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NatalieS3 (Illinois)
Posts: 6
Posted:
I am on the Board of a self-managed condo assn. I'm secretary and have served consecutive terms since 2006. It's small: 19 units. Four floors. Conversion was in 2000. I moved into the building in 2004. Currently there are five members on the Board.

When I moved in, I was told the year before was the first assessment increase. It was a special assessment to pay for what I was told was a new roof. I learned later that it wasn't actually a new roof, it was a "modified roof". Don't ask me what that is. Not long after I moved in, the building began having problems with the roof...namely water infiltrating in various places. I still don't understand it, but somehow the HOA got screwed over on the warranty. It worked out that the warranty wasn't what they thought, and, essentially, everything that went wrong had to be paid for directly out of the HOA operating budget. Maybe three years ago, the situation started getting a lot worse. There have been serious tuck pointing problems too. We have easily spent $20-30k on roof repairs and tuck pointing to date. One day, a leak started in more than one place in a top-floor unit. No amount of trips by the roofer to attempt repairs resolved it for more than a handful of days. I had a few different roofers come in to give proposals. One said there had to be a new roof. Two said the roof was fine and only tuck pointing was needed. One roofer who had very good ratings on yelp proposed removing a section of roof, replace rotted planks, put on a new membrane and re-surface the area. He quoted a price of $6,500. The Board was in favor of going the cheapest route possible. They were going to vote for the lowest bid for TP. My gut told me a lot more than TP was needed. I wanted to spend a little more money to get the section replacement. A few months passed and we were still on the fence. Then the leak got worse. I pushed heavily for the section replacement and managed to persuade the others. Only by then, the roofer said the damage was more extensive and would involve greater repair, so the cost went up about $2k. The roofer would only give a one-year warranty, which troubled me. Still, I saw no other good alternative. No way would the Board approve a new roof and I knew TP wasn't going to be enough. So we had the section repair done. The unit owners got the restoration work done and the leak stopped. As the months progressed and no water came in, I was going around feeling pretty smart. Until a year passed (after the warranty expired). Then a leak started in the unit next door, not far from where the other had been. Our new roofer came back and did some patching. Things were OK for about a month, then the leak started again. The roofer came back and did more patching. The unit stayed dry for less than a month this time, and the old leak in the next door apartment came back. The roofer kept coming back to do more patching, each time resolving the leaks for shorter and shorter intervals. Toward Christmas, a strong odor of mildew was apparent in both units. Then the leak in one unit developed in other places in the kitchen, then in the dining room. The water coming into the kitchen would sometimes flow as if it was coming from a faucet. By this time the owner was beside herself and ready to make war on the HOA. Now it was into Jan. and the roofer said he couldn't do anything more until spring.

Since then, things have continued to devolve. It's like a never-ending episode of Twilight Zone. The unit owner with the worst leaking had to be re-located at a cost of $1k per month to HOA. The bedroom in the next door unit had to be sealed off and their kids are sleeping in the living room. We had to get mold re mediators in. They ripped out the entire kitchen and part of the dining room. The tore out the closet and section of wall in the bedroom of the other unit. The mold contamination was extensive. It cost thousands of dollars and nothing has been comped to us from insurance yet. We've had many roofers out to look at things and give proposals. Things are now such a mess, no one knows what to do and hostilities are brewing. A unit owner suggested we get a roof consultant in to advise. More time delay and more expense. His report took almost a week to arrive. He says a whole new roof is needed; for the immediate, he advises the only alternative is to put on a "sacrificial roof" that MAY stop leakage for possibly a year, but can't be guaranteed. He reviewed all the proposals we have gathered and he adamantly advises against any of them. One proposal is similar to the work that was done two years ago: the roofer would tear out a large section of roof where the damage is, replace rotted wood, replace insulation, replace rubber membrane and replace surface. He quotes a cost of $1,150 with a 3yr warranty. But the consultant says the proposal is inadequate. He gave us names of two roofers he recommends. They have been called. The Board wants to get input from these two before anything else is done. More delay. I know the proposals will run into the multi-thousands. Additionally, a recommended TP proposes all parapets be replaced at a cost of $15k. The Board wants to have the roof replaced fully one year from now, no later. We could remove maybe $10-20k from reserves. The rest would have to come either from an assessment increase or a bank loan. The necessary assessments would come to approx. $5k per unit. Monthly, it would be about $500 more per month for each owner. No way can anyone come up with this, nor agree to it. The Board said they would look for a loan only as a last resort, and only if it can be fully repaid in no more than one year. This solves nothing. No way can the HOA repay the whole loan in a year. Everyone agrees that the least amount of money should be expended for a one-year sacrificial roof. I have tried to think of another way, but I come up with nothing. I am tempted to push for the $1,150 area replacement so the displaced unit owner can move back into her home. But the consultant says no, no, no to that. The rest of the Board is afraid to go against his advice, and my credibility is shot for pushing the previous area repair that was $8500 and lasted only a year.

