Executive Board wants to replace garage doors 12 years ahead of schedule

I live in a development in Connecticut that consists of 80 townhomes. The first building in the development was erected in 2005. The Executive Board is preparing the annual budget for next year and as part of their last meeting, they were discussing replacing all of the garage doors. Their justification is that over the last year, the bottom panels of the garage doors on two of the units needed to be replaced and they believe that it would be cost effective to replace them all versus repairing the ones that actually need it.

As part of their discussion, the Executive Board was leaning towards levying a special assessment of roughly $800 per unit for new garage doors versus including it in the budget.

According to our reserve study, the doors have 12 years left on their anticipated 20 year lifespan. The study projects that they will need to be replaced in 2025. Our reserve study is fairly well funded and there are already funds earmarked for garage doors. Currently, we have roughly 50% of the amount that is projected will be needed in 2025 for the doors. Plus, the study actually states, "Typically, lower sections of garage doors wear out faster and may need to be replaced sooner then the rest of the garage door. This type of replacement should be done on an 'as-needed' basis. Funding for this type of replacement should come from either the annual operational budget or the reserve contingency." Personally, that is how I feel as well on this topic. Replacing a couple of lower sections per year is normal maintenance that should be expected. Accelerating the replacement of all of the doors by 12 years is unreasonable and levying a special assessment to do so seems foolhardy.

I have looked through our association's documents as well as the CT CIOA laws and saw no specific restrictions on when or how a special assessment can be levied. So I ask, what is common practice or wisdom on special assessments? Can a special assessment be levied when there are funds that already exist for the purpose intended?

What is the condition of the doors that they want to replace?

When was the most recent reserve study, and what is the stated condition of those 12 doors?

It seems inappropriate to replace entire doors early, especially when the board has stated partial replacement are likely to be needed. Also, it seems inappropriate for the board to have an inaccurate reserve study if the condition currently warrants replacement.

Either way, it sounds like someone is dropping the ball and not doing an appropriate job.

I agree.

Who is this "Executive Board" and what authority do they have? Is this the Board of Directors of the HOA, or a management company created board?

Thanks Paul.
Still makes no sense that they need to replace 8 year old doors in their entirety; or even in part for that matter.
As I asked before, what's the justification given and what did the last reserve study say on the matter?

If your reserve study is eight years old, it's out of date. Reserve studies need to be revised periodically to factor in actual experience. Our community was started in 2004. The first reserve study was done in 2008. The reserve study was just revised and updated and factored in new information we have learned regarding earlier driveway deterioration issues that were not anticipated in the first study. Also, the first study used higher return rates on investments than have been the case over the past few years. These were also adjusted in the new study.

I have seen it recommended that reserve studies be revised every five years. Based on our experience we have decided to revise our reserve study every two years. Fortunately, we are able to do this because we do not have to hire an outside firm. Our community consists mostly of retired professionals, many with engineering degrees and some with experience in accounting and financial planning so we are able to do a study ourselves. We have also recently completed an investment strategy policy. The committee that prepared the document consisted of people with financial and engineering backgrounds and was chaired by a resident who is a financial planner and a former association president.

As for your doors, I can understand replacing an entire door. Doors can become discolored over the years due to exposure to the sun and weather. Although replacing a single panel can solve the problem functionally, the result might not be aesthetically pleasing. Your estimated cost to replace a single panel might actually be a little low, based on our recent experience. Our association recently replaced one of the center panels on a 2-car garage door and I believe the cost was somewhere around $600. Maybe replacing a bottom panel is cheaper, I don't know.

However, I agree, that does not justify replacing all the doors in the entire community. I can also understand replacing more than one door in a unit or building to maintain aesthetics, but not every door in every unit.

Sorry. I did not mention previously that the reserve study was updated just over a year ago.

Unless the special assessment exceeds 15% of the last approved regular (or annual) budget, the special assessment does not require a vote of the homeowners. If the special assessment exceeds 15%, then a special meeting must be held. At that meeting (with or without a quorum), a majority of ALL homeowners must vote to REJECT the special assessment or else it is approved. (Chapter 828, Section 47-261e)

What blows my mind is the study referenced that some of the door bottom panels might wear out and they should be replaced as needed. Also seems that very few are.

This is what makes the action of accessing and replacing them all now to be a very foolish move.

While I'm not a member of any aspect of the legal profession, it seems to me that this Board is violating the Business Judgement Rule (BJR). It's corporate law and, in a nutshell concerning this reserves issue, states that directors should (but not must) rely on the opinions of experts in areas that're outside their own area of expertise. Certified reserves analysts are among the experts that HOA directors rely on.

Directors also must use their members' funds carefully (not recklessly). It's called the duty of care or due diligence. Directors must carefully consider their decisions.

