HOA is charging a fee for "future possible problems savings account"

Started by DeborahL10 • 20 replies • 1823 views

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DeborahL10 (North Carolina)
Posts: 4

Posted:

I am being charged an additional amount of money to go into an account for future possible problems that may arise with our roads in addition to our HOA dues, to help homeowners not be charged the full amount at one time if it may happen-I am opposed to being forced to pay into a "savings" account for repairs that I may never see if I move prior to them being done, if at all. a letter stating they will incur a 25$ accounting charge and place a lien on my property if this savings money isn't paid-I am current on all yearly HOA dues-is this legal?

GlenL (Ohio)
Posts: 5,491

Posted:

Deborah welcome but if you want legal advice you need to consult an attorney. It sounds like they are starting a reserve fund to pay for future road repairs and which is proper. I understand how you feel but look at it this way, every time you use the roads, you do some miniscule damage which adds up over the years. If you sell and move, why should the future owners pay for damage you did?

Studies show that 5 out of 4 people have problems with fractions

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Deb

It is called a Reserve Fund. It is money set aside (budgeted) for future repairs. In some states it is mandatory.

You are using the roads thus wearing them out. Do you not see an obligation to contribute to their repairs?

Do you think it would be fair for only the owners that will live there when the roads need to be repaired to be assessed/billed for the repairs? What about those like your self who usage over the years caused the roads to need repair?

DeborahL10 (North Carolina)
Posts: 4

Posted:

the roads are currently being repaired with the HOA dues being paid over the last 10 years. I am already paying HOA dues to go into a fund for that purpose and common area expenses. I can't understand a second charge to be separate.

DeborahL10 (North Carolina)
Posts: 4

Posted:

also I might add I am expected to pay the same additional fees on an adjacent empty lot that has never and will never use the road to be repaired. thinking of consolidating properties to keep from having two payments to make.

RayC4 (Virginia)
Posts: 173

Posted:

Quote:

Posted By DeborahL10 on 01/05/2015 7:41 AM
the roads are currently being repaired

Deborah, it sounds to me like the current road repairs caused the HOA to determine that whatever 'reserve fund' was being budgeted turned out to be woefully inadequate. Did you attend any meetings where this whole additional 'roads reserve' episode was discussed and enacted? (What was the context of all this?)

Also, what capital components are covered by the existing reserve fund. If they are minimal, maybe the BOD just budgeted poorly. Roads are expensive.

GlenL (Ohio)
Posts: 5,491

Posted:

Quote:

Posted By DeborahL10 on 01/05/2015 7:41 AM
the roads are currently being repaired with the HOA dues being paid over the last 10 years. I am already paying HOA dues to go into a fund for that purpose and common area expenses. I can't understand a second charge to be separate.

OK say the HOA has put away $100,000 over the past 10 years to pay for the repairs they are now doing and they spend $90,000, so they have to re-build the fund so they will have money on hand the next time it needs work. Now they can be responsible and have every homeowner pay a little each year towards that or hit them up for a major Special Assessment giving them 30 - 90 days to come up with a Boatload of cash. In the mean time unless you plan on parking your cars, you are using the roads and need to pay your share.

Studies show that 5 out of 4 people have problems with fractions

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Deborah,

The HOA's goal is to have its property owners contribute to the Road Maintenance fund as they use the roads...effectively pay-as-you-go. When the roads are "exhausted," those who've used those roads in the past (and helped exhaust them) have funded their replacement.

To charge existing residents a special assessment only at the point of the road project being mandatory is negligent by the HOA directors and unfair to new residents who were not using the roads during most of that road's service years.

This is fundamental budgeting and paying for private roads if you're an HOA member and dues payer - and it's responsible and transparent policy.

SUMMARY: You are NOT paying for repairs you may never see....you're paying to replace the asphalt you enjoy using RIGHT NOW. Pay your dues.

DeborahL10 (North Carolina)
Posts: 4

Posted:

I do pay my dues Kelly-have discussed with a lawyer the consolidation of my developed and undeveloped adjacent acreage so I'm not paying double the amount-thanks for all your time and responses

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Deborah,

This is fundamental HOA business, strategy and philosophy. There is no debate between your position and any other positions held by any competent, regular contributors to this forum. There can't be. You don't seem cut out to live or manage your lots in an HOA-restricted environment. There's nothing wrong with that.

The fact is that your HOA board has determined it's not saving enough money and is trying to avoid special assessments, which are mostly avoidable. Most of us respect that decision as often HOA boards will not be so honest in the accounting and in the explaining.

Good luck with your efforts and with your out-of-pocket expenses.

KerryL1 (California)
Posts: 14,550

Posted:

Others here are right, Deborah. I think kelly's last two replies are especially clear.