I lay awake at night, worrying about what we're going to do. I fret about during the day. I'm having bad dreams about the building and collapsing roofs. My stomach is in knots and hurts constantly these days. I've been avoiding my displaced neighbor like the plague. I dread talking to her because I know she's super mad and will ask what's going on. I have no idea what to tell her. I'm not having much fun these days.

Does anyone have any thoughts or suggestions?
SG3 (Pennsylvania)
Posts: 63
Posted:
I would say this has been going on far too long with a lot of wasted money. This is often where HOA's run into trouble. They always take the cheapest route.

I think the board and community needs to accept they need a new roof. It sounds like people will have to dip into their savings to do this. Accept it, don't fall for the lowest bidder, get it fixed and move on.

This is not going to go away. The more you delay, the costlier the outcome.

Get it done correctly.

GlenL (Ohio)
Posts: 5,491
Posted:
Hire a structural engineer to come out and inspect the roof and write up what is needed to repair or replace it. Then get estimates based on what the engineer says needs to be done. To pay for it you may need to have a special assessment or possibly you can secure a bank loan and pay it back over a few years.

Studies show that 5 out of 4 people have problems with fractions
NatalieS3 (Illinois)
Posts: 6
Posted:
Ideally, we'd find a good roofer and get them started on putting up a new roof as soon as they can get us on the schedule. We don't have the money though. The Board doesn't think the unit owners can come up w/ $5k right away. Not all of them anyway. Not enough of them to finance the new roof right away. Their idea is target May 1 of 2015 for the new roof. Give people a year to get the funds together. Let's assume for a moment we do that. The problem is we need an effective solution to the immediate problem. We need something that will get the displaced Member back in her own home ASAP, and the other owners have to have a bedroom for their children. So what do we do in the interim? We need at the very least, a temp solution that can be done quickly and will prevent the units with water coming in now to stop having water seep in for at least a year. It's crazy to sink thousands of dollars into a temp. or sacrificial roof if we have to spend a hundred grand (estimate) in a year to replace the parapets and roof. I'm thinking we need something we can do right away to resolve the immediate problem that doesn't cost thousands of dollars.

Should we get out a loan right now to get all the work done ASAP and give the unit owners the year to come up with the money to pay back the loan?

I agree 100% this has gone on too long. Had it been up to me two years ago, I would have had the new roof go on then instead of the $8,500 section repair. But it was hard enough to get the Board to go along with the latter. They wouldn't have approved a new roof then. There is no "ideal" answer to this problem. We are limited to what resources we have. We are at the poker table with a terrible hand, but we must play with the cards dealt us. There's no walking away from the table. We have to play out the hand. It sucks but it's reality.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
You need to get that roof totally replaced ASAP. Spring/summer a good time to do such repairs.

My suggestion is to make a loan arrangement with a local bank. The HOA stands behind the loan and owners are offered several repayment plans. 20 units needing $100K is $5K per unit.

1. $5K immediately ($5K total)

2. $2.6K now, $2.6K in 12 months. ($5.2K over one year)

3. $1K now. $1.2K per year for 4 years. ($5.8K over 5 years)

Amounts will vary some depending on interest rate.

A townhouse association I formerly belonged to went into debt for $25K per unit for a major overhaul of the entire complex. Owners were offered various pay back plans. None longer then 5 years. 90% of owners voted for the plan. The place is and looks awesome now.

JohnB26 (South Carolina)
Posts: 1,569
Posted:
pretend it is one 'unit' which is your own home

? what would you do at this point ?

