BetseyJ (California)
Posts: 4
Posts: 4
Posted:
Hello everyone,
I am a member of a small (18 unit), self-managed condo HOA. I purchased my unit 11 months ago and I recently attended my first annual HOA meeting. I attended in hopes to meet some of my neighbors. Even though we are small, we all don't know each other. I am a private and reserved person so I'm not opposed to this, but it would be nice to know people's names and faces, especially with how small our community is. Our community isn't gated so it is easy for anyone to walk through. During the meeting, I noticed only 7 unit owners showed up (about 85% of our units are owner occupied), of which 5 of the 7 are board members. I believe 4 out of the 5 board members have been board members for at least 10-20+ years. I asked if the other members are involved behind the scenes and the board said that they have always relied on the board to handle everything and don't complain or have any issues.
Our building was built in the 70s and the layout is more like an apartment. There are no guest spots, the parking is subterranean with most unit owners having garages with doors that close, while some of us (myself included) have parking ports. The only shared/communal places are driveways, stairways, and some shrubbery surrounding the building. Our HOA dues cover trash, water, general insurance (we are in CA and do not have earthquake insurance), and various maintenance/repairs to the common areas/items the HOA is responsible for.
During the HOA meeting, we received a copy of the budget, balance sheet, profit and loss, and reserve allocation. A little background about me--I have a financial background and am a controller for a local company (I understand/have prepared tax returns and have helped prepare compiled/reviewed/audited financial statements for private companies and nonprofits [no HOAs]), this is my first experience as a member in an HOA, and my first time owning a "home." I'm writing to see if my thoughts and feelings towards members of the board and how our HOA is managing our money is valid or if I'm expecting too much.
I didn't ask too many questions during the meeting because 1) it's my nature to process things first and sometimes that takes a couple hours to a couple of days, before I ask a lot of questions and 2) I'm new to the whole HOA scene so I didn't know what was normal/not normal for an HOA. I have a total of three fiscal year financials for my HOA. Our dues are $275/month (about to be raised significantly if we add on earthquake insurance in the amount of 150-200/month, but will be raised regardless because the board said our utilities and insurance expenses are increasing). Our reserve account has a $150k balance and our operating account has about $65k. In my 11 months of living in my unit, I personally feel that our HOA provides the bare bones for the unit owners. Repairs/maintenance are done when there is a complaint of something wrong. I provide for my own monthly pest control and dryer vent cleaning.
When I sat down on my own to review the financials later in the week, I saw that our net income is about $20k a year. There are not many categories to our reserve allocation--roof, fence, and major repairs/improvements. Of the 200k in reserve, about $150k is allocated to major repairs. I sent our BOD an email inquiring what consisted of major repairs. I also inquired about the amount of interest earned from the amounts we have in the bank (less than $50), if we can find a savings account or CD, or money market to make additional income to offset the increase in expenses, if our budgeted net income could be used to offset the increase in utilities and insurance expense or even a part of the earthquake insurance. I didn't see an amount or date that we're trying to have our reserve reach so I asked them about that as well. I also made sure to thank them and to let them know that I am extremely appreciative of answering questions I had during my last 11 months and everything they do in the background that we aren't aware of.
The BOD replied to have me meet with two of the members on the BOD. During our meeting, we discuss the questions that I had. They told me that they plan to repair the roof in bits and pieces as long as they can because replacing an entire roof is expensive. I inquired if there has been any leaks from the roofs into units and they said yes so I voiced that it it makes me a little nervous that we have an older roof and we only repair it when an owner informs them that there is a leak as this could potentially lead to large/major damages one day. The major improvements category was for a number of things they listed and that they will keep on adding to that portion of the reserves as everything is so expensive. I asked them if there has been a recent reserve study. To which they replied that they paid a company to do the reserve study years ago but they ended up doing on the work so they didn't think it was worth the $200 for more studies. When I mentioned that I thought it was legally required to do some sort of study or to revisit the study, they said that's what the annual reserve allocation is. In addition to our roof, I asked them about our plumbing lines. The ones we currently have are original to the building and all the units will have the rusty orange water come out for a couple of seconds sometimes. Our units share two main water lines. One line covers 9 units so if any unit has any potentially major plumbing repairs, that side of the building would lose water access if the water was shut off for the one unit. My plumber told me it will only be a matter of time until something happens as the lines are close to their useful life. I understand that re-piping the plumbing lines are very costly, but I'm also scared of lines leaking/bursting and causing floods in downstairs units (this happened to my friend's galvanized pipes). The two board members told me that their plumber said the pipes are in good working order.
