HOA Pres Ignoring My Request for Financials

I should have added....

I keep hearing about "management companies". Do all HOA's have them? I've never heard speak of it here.

Debbie

Typically associations will put money aside for several reasons.

1. Capital Reserves for planned on future expenses such as roof replacement. 30 roofs, $3,000.00 each ($90,000.00 total), needed to be replaced in 20 years so $4,500.00 per year ($375.00 per month) must be set aside for the next 20 years so you have the $90,000.00 20 years from now.

2. Capital Improvements for things we would like to do when we have the money saved, like paving that dirt lot.

If no money set aside then when it is needed there basically are two ways to get it:

1. A one time assessment. We need $90,000.00 to replace 30 roofs, the assessment will be $3,000.00 per unit, one time payment, due now.

2. Borrow the money and raise monthly dues to pay it back. Like a car loan.

Rough rule of thumb is 15-20% of dues set aside for Capital Reserves.

All you need to see is the Yearly Financial Report. This will tell you if there are any set aside reserves.

Bottom line is it sounds like your association has no Capoital Reserve nor Capital Improvement funds set aside. If so, you association is in financial trouble.

Hope this helps.

Debbie, doesn't your HOA have a Board of Directors? Or is it possibly only the president? What size is your HOA? Attached homes, or?

Yes, Tim, I was reading that and asked my son about it. The developer turned it over about two years ago. I've been checking listings in that development and the association fees are only $40.00 a month! Now, I do understand that it's a little different, being that those are single family...detached homes...like in a regular subdivision, where the residents pay for all their own outside maintenance, insurance etc.. I don't even necessarily have a huge problem with the monthly amount, IF I could see where the money goes and IF the board were forthcoming with the things I asked for.

This complex was built in 1982. We have 21 units. Amenities? None to speak of. What they call a "clubhouse" is a little room about 20 X 20 with a couple of tables and chairs. There's no kitchen in there, or anything.

One thing I find very odd is that she used to work a job outside the home and I remember her mentioning about the roof needing fixed and that she had "just enough to fix it", then a few weeks later, she tells me that she's doing bookkeeping at home and I don't see her leaving for work anymore like I used to. I just wondered if she lost her job and is dipping into the HOA money.

Debbie,
As another HOA-management professional already pointed out, Colorado law specifically provides that you, as an owner, are entitled to review your Association's financial information, and it may not be withheld from you. It should not be a thorny process to get that info-- a simple request usually is all that is required, but sometimes owners need to submit a written request. Sounds as if you already have done so. The board of directors should make the Association's records available to you within a reasonable time.

Concerning the $$ amount of assessments... It absolutely is not possible to compare one building (or complex) to another and simply assume that the assessment on the one should be roughly comparable to the other, not even if the two properties have the same number of units (or nearly so). For instance, if your project was constructed in the '80s, then the project definitely has reached the point of requiring maintenance on a regular, ongoing basis, some of which is going to be rather expensive maintenance. It may even be necessary to completely replace siding, window casings, window wells, concrete, roofs, and other elements, rather than merely maintaining those elements by conducting a succession of patchwork repairs. Moreover, if you are comparing your older project to another, more recently constructed project, it is very likely that the newer project was constructed using modern materials which are more durable and may require less maintenance than similar elements of your own project.

Something else to consider is that developers are notorious for starting projects at artificially low rates of assessment, after which it takes a long time to bring those assessments into line with the reality of long-range maintenance programs ("long range" meaning establishing and making regular contributions to a Reserves account). In the case of your own project, it is very likely that the original developer set low assessments in the beginning, and now the owners are having to bear the burden of catching up with contemporary maintenance costs of aging facilities.

Bottom line here: Do not compare the amount of your association's assessment with the assessment of another project. The circumstances from one project to another are altogether different, and there is no way to do an apples-to-apples comparison.