DOH
CarolR11 (Colorado)
Posts: 2,563
Posted:
You've been through a lot, Natalie--sorry it's been so hard on you and I would feel the same way.

So, I assume you have nothing in reserves, right?

Then your choices either are a special assessment or a loan. When we had a huge hunk of work in March '09 that needed to be done before summer (HVAC system on roofs of twin towers), we sent owners ballots to choose a special assessment or a loan. They voted on the loan. I don't remember the details of the loan, but our HOA assessments were collateral. We made payments on the loan for about 18 months out of reserves. Then we received a construction defect settlement with which we paid back reserves and paid off the loan.

I tend to think that Glen's advice about having a structural engineer inspect both the tuck pointing issue and the roof. (We rented in an older brownstone condo conversion in Chicago for a year and its owners were recovering from over a million $$ worth of tuck pointing, but in a 222 unit, 22 story high rise.)

No matter which owners choose, it's going to be a big overall bill. Just make sure you follow your own governing documents and IL state law about HOA special assessments and/or loans.
NatalieS3 (Illinois)
Posts: 6
Posted:
Hi Carol, thanks for your reply and your empathy. Yes, I'm about done in w/ all of it. :-(

We do have some reserves. About $50k. The Board voted we can't take more than $10-20k. from them. So maybe we'll have to come up $85-100k, depending. We had a roof consultant come out to give an independent opinion. His background is as a structural engineer. So that step is done.
SG3 (Pennsylvania)
Posts: 63
Posted:
There is no alternate solution. The building needs a new roof. ASAP and make sure it is installed correctly or you will be doing it over again later.

People always say they don't have money when the reality is that they do but don't want to spend their savings. The longer you wait the more damage to repair. Our HOA did not take care of the roofing problems, so it ended up costing twice as much due to damage. Then other things are let go and the property is in decline. Then who are you going to be able to sell to, and for how much?

Maybe your fees need to be increased if you aren't able to save for needed repairs. More will be down the road. Perhaps have a professional analysis and budget prepared. Homeowners typically aren't able to run a large corporation like this. Our community has suffered greatly due to poor and "cheap" business decisions made by people without the necessary knowledge and experience to run such an operation. It is a common problem in condos. The place is in terrible shape now and has not grown in value over the years or sell. It's a real shame and very hard on everyone when this happens.

GlenL (Ohio)
Posts: 5,491
Posted:
Natalie with all due respect, hire a disinterested third party to inspect your roof and tell you exactly what needs to be done. It could be the reason you are having so many problems is that you have the wrong roof for your style of building or climate zone or your existing roof might not be to code. Roofing companies are only interested in selling roofs which will hopefully last until the warranty runs out. Yes it will add a few thousand to the cost of the roof but better to spend the money now, than to pay $100,000 to replace the roof and have to do it again in a few years. Since I doubt any of the Board has experience in knowing what needs to be done as evidenced by your original post, they will be concerned with the lowest bid and the salesman that dazzles them the most. When it comes to the structural integrity of the building, hire a professional, it will save you in the long run. They will also inspect the final installation to make sure it is done correctly.

Studies show that 5 out of 4 people have problems with fractions
SG3 (Pennsylvania)
Posts: 63
Posted:
Listen to Glen. You have to spend, so do it wisely.

NatalieS3 (Illinois)
Posts: 6
Posted:
GlenL, thank you for your thoughts. I can see some people replying didn't read my OP all the way through--probably just skimmed it; I do understand. It's my fault; I know the post was extremely long and few will read it line by line. I'm sorry I made it so long. I felt the history was really needed to the extent it was to give a complete picture of the situation. Believe it or not, you all got the abridged version! LOL

To recap: we did have an objective third party do just what you suggest. He is an independent roof consultant w/ a structural engineer background. He gave his opinion: whole new roof starting from tear-off by a roofer he recommends, or, at the very least, a "sacrificial roof" to hold us over a year until we can get a new roof. He cautions, though, the temp roof can't be guaranteed and the cost will be a minimum of $4k probably. $4k might not be so bad if it wasn't for paying tens of thousands a mere year from now for the new roof.

