighborhood. The best maintained, best looking areas are almost always in hoas. The problem arises when you get a majority on the board with less than noble intent.

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