B.P. Oil Spill Claim Check

In 2013, when I was on our Board, we applied for a B.P. Oil Spill Claim. We had NO idea if we could qualify or receive a payment. Fast forward three years (and after eleven years I'm no longer a Board Member; treasurer)....this year our Association received a check from that settlement for $9000.00

The first thing this new Board did was use $3000.00 of that check to repay money they illegally took our of our Reserve Funds, to pay for operating expenses. (Another long story.)

That left $6000.00 of that extra income. But they deposited it in our regular operating account.

We have a special project coming up and we were all facing a $320.00 assessment. We're a very small association. A petition was circulated requesting that the Board use that $6000.00 "windfall" to reduce the amount of the assessment for each owner.

There was a meeting last week for the Board to vote on assessing the members for the special project. Three of the five Board Members had quit before this meeting so there were only two Board members there. Our management company insisted that they were keeping the $6000.00 in the operating account because we should have a "cushion" in case "emergency" items come up. That isn't what an operating account is for. That is why we have an operating budget, and that is how we set our fees.

The property manager threw our petition on the table and never discussed it. This check wasn't a part of our regular "income" and we feel it should have been put into a "special" or "reserve" account for future use. It's just mind-boggling that our management company is going to dictate how this money is going to be used.

By the way---our two Board Members were worthless---they just got railroaded by this property manager and voted to assess the members.

This is in Florida....I'm just curious what anyone else thinks about this? It just seems ILLEGAL to use the money this way. We're condo...not homeowners. Thanks all!

Larry, I REALLY appreciate your reply! Do you have knowledge of Florida laws and statutes? I have a feeling that you do. I guess we'll have to act really fast....because our assessment is due on November 9th. Should I contact our Association Attorney and our Board Members informing them that we're calling a special Member's Meeting? I know that the Secretary has to "call" the meeting....but with all the Board Members quitting, we only have a president now....no treasurer or secretary.

Larry, I agree with everything you say....thanks for refreshing my memory. However, our documents require that a "special member's meeting" must be called by the secretary...and because we have no secretary, right now, it may be a mute point. Thanks for reminding me (also) that our attorney has no legal responsibility to respond to members; that was "lost" on me because I used him on numerous occasions while I was on the Board for 12 years.

I appreciate your responses.

Anna,

It appears that your board is swapping money from one pocket to another. If you spend the $6,000 to avoid assessment, you have no cushion and would face a fresh dues assessment if some maintenance issue arises.

If you save the $6,000 as an operating reserve, you get assessed today.

Long story short.....your HOA is broke and your regular dues are too low to support you (or expenses too high relative to cash flow).

My recommendation:

Spend the $6,000 to avoid the assessment, but raise your monthly dues in the same action to replace the $6,000 over time and perpetually feed your savings until costs can be contained.

Assessment avoidance without fiscal reform is an impossible job. The bill will come due.