You and SL might be right: maybe our self-managed Board is a flock of amateurs with no objectivity, overly motivated by the wish to keep assessments as low as possible. You should know, however, originally the association did start out with a management company. This was before I lived here. I've been told the mgmt co. was in incompetent, did everything the cheapest way, and was conspicuously absent too much of the time. It was that co. that had the "modified roof" put on that was shoddy and the so-called warranty was full of as many holes as the roof ended up having. The association fired the mgmt co. and voted to go to self-mgmt. Finding a mgmt co is not too different from finding a skilled laborer to provide maintenance and repairs. Starting out, everyone is a stranger. You can go by referrals from others, or reviews on yelp or Angie's list, or pick a name out of the yellow pages. It's just the same as getting someone to do work in the bldg. There is no sure-proof method of finding someone really good, honest and trustworthy. There's no telling the staff of a mgmt co. will know more than the association members. Our Board is made up of intelligent, educated people, not country rubes who just fell off the turnip truck.

My husband has been saying the same as you, though: he keeps saying it's time to give up the self-mgmt method and get a "real" mgmt co. I admit w/o hesitation that it would absolutely be less headaches turning all this stuff over to someone else. Other than that, however, I'm not convinced we will get people for our money that will do any better than we have. Before their deaths, my parents lived in a luxury, lakefront, high-rise condo bldg. Their assessments were skyrocket high, but they had tons of problems in their bldg too. The mgmt co. screwed up a lot of stuff. They had serious leak issues w/ their roof too that dragged on and on. The only real difference between them and us is they have a LOT more resources than us. So they have a lot more slack for correcting foul-ups. Even so, you both could be right: maybe it is time to roll up the self-mgmt awning and bring in the guys wearing the big-boy pants. That's a debate for another time, however. Right now we have a tiger escaped from the zoo and the immediate priority is capturing the tiger and getting him back back in his cage...the tiger being our leaky roof, of course.

SL, you say most of the time, when people say they don't have the money what they really mean is they don't want to take it out of their savings. Sometimes that's very true. I would argue, though, quite often it's not. There are a LOT of people in America today who own their own homes, live modestly, have no savings and almost all their disposable income goes to cover their basic daily living expenses. Before my parents died and we inherited some money, allowing us to pay off our homeowners' loan, we were people like that. We really had no savings and the bulk of our income went to our basic needs. Had we been hit w/ a $5k special assessment back then, we would've been stuck for it, too. I don't know what we would've done. Our home equity line of credit was extended so far, it couldn't be tapped any more. We couldn't afford to borrow any more money. The repayments would exceed our disposable income. We are extremely fortunate that my parents managed money so well and my father made a decent living. We were blessed to come into enough inherited money that we could pay off all debts and start a healthy retirement savings. Not everyone is so fortunate. We know that.

Still...it looks like borrowing may be the only real option. I don't see what else there is. It's going to be a hard sell though. Board members are very unfriendly to the thought of borrowing anything that can't be repaid 100% within one year, max. It's a dilemma. %>\

SG3 (Pennsylvania)
Posts: 63
Posted:
I understand your need to rationalize, but I hear a lot of excuses when your community really needs to make sacrifices and bite the bullet to get the job done. On the savings, i'm just saying. Often people have more money than they are willing to admit. Especially when someone else wants to spend it.

With the continued leaking, I hope your SE report is not going to become obsolete due to further water damage.

I hear you on the management company but they can not force an HOA to take their recommendations. They still have to operate under the board's decisions. Which usually comes down to whatever is cheapest.

Sorry if I forget your opening post but why does your HOA have insufficient capital funds?

NatalieS3 (Illinois)
Posts: 6
Posted:
Hi SL. You didn't miss an explanation on the reserve funds. I didn't give one. To be honest, I had no idea the reserves would be considered low. I've never been in a condo before and I haven't talked to other HOA about what they have in reserves. What would a sufficient amount be?

