Welcome Chad,
You have a lot of questions in one posting so let me see if I can help provide some answers.
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Posted By ChadW on 03/18/2011 2:06 AM
If the Board of the Home Owners Association(HOA) have free reign over which projects get the OK,
Unless your governing documents specify certain items needing membership approval, the Board of Directors would have full authority to run the Association as they see fit providing that they are complying with State and Federal laws. Only your governing documents (and occasionally State laws) limit the power of the Board.
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Posted By ChadW on 03/18/2011 2:06 AM
what's to stop them from running the communities funding into the ground to the point nothing can be payed for (Utilities, maintenance, insurance...etc)?
The membership can always recall a board. However, this typically requires a major crises and a lot of membership involvement. The best way to minimize a spending spree is to make sure that the membership is not apathetic. The membership can only elect those who are willing to volunteer. Unfortunately, sometimes there just isn't enough volunteers to offer the membership a choice. Perhaps you will offer to serve on the Board at your next annual meeting.
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Posted By ChadW on 03/18/2011 2:06 AM
As is, with normal dues and special assessments, I am paying roughly $520.00 for a 2 bed, 787sq. ft. Condo Unit in the Renton, Washington area in addition to my Mortgage, and the H.O.A. Board are strongly considering in raising the dues and adding more to the Special Assessments to pay for residing all the condo units.
As you are probably aware, condos typically have higher assessments than single family homes. This is mainly due to the amount of common area that needs to be maintained. For single family homes, this usually includes roads and landscaping. Condos typically have those items plus the building itself.
Sometimes current boards must address the consequences of the decisions of previous boards. If previous boards chose to keep assessments low, thereby not fully funding the reserve funds, then when the work is required the current board must find a way to pay for it. Typically through special assessments. My own Association, after 30 years, just completed it's first reserve study which indicated a need to raise assessments 20%. Why so high? Because our previous boards thought 50K was plenty for a reserve fund but never did a study to find out, so when the balance hit that amount assessments were not raised.
When was your Associations last reserve study? It's possible that you happened to purchase at a time the work was scheduled to be done. It's also possible that laws changed requiring certain upgrades.
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Posted By ChadW on 03/18/2011 2:06 AM
Now to me, something fishy is going on cause there are already over 35% of the home owners of the community already not paying the dues or the special assessments for whatever their reasons.
This is another problem. With that high of a delinquency rate, the money to pay the bills, repairs, etc. must come from somewhere. Typically the only revenue for an Association is the annual assessments. If the units are going into foreclosure, it's highly possible that the Association will collect only a little or perhaps none of what is owed. As you said, you are unaware of the reasons why. Have you attended Board meetings to find out?
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Posted By ChadW on 03/18/2011 2:06 AM
No one can sell their units due to many factors including down economy, dues, aged buildings....
Yep, mortgage companies are now not only looking at the borrower but at the Association itself. The lenders want to know if the Association is solvent, that the buildings are kept up, etc. FHA guidelines have also started requiring that Associations be financially stable. Add the economy on top of that and it becomes very difficult to sell.
Perhaps with your Board repairing the aged buildings and getting the development looking good, potential buyers will be more willing to purchase in your development. Have you asked your Board why they are repairing the items now vs. later?
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Posted By ChadW on 03/18/2011 2:06 AM
Hell, what's to stop certain board members from making deals with contractors, developers, Property Management, or other entities that cripple an entire community into a mandatory federal/state enforced foreclosure? This is hypothetical of course, but not impossible.
Only an active membership who cares enough to volunteer and get involved. Only those willing to step forward can make any real change. Only a membership willing to ask questions of the Board, attend Board meetings (not just the annual meeting) and committee meetings to see how and why things are happening will provide checks and balances.
Remember, the Board Members who are complained about were usually elected to that position by the membership. Only the membership, or their decision to no longer serve, will remove/replace them.
I know that this isn't necessarily what you wanted as an answer. Sorry about that.
Tim