Special Assessments

Started by JimR24 • 13 replies • 2216 views

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JimR24 (Texas)
Posts: 399

Posted:

We are now interpreting our governing documents to say that a 2/3 majority of homeowners must vote for any special assessment proposed by our Board. I was wondering how this was handled at other Associations. Does your Board have the authority to pass and collect a special assessment on its membership?...or does your Membership have to vote on it?

oljim, in texas

Lovin' life with my honey!
and, President of HOA in Texas

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jim
Our BOD has the right to raise assessments in a prescribed manner which is once a year. Now this is not a Special Assessment. A Special Assessment must be approved by 2/3rd of all our owners.

JimR24 (Texas)
Posts: 399

Posted:

Quote:

Posted By JohnC46 on 08/20/2016 5:39 PM
Jim
Our BOD has the right to raise assessments in a prescribed manner which is once a year. Now this is not a Special Assessment. A Special Assessment must be approved by 2/3rd of all our owners.

Good to know John - thanks for posting up!

oljim, in texas

Lovin' life with my honey!
and, President of HOA in Texas

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Jim

Largest Special Assessment I ever saw was $25 to $32K (yes thousand) per unit. The BOD did their homework and presented it well. 86% approved.

JimR24 (Texas)
Posts: 399

Posted:

Quote:

Posted By JohnC46 on 08/20/2016 5:45 PM
Jim

Largest Special Assessment I ever saw was $25 to $32K (yes thousand) per unit. The BOD did their homework and presented it well. 86% approved.

Wow John - we have a vote coming up in a couple of months (under $400 per homeowner) and we're attempting to provide as much information as possible to our homeowners- so everybody can be as informed as possible. This is a first for us and we're not sure what to expect. Were there any special things done by this Board which proved effective in the communication? What do you think?

oljim, in texas

Lovin' life with my honey!
and, President of HOA in Texas

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By JimR24 on 08/20/2016 5:14 PM
We are now interpreting our governing documents to say that a 2/3 majority of homeowners must vote for any special assessment proposed by our Board. I was wondering how this was handled at other Associations. Does your Board have the authority to pass and collect a special assessment on its membership?...or does your Membership have to vote on it?

Same limitation in my association. Two-thirds of owners must approve a special assessment. Since we have yet to have an election where 2/3 of the owners even bother to vote, the approval requirement puts a special assessment off the charts.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Hi Jim,

Special Assessments must be approved by the membership for our Association.
Our CC&Rs specify 2/3 of the votes cast to approve a special assessment.
However, the quorum requirement for that votes goes from 10% to 60%.

The CC&Rs also specify that if the quorum is not met, a new meeting may be called within 60 days and the quorum requirement is cut in half.

RichardP13 (California)
Posts: 3,868

Posted:

Jim

I would read your CCRs carefully. In California, Board can create a special assessment up to and including 5% of the annual budgeted expenses. Anything over that requires a secret ballot vote and the approval is that of a majority of a quorum of the membership. Much lower threshold than people think.

KerryL1 (California)
Posts: 14,550

Posted:

Jim, what Richard points to is that:

State laws vary. What do TX statutes say?

Governing docs vary.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Our HOA a special assessment took 2/3rds vote of the whole membership of the HOA. The board was in charge of the project but the funding part is up to the membership. Plus the board can't just decide it's a good time to raise funds for a whole bunch of projects unless that is their goal. Let's say you want to resurface the pool. The special assessment is to pay for just that project. It's not to say "well let's buy new pool furniture while we are at it...". The project and cost should be spelled out before instituting a special assessment.

Keep in mind someone not paying a special assessment is still subject to a lien just like not paying dues. So if someone doesn't want to participate, be prepared for the cost of collections. Which I would build in a bit of a buffer in special assessments for such eventualities or additional emergency expense. The left over money can then be transferred back into the budget if any, for maybe a little side project agreed upon. It does NOT go back to the individual homeowners.

Former HOA President

JimR24 (Texas)
Posts: 399

Posted:

Quote:

Posted By KerryL1 on 08/21/2016 7:48 AM
Jim, what Richard points to is that:

State laws vary. What do TX statutes say?

Governing docs vary.

Hi Kerry - our Texas statute only indicates that "special assessments" are a portion of the definition of an "assessment". Our state statutes provide no other details (other than saying that an Association has the authority to impose a special assessment by following its DCC&R).

Thanks for the question!

oljim, in texas

Lovin' life with my honey!
and, President of HOA in Texas

JimR24 (Texas)
Posts: 399

Posted:

Quote:

Posted By MelissaP1 on 08/21/2016 9:01 AM
Our HOA a special assessment took 2/3rds vote of the whole membership of the HOA. The board was in charge of the project but the funding part is up to the membership. Plus the board can't just decide it's a good time to raise funds for a whole bunch of projects unless that is their goal. Let's say you want to resurface the pool. The special assessment is to pay for just that project. It's not to say "well let's buy new pool furniture while we are at it...". The project and cost should be spelled out before instituting a special assessment.

Keep in mind someone not paying a special assessment is still subject to a lien just like not paying dues. So if someone doesn't want to participate, be prepared for the cost of collections. Which I would build in a bit of a buffer in special assessments for such eventualities or additional emergency expense. The left over money can then be transferred back into the budget if any, for maybe a little side project agreed upon. It does NOT go back to the individual homeowners.

Good points Melissa. According to our governing documents, for a special assessment to pass - there has to be a 2/3 majority of a quorum of homeowners at the meeting called for that purpose. Our quorum requirement is 20%. This is a first for us...and it's gonna be interesting to see how this comes out.

oljim, in texas

Lovin' life with my honey!
and, President of HOA in Texas

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I want to also point out if you want to by-pass a special meeting requirement, your lawyer can draft up a document for you. It basically gives up members right to attend a special meeting in order to cast their vote. Sounds a bit weird but it does free up the HOA to go door to door to collect votes. Which is way easier to do than trying to gather homeowners in one room at one time for one vote. Especially a majority at that.

We had to do that when we changed our CC&R's. Basically one signed 2 different documents. 1 giving away their rights to a special meeting. The 2nd for the actual vote. We also brought these documents to our regular meetings if anyone wanted to sign then. Believe, me it was a time saver.

Former HOA President

JimR24 (Texas)
Posts: 399

Posted:

Quote:

Posted By MelissaP1 on 08/21/2016 11:53 AM
I want to also point out if you want to by-pass a special meeting requirement, your lawyer can draft up a document for you. It basically gives up members right to attend a special meeting in order to cast their vote. Sounds a bit weird but it does free up the HOA to go door to door to collect votes. Which is way easier to do than trying to gather homeowners in one room at one time for one vote. Especially a majority at that.

We had to do that when we changed our CC&R's. Basically one signed 2 different documents. 1 giving away their rights to a special meeting. The 2nd for the actual vote. We also brought these documents to our regular meetings if anyone wanted to sign then. Believe, me it was a time saver.

Appreciate you posting up Melissa - unless i am not understanding, what you are describing sounds somewhat like the proxy system we already have in place....which is authorized by our governing documents. A member can assign his or her vote to someone else by completing a document which says that another member (or the Board) can cast the vote as they see fit. This does not cause the member to give up his or right to attend the meeting; however, it does assign voting authority to another...given the member's intent to not attend the meeting.

Thanks!

oljim, in texas

Lovin' life with my honey!
and, President of HOA in Texas

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