Changing the purpose of a special assessment AFTER it has been collected

Did you ask the board why it decided not to refund the money? If so, what was the response? It may be the insurance company was dragging its feet on settling the claim and if the roofs really needed replacement sooner rather than later, the board may have decided to get the special assessment to ensure the work would be done while continuing the fight with the insurance company.

The current state of your reserves might also be an issue - evidently, there wasn't enough money to cover replacement so the special assessment was necessary. This can happen if your reserves were already underfunded, so by putting the special assessment money in reserves, it can still be used to pay for major repairs or replacement to the common areas, such as roofing, so you really haven't lost anything. That said, it sounds like the board could have been more candid in explaining what the options were and why they took this particular action.

As for the "is this legal" question, I think there are some Arizona people who may answer your question, but if not, you'll need to consult a private attorney. Most states have their statutes online, so you might want to visit your legislature's website - https://www.azleg.gov/arstitle/ - and revve up the search function.

Bad advice by Melissa.

Far as I know, you will have to refund. It’s not so much AZ law but a CPA would have to be contacted to check if you don’t meet the return filing’s test requirements.

PART of Melissa's post makes sense.

however

Since the replacement roof had NOT been properly funded via assessment into reserve fund, assessments need to be raised in order to fund the NEXT replacement.

As the money is already there via a 'special' assessment ....................... ?

BEST OF LUCK

valid P/O/V

I am with you Mark on this one. It's why I posted that if the money was collected because of hindsight issues, then don't see the problem.

Let's say this scenario as this happens in roof replacement game. They realized had to replace the roofs of their HOA. They agreed. Went to their reserve fund and found it less than adequate to cover the costs. (Maybe just had an in-mind amount of the expense no real #'s. It happens). So they start the process of approving a special assessment. As that process takes ALOT of time just to approve and collect monies. They then shopped for a roof contractor. Well they get one of those Roof contractor companies that come around saying "Oh insurance money will pay for that". So guess what? The HOA is on the phone making a claim to their insurance company to pay the Roof contractor. It may be that they do qualify because of recent storms etc... So now they get their insurance claim and give it to the roofing contractor.

Now what to do with the money they collected? Well considering they just made an insurance claim, some of it should have paid the deductible. It also most likely means their insurance expenses will be increasing due to the claim. It could be on the border of being cancelled or higher deductible.

So the best thing for the HOA to do is to put the money back into their Reserve fund so they won't be subject to insurance claims. It may be insurance won't cover next time or qualify for a claim. The next roof project will be a different monster.

I don't think anyone should be returned their special assessment money. It's still going toward reserves and the purpose of the expenses of the HOA. If it was going to fund a whole different project then may show up at a meeting to request earmarking the money for roof repairs.

Roofing companies come to my door all the time especially after storms. They claim the insurance will pay for repairs due to recent storm damages etc... Be careful. This is NOT always the case. Most of the time this is a scam. Something many people fall for every year without educating themselves. The HOA is just as easily scammed by the roof sales people too.

I agree.

Melissa ... it is no longer a special assessment - and should be returned.

Again, I believe a lot of attorneys would love to have a simple case like this.

The poster hasn't returned yet to respond to all this and I have to say I concur with Mark. Sometimes there really is a simple answer to a question, but in HOA land, I've found very little is simple. Most of the time, people ask a question and after getting a few responses, adds more information that turns the issue on its head. You don't have to provide ALL the details, but context is everything and necessary to provide a halfway decent answer that the poster can consider.

As for "useful vs. useless" information, we are all offering our opinions, so just because you disagree with something doesn't mean it's wrong or right. Take a response for what it is - in the end, you have to make up your own mind anyway.

Now, depending on the rest of the information Mark mentioned, a refund may be warranted, although I still say it might be better to simply put it in reserves, especially if there's an underfunding issue. However, instead of cutting a multitude of checks, the board might also credit the special assessment to individual accounts. That may be more useful than a mere refund because it could prevent an increase in next year's assessments. In the present, not having to pay an assessment for the next few months (depending on the amount) could give people more breathing room in their household budgets. If homeowners voted on the special assessment, I think they should also vote on whether the money should stay in reserves or be used as a credit.

I didn't take that phrase into account, my bad.

Then the association needs to make that case.

Resignation not necessary.

Recording in the minutes of the motion and the "motioner's" specific AYE vote is sufficient protection.

That is EXACTLY what I am saying Kelly! They probably found a roof contractor who told them they could make it an insurance claim after they collected the money. Happens all the time with roofing contractors. Sometime the "scam" works and other times it doesn't. FYI: Do NOT believe a roofing company that comes to your door telling you that due to recent storms you qualify BS... You will be holding the bag.

Also said by doing this as an insurance claim, they just made a claim on their insurance. Which has consequences. That of higher payments, deductible, or added risk. The Insurance carrier may not do it next time as it may be replaced due to aging issues not damage. Factors need to consider.

Besides if a HOA is responsible for roof repairs. They should have that money in their reserves for it at any time...

I agree wholeheartedly with George.

I disagree with Melissa about 50% of the time, but this is harsh. I don't remember seeing anything to suggest she's "always ready to waste homeowners money".

You don’t know that, some details are missing here.

They will have to seek proper advice.

Sorry for being harsh. Let’s see if the author can fill in some gaps.

Richard,
I have been reading your comments for many years. You are usually right on many issues. This is the second time you took a stab at the President. Keep your politics to yourself if you don't mind. This country is divided enough without your help.

I am sure you are a good Property Manager and maybe board member but you picked the wrong political party to support IMO.

Remember AOC says the World is going to end in 12 years if we don't stop flying in Planes and driving cars.

Richard,
I guess I owe you an apology. I am a proud American and even though I did not care for the last president I was always careful to keep my views to myself. The country needs to work together to solve the many problems we have.

Lets talk HOA and help in the areas we can actually make a difference.

If the assessment was originally said to be able to fill the Reserves for pending items such as roof replacement then later an insurance claim happened to pay for roof replacement, I would keep the assessment in the Reserves.

If the assessment was specifically defined in that it would be used for roof replacement and then n insurance claim paid for it, I would return it.