We Need to Re-Roof

Started by AnitaC5 • 9 replies • 1992 views

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AnitaC5 (South Carolina)
Posts: 16

Posted:

What are the steps to have our little condo complex re-roofed?

Is it mandatory to have to have a meeting (that no one will attend)?
Is it mandatory to have a homeowner vote?

Our quotes are basic reroofing, not to include any extra damage they find while doing the job. (I know there are squirrel holes, which will need to be fixed)

If we assess for more, just in case, any money would go back into building repair or would we have to return it.

Flat rate for the roof job is +/-$1500 per unit. How much time must we allow them to pay? Can we ask for all at once? Do we have to allow them an installment? The sooner the better to get the job done since all 3 upstairs units have had some sort of leaks over the past few years. $500/3 months isn’t awful however $100/15 months could cause more damage.

And an example of a letter requesting special assessment would be welcome.

SheliaH (Indiana)
Posts: 6,964

Posted:

First, the golden rule of HOA living - READ YOUR DOCUMENTS! It should have the information you need regarding special assessments - generally, the assessment will have to be approved by a certain percentage of homeowners - usually a high one, like 67% or 75% like we have in my community.

Do you have a reserve fund? If so, it sounds like you don't have enough to cover this repair - after you get through this situation, you'll probably need to review your reserve study and rethink how much you're putting aside for the work. If you don't have a reserve study, get one, as it'll help you with future budget planning.

If your documents don't address special assessments at all, you need to fix that too (get an attorney to help draft the verbiage and check the documents to see what's required to amend them). In the meantime, here's one person's thoughts:

Is it mandatory to have a meeting - your documents will have that answer, but if it doesn't, having a meeting is a no-brainer - you're asking people to pay extra money beyond the regular assessment and the board should be able to look everyone in the eye and explain why.

Is it mandatory to have a vote - check the documents again. If no vote is required, take one anyway. Better to have everyone on board than to argue with this one or that.

How much time you should give people to pay will depend on how much you need, so you should start with getting a better idea of what type of work will be required and how long it will take. You don't say how "little" your complex is, but I would think you would start with the roofs that need the most work and go on from there. Get several estimates for the work (at least three) and you should have a decent ballpark to work with. If you need repairs immediately, you may have to give people 30-60 days to come up with all the money. If the work can be scheduled for next spring or summer, installments might work.

If you settle on a specific estimate and there's money left over, I would put it in reserves. Sooner or later, you'll have to deal with roof repairs again or perhaps something else - if you save the money, you'll have a starting point.

Your meeting with the homeowners should begin with discussing the problem with the roof and what needs to be done, and then you can discuss the numbers. Tell them what's on hand right now and why it isn't enough. Assessments too low? Delinquencies too high? Not enough has been put in reserves because of the first two? Too much borrowing from reserves and no effort made to pay it back? All of the above and a few more reasons? Be honest and have a plan on how the board plans to resolve this so you can reduce your chances of this happening again.

Oh, yeah, be sure to give the homeowners copies of relevant documents (the estimate, a report from the contractor, your current budget, etc.) so they can review it for themselves - if someone has a better suggestion, give it a listen. Good luck!

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

TimB4 (Tennessee)
Posts: 21,059

Posted:

Anita,

Shelia addressed your questions very well. The answers will be in your governing documents.

I'm going to answer your first question a little differently:

What are the steps to have our little condo complex re-roofed?

The Correct process would have been to have had a Reserve Study completed and had money set aside for the roof (a little each year) into the Reserve funds. For more information on Reserves see the following thread on this forum:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/103517/view/topic/Default.aspx

When the Association (meaning the membership along with the Board) fails to set aside funds into Reserves to pay for expected maintenance, repairs and replacement of common elements, then when things occur (that would have been paid for from the Reserves) a special assessment is necessary. This sounds like what your Association is doing. To assess a special assessment, then the Board must follow the procedure outlined in your governing documents or, if the documents are silent, any procedure in applicable State statutes.

FredS7 (Arizona)
Posts: 927

Posted:

> having a meeting is a no-brainer

For sure. And precede and follow up with mailings of relevant documents (assessment of the condition of existing roof, remaining service life, estimates to replace, amount available in reserves for funding, options for financing,...

You are pretty much guaranteed to have some very unhappy owners but if you do this carefully most will understand the need.

If it were me I want want to be able to authoritatively discuss financing options (can the HOA take out a loan? what other options might an owner have?)

SheliaH (Indiana)
Posts: 6,964

Posted:

You also said no one would attend a meeting, but if you’re talking special assessment, I guarantee people will show up!

As far as wording a special assessment letter goes, all you may need to do is stamp “Special assessment possible – please read enclosed letter” on the envelope (that’ll get their attention).

