Texas Special Assessments

I don't know about TX law, but the bolded section suggests to me that this only requires a board meeting properly noticed and open to members. I think if a member's meeting was required, it would be explicitly stated.

Conch, my mistake. I read your original post quickly and did not catch you are working on amending your documents and not dealing with the need for a Special Assessment.

The core of my advice stands: what is the language in your documents today regarding Special Assessments? I strongly urge you to allow the Board to approve a Special Assessment for repairs, replacements, and maintenance if needed as obtaining association approval for repairs and maintenance is a massive challenge--read headache. Some documents limit how frequently a Special Assessment can take place, if it is felt you need some constraints you should consider applying an interval constraint. Do not attempt to limit the amount of money, you could find yourself in a situation where you need a great deal of money with no way to raise it.

Requiring association approval for capital improvements, like installing a pool, should be left to the members to decide.

Just don't make the approval requirements too onerous. I used to work with a small townhouse complex - their documents required 100% homeowner approval for a special assessment. They needed to asses to repair a retaining wall separating their complex from a neighboring one. Some homeowners simply refused to vote yes. The neighboring complex is currently suing them as a result. The foundation is damaged in several of the units - again, they need a special assessment. Owners in unaffected units won't vote yes. Nobody in the entire complex can sell or refinance because of the lawsuit and the broken foundation - all because a couple of people who apparently never plan on moving refuse to accept their responsibility and approve the damn assessment.

We were brainstorming and just thru out a number. I would go with $30k and the board can only assess annually. That like $100 per homeowner.

This is a double edged sword Concho and definitely requires thoughtful consideration. I'm in Texas and let me give you a cautionary example.

I was our HOA president for 11-12 years. Our HOA has 24 units. I can say without hyperbole that roughly 50% of our homeowners are ignorant morons and have no clue or care about fiscal responsibility, the welfare of our community, or concern for anyone other than themselves. As a result we have a board that is as bad as any HOA board can be. Seriously we have officers with significant personality disorders who have done things that would make your head spin. Unbelievable things.

Secondly you or your current board won't hold power forever so when you amend the Covenants you need to consider two critical items. 1) How do you protect the HOA from a bad board? 2)How do you protect idiotic and/or apathetic homeowners from themselves?

Our CC&R's currently require approval from 67% of the homeowners and assessments can only be made once per calendar year for a period that lasts not longer than a calendar year.

If we had to do it all over again I would take the advice from this thread and do something more like:
If a repair is estimated to cost more than 25% of the current annual maintenance fee income then approval of >50% of a quorum of homeowners during a members meeting must be achieved. If the board, acting on its own, approves two consecutive annual special assessments then 50% of homeowners present at a members meeting must approve any special assessment for the next two consecutive years.

A cooling off period of sorts. This puts a limit on the amount of money that can be assessed by the board alone and protects homeowners from never ending assessments by bad boards while eliminating the reality of apathetic homeonwer's who have no care for fiscal responsibility.

Just at thought anyway.

Concho

I crafted a message for you yesterday and must not have pushed the submit button.

The essence of my message was a concern you and your colleagues will box yourselves in regarding a special assessment.

ISTR you live south, San Antonio, Houston, someplace like that. You are susceptible to hurricanes which we do not have to be as much concerned about in the DFW area.

I recommend you tote up the expense of the insurance deductibles for which the association would be responsible in a worst case scenario. I would then add to that figure the worst case scenario expense if your association had to replace all the 'soft' assets, such as landscaping, which are not insurable.

That sum should be the minimum Special Assessment which could be agreed to by the Board. The owners should not ever be a part of the Special Assessment approval process for maintenance, repairs, and replacements. You will find there will always be those who will oppose a Special Assessment no matter how sound the cost justification.

The owners should always be part of the approval process if a new capital expenditure is being considered--pool, clubhouse, etc. But only if the capital improvement is something new, not the repair or replacement of an existing asset.

Finally, whatever figure you agree upon today will probably not stand the test of time. You should include some kind of year over year percentage increase so when the Big One hits in 2025, your board is not shackled by not being able to raise enough money to meet the needs of the association.

It is my understanding that you can only use this money for the stated purposes of the special assessment. Also, why would you not hold off until the clubhouse and pool are built? Won't there be heavy trucks coming in and out during construction?

Thank you for the quick reply JohnT38. There will be ongoing construction on multiple homes at any given time. It will be quite an exercise in upgrading the street while construction is taking place.