During the meeting, I couldn't help but to feel that I was being patronized. There was also comments made that made me feel there was reverse age discrimination. The two I met with are retired while I'm in my mid-30s. They made comments on how other members of the HOA struggle financially and have high mortgages so they cannot afford special assessments and possibly earthquake insurance. I told these the two board members that I completely understand as I have a mortgage as well and they responded by saying that I don't have any children and I make more than the members they were referring to (I don't know how they came to this conclusion). I felt like I had difficulty getting answers to questions and that I was frustrating them with my questions as sometimes, they would tap their pencils on the table, take deep breaths, and quietly groaned while I spoke. They told me that because I have been here for almost a year, that I couldn't understand how expensive repairs are but they couldn't give me any estimated figures or estimations on when things will be fixed/replaced. When I try to convey to them that I've previously helped business management clients who own rental multi-family and commercial rental properties plan, budget, and interview vendors, I would get the body language that I mentioned above. They also have made comments on how they want earthquake insurance because they have put a lot into their respective units after living there 20+ years, but they don't think the younger owners would vote for the insurance because we haven't put a lot of money into our units yet, implying that we can just walk away from our mortgages and homes if something catastrophic were to happen.
I've spoken to many friends and family members regarding their HOA and they seem to provide more than mine. I know it is bad to compare, but I needed some sort reference. If we add on earthquake insurance, our monthly dues would be at least $425 to $475. Majority of the people I've spoken to pay about $500/month which includes earthquake insurance but they live in gated complexes (their complex are about the same size as mine) and get monthly pest control (I pay for my own), annual hydrojetting, complete roof replacements as stated on their reserve studies, semi annual dryer vent cleaning (I do this myself), and security cameras (I have a video doorbell). Their reserve balance isn't as high as ours, about $50k and they are slowly replenishing it.
I'm sorry for the very long post, I even left some things out because I knew this was long enough the way it is, but I am trying to figure out if I am off base and my BOD is handling things as they should or are some of my points valid? Thank you all in advance for even making it this far!
I am a member of a small (18 unit), self-managed condo HOA. I purchased my unit 11 months ago and I recently attended my first annual HOA meeting. I attended in hopes to meet some of my neighbors. Even though we are small, we all don't know each other. I am a private and reserved person so I'm not opposed to this, but it would be nice to know people's names and faces, especially with how small our community is. Our community isn't gated so it is easy for anyone to walk through. During the meeting, I noticed only 7 unit owners showed up (about 85% of our units are owner occupied), of which 5 of the 7 are board members. I believe 4 out of the 5 board members have been board members for at least 10-20+ years. I asked if the other members are involved behind the scenes and the board said that they have always relied on the board to handle everything and don't complain or have any issues.
Our building was built in the 70s and the layout is more like an apartment. There are no guest spots, the parking is subterranean with most unit owners having garages with doors that close, while some of us (myself included) have parking ports. The only shared/communal places are driveways, stairways, and some shrubbery surrounding the building. Our HOA dues cover trash, water, general insurance (we are in CA and do not have earthquake insurance), and various maintenance/repairs to the common areas/items the HOA is responsible for.
During the HOA meeting, we received a copy of the budget, balance sheet, profit and loss, and reserve allocation. A little background about me--I have a financial background and am a controller for a local company (I understand/have prepared tax returns and have helped prepare compiled/reviewed/audited financial statements for private companies and nonprofits [no HOAs]), this is my first experience as a member in an HOA, and my first time owning a "home." I'm writing to see if my thoughts and feelings towards members of the board and how our HOA is managing our money is valid or if I'm expecting too much.
I didn't ask too many questions during the meeting because 1) it's my nature to process things first and sometimes that takes a couple hours to a couple of days, before I ask a lot of questions and 2) I'm new to the whole HOA scene so I didn't know what was normal/not normal for an HOA. I have a total of three fiscal year financials for my HOA. Our dues are $275/month (about to be raised significantly if we add on earthquake insurance in the amount of 150-200/month, but will be raised regardless because the board said our utilities and insurance expenses are increasing). Our reserve account has a $150k balance and our operating account has about $65k. In my 11 months of living in my unit, I personally feel that our HOA provides the bare bones for the unit owners. Repairs/maintenance are done when there is a complaint of something wrong. I provide for my own monthly pest control and dryer vent cleaning.