I know exactly what you're saying about people getting tight-fisted. So very true. At a meeting a few months ago, one of our Board members was telling neighbors after the meeting, "Believe me, DH and I don't want to have an increase! We are so worried now with our medical expenses!" They have 2 very healthy children, one about a year, they are both working and they have health insurance. Some weeks before, the baby ran a high fever and they thought he may have had a seizure. The doctor ordered an EEG. Turns out, now they think there was no seizure. They just aren't used to paying medical bills more than ordinary office visits. The EEG might have been around $200. I realize it was a scary incident, but I was hearing this and seething inside. My son was born with a serious medical condition, and I couldn't even approach an estimate of what our out-of-pocket medical expenses have been for him. Easily hundreds of thousands. I couldn't begin to count how many hospitalizations he's had, or keep track of all the surgeries he's had, not including dozens of minor procedures. And talk about medication! His Rx expenses to date might be near a million $, and I'm not exaggerating. For four years he was on a drug that cost around $3k a mo. We had a huge co-pay on that. Fortunately, he doesn't need it anymore. There was a time when we nearly lost our major medical insurance and we were terrified. I had to give up work for several years to take care of him. Childcare for him exceeded my income. It was less expensive for me to give up my income than pay for his care while I was at work. We were struggling to get by on one income while our medical bills were out the wazoo and yet we weren't low-income "enough" to qualify for SSI or any public assistance program. I don't like feeling sorry for myself, but here I am having been through years of drowning under medical bills and I'm listening to this fellow Board member carry on about this $200 EEG bill for their otherwise healthy child. And they are very aware of our situation. These are very nice people, and we like them a great deal; I'm sure she meant no harm, but honestly, it was so honking insensitive, I couldn't believe my ears. We could've had a big, beautiful house of our own in a nice suburb by now if our son had been born with no medical problems.

Another example, but not in the building: this was a friend of mine who was married without children, while I was early in my career, not making a lot and my husband was in grad school on fellowships and student loans, and our older son was in daycare. So my friend's husband lost his job and he was out of work for 6 mos. or so. My friend used to talk to me about how worried she was about money...how "broke" they were, which I thought was a little odd because they lived so frugally. Anyway, I find out after a few months that when they were both working, they were banking one whole paycheck of theirs every pay period and living on the other salary. My friend's idea of "being broke" was not being able to put all of one check into savings every two weeks! She was a nice person, but give me a break! What can I say? People! The majority of the human species is pretty tight-fisted IMO.

Having said that, I know there are some families and single owners in our Association who will be hard-pressed to come up with 5 grand in a year. We can do it, but of course it will come out of our retirement savings, which isn't what we want to do if there was a choice. But of course, we know there are big expenses with owning a home, and people must be prepared to pony up when necessary. For some of our neighbors though, we know they don't have the "luxury" of withdrawing from savings.

I'm sorry if I sound like I'm making a lot of excuses and rationalizations. I don't want to sound like a wuss. I'm just saying, it's not so clear-cut as you might think. I do appreciate your help though. I know you're telling it straight.
JohnB26 (South Carolina)
Posts: 1,569
Posted:
the hoa owns things

these things have an expected 'life' and will need replacement

all the owned stuff needs to be funded as it is 'used up'

eg:

start with a new roof which cost 50,000

expected service life may = 20 years

1/20 of 50,000 needs to be saved every year

repeat for EVERY item owned by hoa

it is actually CRYSTAL CLEAR

y'all own stuff - y'all need to pay for it

ps. a community roof is a lot cheaper per 'unit' than individual roofs in detached homes
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Nat

Tough love here, but I suggest you get back on tract about your roof issue versus other things.

SG3 (Pennsylvania)
Posts: 63
Posted:
What do the other bod members want to do? Remind them they have ready wasted 1/3+ of the cost of a new roof by procrastinating the inevitable. That is terribly irresponsible with their member's money. They are not saving money. The more run down and behind things get the harder it will be to find funding. You are a risk businesses don't want to take. They will also charge more for that higher risk if they get involved with your community's problems.

Is this one story? $100,000 sounds high for 20 units if they are stacked units on multiple floors.

I know it's very hard to understand how these things get so messed up. We have
increasingly high fees but still are way behind. BOD does not disclose, except to throw random blame that doesn't make any better sense than what we see around us.

In our community, the haves are carrying the have nots. They wait until things are deteriorated or an emergency. Not a good business model.

KellyM3 (North Carolina)
Posts: 2,239
Posted:
Natalie,

You'll need a loan but get the roof replaced with a permanent option.

Whatever the loan amount, vote to increase dues by the amount required to make your monthly payment. Your existing HOA dues revenue is clearly insufficient, so don't kid yourself. Raise your dues higher if you want to retire the debt early.