In my HOA there are a few "combined" or consolidated properties. The owners are assess dues on each and have one vote for each per our CC&Rs.

TimB4 (Tennessee)
Posts: 21,059

Posted:

WOW, I was going to reply and saw that Deborah has already resigned from the forum.

It's unfortunate when someone seeks advice and opinions on an issue but (apparently) only wants to hear advice and opinions that validate their own opinion of the issue.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Her position was not based in reality. It was a classic case of a property buyer liking the community that is crafted as a result of HOA regulation then attempting to exempt themselves from the "rights restricting" portions of it.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By KellyM3 on 01/05/2015 5:35 PM

Her position was not based in reality.

As I understood her position, it was why should she pay for something now if she knows she is going to move before repairs/replacement is needed. This is an issue I think every Association has to deal with when discussing reserves. Many members in my Association voted against raising our assessments to fund the reserves. Fortunately, there were enough who understood it's better to pay a little more now than a special assessment later.

I don't think it's not being an issue of reality. It's just an issue of perspective looking at an issue.

CyrstalB (Maryland)
Posts: 457

Posted:

Quote:

Posted By TimB4 on 01/05/2015 5:48 PM

Posted By KellyM3 on 01/05/2015 5:35 PM

Her position was not based in reality.

The reality is she is one more HO who did not understand, fully or not, what the CCR's actually mean. I am coming full circle on this and will post a new topic!

JanetB2 (Colorado)
Posts: 4,219

Posted:

If she did not want to have to maintain and have budgeted the use of private roads ... Then should not have purchased in an HOA that requires said maintenance. If you have used and abused the property over time you are responsible for the repairs and not for a new owner to be slammed with a special assessment. I believe her BOD was doing its due diligence and I commend them for their foresight. Unfortunately there are many who have same attitude as this OP.

JonD1
Posts: 2,350

Posted:

So many people today suffer from shortsightedness. Can't imagine 6 months, 1 year or twenty years down the road. They live for today don't bother to plan for the future and use only HOPE that things will work out. Good luck with that.

Head down to Washington to see what I mean. Is there any sanity left in what is supposed to be our leadership?

I read an article that stuck with me a while ago. In it the author claimed as a result of the coming financial difficulties 1/2 of the people in this country will lose everything they have. Sounds pretty bad on its face but if you think of the real consequences if true well no one even those who do not lose everything will be profound.

The OP's thought process is an indication to me why 1/2 of the people will lose everything.

Sad, the OP came here looking for support for her perspective as Tim would say. Rather than considering the possibility her persepctive might be wrong she simply left with her views intact. Hell, why should I pay to be prepared for future costs! And sadly, there are plenty of people who agree with her!

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our standalone homes HOA covers roof replacement, house shell repair/replacement, and all landscaping. Many people have moved here for those reasons thus they understand what our Reserves are there for and basically they do not balk at paying for future needs.

That said, we have never had a dues raise ($600 per year) but the BOD is presently discussing raising the dues. We are discussing a 5 to 10% increase. Our budget works as is with about $15K per year going toward Reserves. Our problem is the development is 7 years old and we are starting to experience typical aging issues like we need more tree trimming, need some trees removed, repair sprinkler systems, need some sodding, etc.

We have no amenities so we do not have those issues to address.

It will be interesting to see how our members accept the increase.

JohnB26 (South Carolina)
Posts: 1,001

Posted:

Hell, why should I pay to be prepared for future costs! And sadly, there are plenty of people who agree with her!

70/30 she is a 55+

sound familiar?: "Why should I pay? I may not be here tomorrow!"

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By JonD1 on 01/07/2015 6:16 AM

Rather than considering the possibility her persepctive might be wrong she simply left with her views intact.

I would say that her perspective was incomplete rather than wrong (keeping in mind that to her, the opinion is 100% accurate based on her perspective).

Quote:

Posted By JonD1 on 01/07/2015 6:16 AM

And sadly, there are plenty of people who agree with her!

How True !

JonD1
Posts: 2,350

Posted:

Quote:

Posted By TimB4 on 01/07/2015 7:18 AM

Posted By JonD1 on 01/07/2015 6:16 AM

Rather than considering the possibility her persepctive might be wrong she simply left with her views intact.

I would say that her perspective was incomplete rather than wrong (keeping in mind that to her, the opinion is 100% accurate based on her perspective).

Quote:

Posted By JonD1 on 01/07/2015 6:16 AM

And sadly, there are plenty of people who agree with her!

How True !

Once again Tim you prove yourself to be much more "professional" than I.
When faced with an idiot I tend to tell them so.
"incomplete" versus "wrong"

The best I could do was "might be wrong" which in this case was as far as I could go!

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