Special Assessments for new construction

The board might call for a special assessment, but usually they have to be approved by a certain percentage of homeowners, so it seems strange that your documents don't address that issue. Then again, it may be buried in another part of the documents, so be sure you're reading all of it.

Before you start talking about suing, consider why the board is asking for a special assessment. Special assessments are often issued for one of two reasons. One, a major repair or replacement of the common area has become necessary, perhaps because of a disaster such as a fire or flood. However, there's not enough money in reserves, the operating budget AND association insurance to cover it. Since all the homeowners jointly own the common area and they are the association, they have to pony up the money to fix it.

The second reason is poor financial planning. Sometimes the Board has called for assessment increases, only to be shot down by the homeowners (if the homeowners have veto power over approving annual budgets). Sometimes, board members don't have the knowledge or stones to make prudent financial decisions on behalf of the association and strive to keep assessments "low" (as if the price of home maintenance NEVER goes up). Or maybe they're just more interested in being re-elected.

Oh, yeah, reasons 3 and 4. (3) Sometimes special assessments become necessary because the association has lost a legal battle and has to pay a lot of money and there's nothing in the budget for that either. (4) there's nothing in reserves, a major repair is coming up in a hurry and the board needs to increase the funding RIGHT NOW. If it doesn't, the association may have to revert to a loan, thus jacking up assessments anyway (and at a larger rate than usual) because the budget has to cover operating expenses, reserves - and now loan payments with interest.

Now, you and your neighbors could refuse to pay the special assessment and if there's nothing in your documents compelling you to do so, you might be within your rights - but if you fail to address the reason for the special assessment, you're going to be in a big world of hurt. So start there - take a look at your budget and see what the numbers are telling you. Look at your board meeting minutes - what have they been discussing over the past year or two that make a special assessment necessary?

Better yet, start going to the meetings and ask questions. Then stick around to listen to the proceedings - don't just yap during the resident forum and go home. When the meeting adjourns, talk to some of the board members for more information.

Once you know why the special assessment is necessary, you may feel differently about it. However, if the board doesn't explain itself, you're probably correct in asking an attorney (not the internet) about your legal options.

Our Covenants say a Special Assessment can be called for at anytime and any amount as decided by the BOD but 2/3rds of all owners must approve it.

Covenants also say dues/monthly assessment can be raised once a year when the yearly budget is presented. Owners then have 30 days to call for a Special Meeting and a majority of all owners can rescind the increase.

I can assure you, few of our owners know either Covenant exists.