Special Assessment Headaches

The Board recently proposed a SA for new roofs. It appears that it's going to pass (we're still receiving proxies/ballots). Since this all began I've had owners approach me to say that if it passes they cannot afford the assessment of $2400. Some have said flat out they will not be a part because they don't have a roof leak and don't have the money. I'm well versed on the lien/foreclosure process, but hate the thought of actually forcing someone out of their home. The board would like to work with owners, but they are asking for $25 or $50 per month payments. 4 to 8 years to replace roofs that are going south quickly isn't an option. We're spending a lot of money monthly on roof repairs. It's like a dog chasing his tail! Anyone been thru the process with so much resistance? Were collections a huge headache? Suggestions?

Thanks in advance!

President with a headache

Fortunately, we haven't had any special assessments (yet), but when I was board treasurer, the thought of one gave me headaches because our reserves were horribly low (they still are, although there's been some improvement) and that's usually why special assessments are necessary. That or damages so extensive that there's not enough money in reserves and insurance claim money to pay all the costs.

No one likes to pay regular assessments, let alone special assessments, but if they lived in detached homes, what would they do if that roof leaked? This is life as a homeowner - sometimes repairs become necessary whether you're prepared for them or not.

I'm assuming this is a townhouse community, which is what I live in, and you're correct that $25 - $50 a month won't cut it. The association might be able to get a loan, but homeowners need to understand that will mean assessments would increase considerably, in order to pay it, fund reserves and routine operating costs. I assume you've laid out all the options and why the $2400 is the best one, so the best I could suggest is to have a contractor check which roofs need to be replaced right now (within 4 months, because you should get this done before winter) vs. those that can wait until sometime next year. The folks who need immediate repair will have to bite the bullet and everyone else has to get the assessment paid by a specific date next year. Everyone would have to pay at least $200 a month towards the assessmen, so the $2400 would be paid in a year - suggest weekly or bi-monthly payment, if necessary.

And to help prevent this from happening again, be sure you get a reserve study done and this time, follow the recommendations as best you can. Take a hard look at your operating costs as well - it may be some things have to be cut in order to help fund reserves. That may also mean some services will have to be turned over to the homeowners, which will require a change to the CCRs (and another special vote). Keep your homeowners in the loop and encourage them to bring their own ideas to the board.

Thanks Sam, that was helpful!

Melissa, there's no insurance for blatant incompetence. Have you priced roofing lately? Town homes range from 1250 to 1500 SF.

John,
180 townhouses, 36 buildings plus the pool house.

Almost forgot - you say you have a pool house, so you probably have a pool. Might want to consider getting rid of it because that can eat up a huge percentage of the budget. It took a while, but our community got rid of ours about 7 years ago - it's not missed.

In my experience $2400 per member in a townhome community is a bargain, especially for a full replacement. There are abundant pricing guides on the net that say as much.