No, I'm not saying anything about anyone suing anyone else, but often directors think that they're above needing to use common sense--that no one can hold them accountable. But that's off base.

Carol, the BJK is more often used to protect the decisions and actions of a Board NOT to enforce violations of their actions. And as you suggest there is no requirement of the Board to seek expert advice and guidance.

And while with the information provided, I do not agree with the Board's plan to replace all those doors needlessly IMO this would serve as a poor decision rather than some violation of the BJR or other duties you have described.

And to make the assertion that possible "criminal" charges might come of this is simply nonsense. Just what criminal law was violated?

Carrol because someone does not see it your way they are cranky?

Is that too in the D/S guidelines?

Well Carrol it seems we disagree. The BJR serves as a shield for those serving on Boards to set limits as to their decisions being questioned and the liability for their actions as members of a Board.

It is a common legal concept in most states. Not just California.

And a decision such as the one discussed here does not require expert input to make. We are talking about garage doors after all.

Bottom line is STUPIDITY is not a violation of the law. Nor the BJR or the criminal codes.

And as the OP here in this case is from CT my guess California law or what your MC hands out has little if any value in discussing this.

And Carrol wasn't it you who posted about being intentionally excluded by the other members of your own Board while certain decisions were being made? How did that settle out? What did the California codes require in that matter?

Carol,

I hate to do this but I have to admit Jon has this one right.

The BJR is a shield and not a sword. A board can invoke the BJR when members try to interfere with the board's decisions. A board (including HOA's, school boards, and business corporations) may make decisions, including decisions that the rest of us think are bad decisions.

When someone sues a board for making a bad decision, he is asking the court to substitute its judgment for that of the lawfully-elected board's. The BJR effectively prevents this from happening unless there has been a clear abuse of discretion. In this case, the board would be protected by the BJR as it has made a bad decision to use association funds to replace association property. Stupid but lawful. Had the board voted to donate the reserve funds to a local charity, then there would be a clear abuse of discretion as the funds were collected for the welfare of the association.

The members of an HOA have a better remedy than going to court: they can hold a recall election.

Wow imagine that the jerk has it right. Well Larry thanks for offering your opinion. From one jerk to another that is. Once again not only does Carrol offer irrelevant information she fails to understand it. Not the first time.

Perhaps, she is still "cranky" because her fellow Board members saw fit to act while intentionally excluding HER from the process. Hmmmmmmmm to some that might be quite telling.

As I have stated in the past I have been through several owner filed lawsuits when they have decided their decisions were "right" and the Board's "wrong". So the BJR was involved and I paid attention. And as I attempted to explain, to Carrol, this is most times used as a means to DEFEND the actions of the Board NOT prove guilt.
My guess Carrol has no direct expierence with the BJR. But has no problem explaing that which she does not understand.

Now Carrol seems to see it YOUR way just not mine. That's funny because you and I agree. Most be the California air in those California high rises.....

And Carrol it was Dave who suggested criminal charges might result from replacing these garage doors. I can respond to multiple comments at the same time. Try to keep up. Criminal charges and suggesting they might apply is still nonsense.

Simple Google search tells us the following...

"The business judgment rule essentially says that if the board or a board member acts in good faith in making a decision in the interest of the building or association, the court will likely not intervene, even if the decision turns out to negatively impact the building or association. Courts have consistently ruled that board members have been given the power to make such decisions for their co-op, and partly because of this, they cannot be held personally liable for those decisions."

Not really all that complicated cranky or not......

Paul,

Lets cut to the bottom line.

Everyone agrees that changing all the garage doors when there is still useful life in them doesn't pass the common sense test. That said, the bottom line is: What can be done about it.

If you are serving on the Board, you can certainly raise objections and try to bring others to your way of thinking. I've had success by asking what project they are willing to delay or maintenance they want to defer to make this happen. Or encourage a special assessment to make up the difference between what is available and what the cost will be. If you get enough support, you can stop the process.

If you are not serving on the Board, you can still try to sway votes by attending the Board meeting and asking questions. If this is unsuccessful, you can rally neighbors and recall the Board. Hopefully, they wouldn't have entered into a contract already by the time the recall happens. If they have, the Association may have to honor the contract or pay a penalty to break it.

Honestly, neither option is a good one. However, those appear to be the options available.

Hope this helps,

Tim

Carol try not to flatter yourself.

I have no need to review old threads because some of your comments over time have been so memorable that became hard to forget.

Like the three months it took your Board to decide on the purchase of a clock! Yes, I still laugh at that one. Quite the accomplishment.

If seems Carol like many folks you have lots of book knowledge and have read loads just little real understanding and your suggestion the Board in question might rethink their decision if they are made aware of the BJR is meaningless.

I guess for you its creepy when people question your version of reality.