There are a number of special assessment letters posted around the web – Google “special assessment letter” to see some of them. You will note most of them do the following:

• Cite the Bylaw or CCR(s) that enable the board to call for a special assessment and what must be done to approve it (e.g. X number/percentage of homeowners must agree)
• Explain what work is needed, how much it’s expected to cost and why the current budget/reserves isn’t enough to cover it. If the Board has made cuts in other areas to try to avoid the special assessment, include that as well
• Date, time and location of the meeting – you could call for a vote at this one, but I would suggest discussing what needs to be done and the options available during this meeting, and then schedule a formal vote. Of course if you have the required percentage for a vote to be taken, you could go ahead with it and then send a follow up letter with payment details.
• Instructions regarding use of proxies (if you can use them to vote on special assessment – double-check your documents to make sure)

You may also want to add some sort of Q and A sheet on some of the issues to give people a starting point, so they’ll know what questions to ask at the meeting. I’d even throw in what might happen if the work isn’t done.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

AnitaC5 (South Carolina)
Posts: 16

Posted:

No one will attend: There are 6 units – 3 Primary resident/Board members, 1 bank owned, 1 rental, 1 owner lives out of state. Besides the 3 board members, no one has ever attended, or voted in the 4 years I have been here. I inherited the VP as part of the condo purchase hahaha. 2013 we set up the assessment to add to the reserve. Taking in account 1 owner had not paid fees in 2 years. We were on track to have some in the bank. Until the pit bull/service animal (and delinquent owner) legal troubles started. That 5 grand for our lawyer could have gone to half the roof. (At least that is behind us now YEA!!!!!!!!) 2014 we are just trying to get thru and keep harmony in the neighborhood.

Our docs contain provisions for an Annual meeting, Special Assessments for Capital Improvements & Reserves, I didn’t see anything about meeting or voting for special assessments.

We would like to have the work done as soon as we could and can’t start until we do have the money. We have some in the account, but it is earmarked for regular bills. How long realistically should we allow for payment? We are just at this point trying to schedule the roofer, before the first of the year, next spring.

NpS (Pennsylvania)
Posts: 4,216

Posted:

$10k divided among 5 houses (assuming that the 2 year delinquent won't participate even if he is caught up on standard assessments) is $2k per household.

At $250 per month, it would take 8 months to collect. At $100 per month, it would take 20 months to collect. And that's assuming that everyone else, including the REO bank, pays.

If we did a Special Assessment in my HOA, I would try to avoid anything longer than 3 months - but that's a matter of personal preference. The largest Special Assessment we ever did (snow) was $500 per household. When stretched over 3 months, that was $133 per month. Your numbers are a lot bigger.

Some contractors (not sure about roofers in your area) have financing arrangements with banks that would defer payment from the HOA for 12 months. That's probably something you should investigate.

Sikubali jukumu. Read all posts at your own risk.

FredS7 (Arizona)
Posts: 927

Posted:

> Besides the 3 board members, no one has ever attended, or voted

That's 50% attendance. Higher if the delinquent owner is ineligible to vote. Show me an association that can match that.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By AnitaC5 on 10/14/2014 6:40 AM
What are the steps to have our little condo complex re-roofed?

Is it mandatory to have to have a meeting (that no one will attend)?
Is it mandatory to have a homeowner vote?

Our quotes are basic reroofing, not to include any extra damage they find while doing the job. (I know there are squirrel holes, which will need to be fixed)

If we assess for more, just in case, any money would go back into building repair or would we have to return it.

Flat rate for the roof job is +/-$1500 per unit. How much time must we allow them to pay? Can we ask for all at once? Do we have to allow them an installment? The sooner the better to get the job done since all 3 upstairs units have had some sort of leaks over the past few years. $500/3 months isn’t awful however $100/15 months could cause more damage.

And an example of a letter requesting special assessment would be welcome.

Hi Anita,

Your HOA board should hold a meeting to discuss re-roofing and how to finance the job since the dues payers will be paying extra.

I'm unsure as to whether homeowners must vote. That will be in by-laws.

Your quote for a "basic re-roofing" is a misleading quote. You confirm there will be more required repairs than replacing the roof. Therefore, be transparent and get multiple quotes to "do the job right." You owe this to your community.

Your options for collecting a special assessment depend on your board's decision. It's likely many of your neighbors cannot pay $1,500 in one payment. Know your neighborhood and be gentle on the financial collections....but make sure it's clear that everyone will be paying. The HOA Board, sadly, should never have allowed maintenance to fail so miserably that the dues payers face a "sticker shock" on immediately addressing the roofing issue.

Your board MAY consider (check the rules) a bank loan to immediately replace the roof while establishing an assessment (or overall monthly dues increase) that will pay the loan. If a special assessment, it's one-time money that's collected and spent. If dues are raised on a monthly basis, you can use the revenue, after the loan is retired, to boost your Reserve Funds. Your board can consider a few options depending on your by-laws.

The bottom line is that the HOA board must correct its budget to not only pay its monthly expenses but to also save for big replacement projects so it can be paid in cash.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By FredS7 on 10/14/2014 3:25 PM
> Besides the 3 board members, no one has ever attended, or voted

That's 50% attendance. Higher if the delinquent owner is ineligible to vote. Show me an association that can match that.