If people can't live in a community where they can support fundamental property maintenance, they need to seek more affordable housing as they are priced out. There is no way to get a loan and NOT increase dues to make the loan payment. The increase will be substantial but will not be $5,000 in one-time assessment.

Other personal stories about residents are inconsequential.
JonD1
Posts: 2,350
Posted:
Do you happen to know the square footage of this roof?

Is this a flat roof?

What material is now used on this roof?

Was this the original roofing material?

And the new roof proposals suggest what material?

And the leaks have been caused by ?

Material failure?

Damage?

Age?

Improper installation?

Or do you know?

Very vulnerable position when you approach constactors ans ask THEM what it is you need.

And although educated and metro area residents building relationships with service providers takes time, energy, and so basic idea of human nature no matter WHO is trying.

You need people who you know you can trust and who wish to be long term providers.

And finally hiring an MC does NOT then relieve the Board of responsibility or from having a lead role in the property's management to assume so would be a grave error and be ripe for serious problems.

NatalieS3 (Illinois)
Posts: 6
Posted:
Quote:
Posted By JonD1 on 04/13/2014 5:54 PM
Do you happen to know the square footage of this roof?

Is this a flat roof?

What material is now used on this roof?

Was this the original roofing material?

And the new roof proposals suggest what material?

And the leaks have been caused by ?

Material failure?

Damage?

Age?

Improper installation?

Or do you know?

Very vulnerable position when you approach constactors ans ask THEM what it is you need.

And although educated and metro area residents building relationships with service providers takes time, energy, and so basic idea of human nature no matter WHO is trying.

You need people who you know you can trust and who wish to be long term providers.

And finally hiring an MC does NOT then relieve the Board of responsibility or from having a lead role in the property's management to assume so would be a grave error and be ripe for serious problems.


Kelly and Jon: I know you are both getting at something with the 2 comments at the end of your posts; Jon, you said I should get back on tract (sic) with the issues with the roof and get off personal issues, and Kelly, you said something about I should forget about situations with other unit owners...something to that effect. I get the feeling you were both getting at the same thing somehow, but I don't know what. If you have something to say, please just come out and say it in plain talk and be straight. I don't do well with deciphering codes or hidden language. I don't read minds. Please just say what it is that you mean. Life is short and there's less time every day.

Jon, in re your questions: the roof is 6,400 sq. ft. It's flat. The roof is a wood deck, covered by 1/2 in. thick fiberglass insulation and a SBS torch applied modified membrane over that, and a white granular surface. The perimeter membrane and the unit curbs are flashed with the same modified membrane. Parapets have a sheet metal counter flashing installed. Several proposals on the table, w/ 2 more expected this week. Different materials suggested depending on who you ask. Too many to itemize for you.

Causes of leaks (based on consulting engineer's summary): frequent areas of ponding after rain and snow melts. Debris accumulates around drains due to inadequate water flow to compromised roof drains. The most likely cause of ponding areas is low points of surface is deflection of the deck caused by deck
caused by weight of water and snow in these areas. Condition deteriorating in part because of drains' compromised water flow, and too few drains for size of roof, a violation of bldg code. A contributing cause is a major structural problem with the front parapet wall. Efforts to correct masonry problem with new tuck pointing weren't done properly and did nothing to address the problem of the wall shifting outward, placing undo stress on all building components, w/ cracks and splits in the interior as a result. Problems also are apparent with the outside of the east and west parapet walls. Poor prior masonry work has prevented the brick to breathe. The result is mortar displaced on both walls.

Someone asked why the quotes are so high for a new roof. Part of that is a need to replace damaged parapets, w/ a price tag of $15k for front and side walls. Rear parapet may need replacement too. We have no quote for this yet, so we want to budget adequately for this contingency too. A new roof alone won't resolve all leaking; damaged parapets must be replaced as well. In areas where mortar wasn't properly applied, the newer work is falling away, allowing water to get inside the building, exacerbating damage. The report says approx $70k should be budgeted for the roof replacement, and this doesn't include rotten wood replacement of deck or joists, or the new 4-inch cast iron drain assemblies needed, or masonry repairs. This accounts for the possible $100k budgeting.

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