When I sat down on my own to review the financials later in the week, I saw that our net income is about $20k a year. There are not many categories to our reserve allocation--roof, fence, and major repairs/improvements. Of the 200k in reserve, about $150k is allocated to major repairs. I sent our BOD an email inquiring what consisted of major repairs. I also inquired about the amount of interest earned from the amounts we have in the bank (less than $50), if we can find a savings account or CD, or money market to make additional income to offset the increase in expenses, if our budgeted net income could be used to offset the increase in utilities and insurance expense or even a part of the earthquake insurance. I didn't see an amount or date that we're trying to have our reserve reach so I asked them about that as well. I also made sure to thank them and to let them know that I am extremely appreciative of answering questions I had during my last 11 months and everything they do in the background that we aren't aware of.
The BOD replied to have me meet with two of the members on the BOD. During our meeting, we discuss the questions that I had. They told me that they plan to repair the roof in bits and pieces as long as they can because replacing an entire roof is expensive. I inquired if there has been any leaks from the roofs into units and they said yes so I voiced that it it makes me a little nervous that we have an older roof and we only repair it when an owner informs them that there is a leak as this could potentially lead to large/major damages one day. The major improvements category was for a number of things they listed and that they will keep on adding to that portion of the reserves as everything is so expensive. I asked them if there has been a recent reserve study. To which they replied that they paid a company to do the reserve study years ago but they ended up doing on the work so they didn't think it was worth the $200 for more studies. When I mentioned that I thought it was legally required to do some sort of study or to revisit the study, they said that's what the annual reserve allocation is. In addition to our roof, I asked them about our plumbing lines. The ones we currently have are original to the building and all the units will have the rusty orange water come out for a couple of seconds sometimes. Our units share two main water lines. One line covers 9 units so if any unit has any potentially major plumbing repairs, that side of the building would lose water access if the water was shut off for the one unit. My plumber told me it will only be a matter of time until something happens as the lines are close to their useful life. I understand that re-piping the plumbing lines are very costly, but I'm also scared of lines leaking/bursting and causing floods in downstairs units (this happened to my friend's galvanized pipes). The two board members told me that their plumber said the pipes are in good working order.
During the meeting, I couldn't help but to feel that I was being patronized. There was also comments made that made me feel there was reverse age discrimination. The two I met with are retired while I'm in my mid-30s. They made comments on how other members of the HOA struggle financially and have high mortgages so they cannot afford special assessments and possibly earthquake insurance. I told these the two board members that I completely understand as I have a mortgage as well and they responded by saying that I don't have any children and I make more than the members they were referring to (I don't know how they came to this conclusion). I felt like I had difficulty getting answers to questions and that I was frustrating them with my questions as sometimes, they would tap their pencils on the table, take deep breaths, and quietly groaned while I spoke. They told me that because I have been here for almost a year, that I couldn't understand how expensive repairs are but they couldn't give me any estimated figures or estimations on when things will be fixed/replaced. When I try to convey to them that I've previously helped business management clients who own rental multi-family and commercial rental properties plan, budget, and interview vendors, I would get the body language that I mentioned above. They also have made comments on how they want earthquake insurance because they have put a lot into their respective units after living there 20+ years, but they don't think the younger owners would vote for the insurance because we haven't put a lot of money into our units yet, implying that we can just walk away from our mortgages and homes if something catastrophic were to happen.
I've spoken to many friends and family members regarding their HOA and they seem to provide more than mine. I know it is bad to compare, but I needed some sort reference. If we add on earthquake insurance, our monthly dues would be at least $425 to $475. Majority of the people I've spoken to pay about $500/month which includes earthquake insurance but they live in gated complexes (their complex are about the same size as mine) and get monthly pest control (I pay for my own), annual hydrojetting, complete roof replacements as stated on their reserve studies, semi annual dryer vent cleaning (I do this myself), and security cameras (I have a video doorbell). Their reserve balance isn't as high as ours, about $50k and they are slowly replenishing it.
I'm sorry for the very long post, I even left some things out because I knew this was long enough the way it is, but I am trying to figure out if I am off base and my BOD is handling things as they should or are some of my points valid? Thank you all in advance for even making it this far!