HOA Fees

do you have a copy of your covenants? Check to see how much the dues can be raised. Ours says up to 115% can be done by the Board.

Special Assessment - did they get the necessary votes for that? for us to do one we need 2/3 affirmative - 141 affirmative votes. You dont think that is too har duntil you consider that 70% of ours are overseas owners.... We have been running around the neighborhood and emailing for weeks....

Jeff,

WOW! The Board can raise the annual assessments by 115% without a membership vote? My Association is limited to 5% without a membership vote.

Diane,

It's possible that your Association completed a reserve study and identified that the reserves are underfunded. Therefore, the board is attempting to remedy that issue.

As others have said, as long as the procedures outlined in your governing documents were followed, then the Board would have the authority to do this.

You may want to ask for past minutes of the Board meetings to see if this issue was being discussed prior to your purchase (I expect that it was). Then compare this to any document the Association may have completed in your buying process. If they were asked if special assessments were being planned and lied on a document, you might have an actionable item. However, it won't prevent the increase or special assessment from happening or your requirement to pay it.

Diane,

A quick check of the DE UCIOA did not reveal any limitation on the annual assessment increase nor could I see a section on special assessments. I would suggest a thorough review of your CCRs to see if there is a limit on how much the assessment can be raised during a given year. Copied below is the applicable section of the UCIOA which states a special assessment requires a vote of the members and the annual budget must be ratified by the members. Depending upon the number of members in your assn, a special assessment of $188,500 could be quite sizeable for each member.

§ 81-324. Adoption of budget.

(a) The executive board shall, at least annually, prepare a proposed budget for the common interest community. In a condominium or cooperative, the proposed budget shall include a line item for any required funding of a repair and replacement reserve. Within 30 days after adoption of any proposed budget after the period of declarant control, the executive board shall provide to all unit owners a summary of the budget, including any reserves and a statement of the basis on which any reserves are calculated and funded. Simultaneously, the executive board shall set a date for a meeting of the unit owners to consider ratification of the budget not less than 14 nor more than 60 days after providing the summary. Unless at that meeting a majority of all unit owners or any larger vote specified in the declaration reject the budget, the budget is ratified, whether or not a quorum is present. If a proposed periodic budget is rejected, the periodic budget last ratified by the unit owners must be continued until such time as the unit owners ratify a subsequent budget proposed by the executive board.

(b) In addition to adoption of its regular periodic budget, the executive board may at any time propose a budget which would require a special assessment against all the units. Except as provided in subsection (c) of this section, the special assessment is effective only if the executive board follows the procedures for ratification of a budget described in subsection (a) of this section and the unit owners do not reject that proposed special assessment.

(c) If the executive board determines by unanimous vote that the special assessment is necessary in order to respond to an emergency, then: (i) the special assessment shall become effective immediately in accordance with the terms of the vote; (ii) notice of the emergency assessment shall be promptly provided to all unit owners; and (iii) the executive board shall spend the funds paid on account of the emergency assessment solely for the purposes described in the vote.

Roger,

I believe you hit the nail on the head. The way to plan is to complete a reserve study and adjust assessments, expenses or both to meet the reserves. This plan should then be reviewed every year (to account for inflation) and completely redone every 5 years.

Tim

Hi Mary,

Thank you so much for your very thorough reply. I am so grateful for all the responses. Since we just closed on the condo, we are very new to this and just so taken aback by an 80% increase. I have reviewed the Convenants and there is no mention of any percentage for Annual Assessments. They presented the Budget in addition to the Special Assessment. There was 123 units in attendance. There is a total of 550 units. All 123 Units in attendance voted "No" but they said that whoever did not attend are considered to have Voted "Yes". Not sure Why the vote.

The builder is finished building by the end of 2010. He has owned the property for the past 15 years and has never raised HOA dues by such a percentage. Now it is turned over to this Board and they decided it doesn't live up to their standards. This place is outstandingly beautiful. We must have missed all the sub-standard amenities when we decided to buy.

Diane,

Counting any unvoted ballots as "yes" is certainly not proper and I doubt it is allowed by your bylaws. When a mortgage co is required to vote on an amendment if they do not send in a ballot it can be counted as a yes vote; however, that will be stated in the CCRs. But, counted unvoted member votes as "yes" is certainly not proper.

Developers are notorious for keeping the assessments low so it is not unusual for the first member board to have to raise them. However an increase of 80% does sound quite high even though it may be justified. A look at the budget for 2011 should tell you whether or not it is. It could be that the developer never put anything into a reserve fund either. One other thing, some CCRs or perhaps state laws,require the developer to make up any shortfalls in the operating budget which would also account for increased expenses once the members take over.

Our developer started with everyone at $170 in 2004. After we became a owner owned HOA review of our CC&R we found out that we had to tier HOA payments and additionally when reviewing our cost we had to substantially raise our rates. By 2006 I was paying $280 and after our reserve study in 2007 up to now I'm paying $352. We have no ammenities on our property but we started with a 10 year old townhome complex with no reserves and now have 20K which is still not enough.

I wish there was some sort of law requiring developers to truly and accurately forecast and indicate true HOA fee's.

Diane:

Just curious what were your charges before this increase?

And the new amount you are paying?

As to the number of no shows at your meeting. Is this a year round community for most residents? Or do you have many seasonal owners that use this for the Summer as their residence?

Your area and Rehobeth, Ocean City have many seasonal owners who for the most part don't involve themselves much in the operation of the property when they should.

Tough to get some involved when they reside for most of the year elsewhere.