Assessment to pay a loan off

We have some good FL posters here, Carole.

But until you hear from them, what do FL statutes say about this topic? I guess you'd need to look at 720 or 718, depending whether you're condos or not.

Here in CA, we could pay off a loan with a special assessment--think we'd need Owner approval if above a certain amount. I won't look it up for CA as it won't apply to you.

Why would you pay off the purchase of a clubhouse with a special assessment. Let's say you have a 30 year loan on the purchase and it is pay off over that period of time. Everyone who lives there over that course of time will benefit from and and pay for it basically for the time of use.

You do a special assessment now and pay it off, then the people who may not be using it later, will be paying for it now. Doesn't seem fair to me.

When most of the 55+; communities were built in early 2001-2006 the clubhouses were included in the original purchase of the homes. Our builder Lennar did not do that. We had to buy the clubhouse from the builder at turnover. It was almost impossible to get a regular loan as the collateral, the clubhouse was so limiting. A loan started through Lennar to kislak mortgage which became banco popular. It’s a bad loan in terms of restrictions. The loan did get refinanced once and saved two points. There is a penalty that prepayment can only come from homeowner assessment not from another loan.
Monthly HOA fees include payment for the loan. Now there is talk about just having the current homeowners be assessed. Those homes currently on the market may have a problem. But I just couldn’t find in the docs assessing t pay off a financial obligation

Time left is $3.5 million. Principle decreases $240,000 a year. Why, they want to try to do a major capital improvement and want to be able to get financing.

There are 1060 homes. The finance committee presented it at a meeting last night. Maybe 200 people attended. The board votes August 15.
This is and has been a very opaque board. There will be an uproar. The board has not repaired the clubhouse since hurricane Wilma. They are claiming problems with the insurance company. They want to do a huge improvement led by the management company property appraiser. The board has changed the entrance to the community, logo etc. they did it without the appropriate county permits. So all broke lose and that’s a mess. These folks are not good at project management, don’t want to ask and don’t want to learn. Replacing the board is doable but a whole lot of work

First off, I'd say look at your documents to see whether or not the board can proceed with a mortgage on its own or whether a membership vote is needed.

Second, if a major project is planned, I'd recommend checking into getting a refinance of the existing mortgage that would include the funds necessary for the project. At the last property that I managed, I walked them through the refinance of their mortgage (but to get better interest rates (and consequently dropped the monthly mortgage payment by almost $6,000).

As an aside, not repairing the clubhouse since Wilma sounds like a COA where I lived in central FL. It's been almost 15 years and they still haven't repaired it; a "dispute with the insurance co. is the 'excuse' ".

Edward J Cooke, CMCA, LCAM

If your docs are silent on the issue, look to state statutes. You are in a condo association, correct?

If the statute is also silent on this issue, they can probably do it. Loan collateral was likely not the clubhouse. It's usually the assessments of members.

For this new project, does it in amount go above what they can spend w/o owner approval? That is kind of the main issue, isn't it? They want to assess to pay off this loan, so they can burden with a bigger loan?

I'm still pretty sure any lien would be against assessments. But ok on the other part - that to me seems the larger issue.

For this new project, does it in amount go above what they can spend w/o owner approval?

Of what %? Are you in danger of it passing? Do you want it to pass?

July 15;there was a notice to discuss assessment at August 15 meeting.. the meeting was standing room only. May 200-400 out of 1060. The property manager seems to be running the show. A handout tried to answer all the questions. Most were dicey in my opinion. October 1 $3200 is due or pay over three months with a $50 surcharge each month, or pay by credit card with a 3.5% charge. If you can’t afford it, plead your case to the property manager who will decide.

I still think it is fishy. They want to pay off the loan on 12/20. The assessment should increase the basis in all homes as it is to purchase the clubhouse.. a surcharge for paying over 3 months isn’t right. If they don’t get all the money they will go into the reserve account to get the missing money.
They are refusing to repair the clubhouse from hurricane Irma in the hopes that there will be a complete renovation of the clubhouse voted on. No money will be refunded. It is anticipated that the $37 used to pay off the loan will be used to secure a $5,000,000 loan and pay that off. While all of this is tentatively legal, I just think it smells.
I am tempted to file a complaint that it is discrimination for a surcharge when paying over three months. And, why does the property manager have the authority to decide if someone can’t afford to pay.
More suggestions please.

Yeah, not addressed in FS 720 at all. If your documents don't prohibit the board from taking out a loan (I doubt they would) then I think that's a tacit acknowledgment that the association - through assessments - will have to pay it off.

If your documents don't limit the board's authority to impose special assessments (amount and/or purpose) then I'm afraid they can pretty much do whatever they want.

I agree but don’t know how to remedy that suggestions?