Limited Common Elements

It may require a change to the covenants vs. changing any other document.

You say that these 8 units pay more in monthly fees than the other units.

To get a better understanding of your situation, could you provide the following info:

1. How much more do they pay?

2. What would it cost to replace the grinder pumps?

3. What's the expected life of a grinder pump?

4. Are the funds allocated for grinder pump replacement in a separate bank account? In a separate line on your balance sheet?

Thx.

Thanks everyone for the input so far.

Wording from Declaration I could find:

“Controlled Facilities means all real estate and improvements within the planned community which is part of, or benefits solely, a Unit, which is not a common facility, but which is maintained, improved, repaired, replaced, regulated, managed, insured and/ or controlled but he association. Controlled facilities for the units include, but are not limited to: all lawns, on the Unit, the roofs, gutters, downspouts, soffit, fascia, siding and masonry.

Controlled Facility Expenses means the expenses of the controlled facilities, which are to be assessed against the Owners if incurred by the association as the result of its responsibility for maintaining, improving, repairing, replacing, regulating, managing, insuring and controlling the controlled facilities which are part of, or benefit solely, the Units. “

To me the second paragraph says, even though the common facilities are items only benefiting one owner, all owners are responsible for the expenses associated. Otherwise if an HOA were to replace three roof for example and wouldn’t have enough money in the reserves (for whatever reason) only these three owners would be charged a special assessment. I am not aware that this is how it would be done.

NpS:
They pay $20 more each month. Based on a 2016 reserve study, the first $10k repair event would be in 2020. The expected life based on the reserve study is 10+ years. The funds are a separate line item on our balance sheet but not in an actual different bank account at the bank.

Sam:
The problem is, that prior boards often times did things without any standing, but because no one ever questioned anything, they got away with it for sooo long. I on the other hand am on Th board since this year and like having everything in order and legally stable.

Thanks everyone

1. In your earlier post, you said that the HOA was covering $20 for electricity. Is this $20 reimbursement for the $20 the HOA is paying or is it intended for long term maintenance?

2. $10k over 10 years is $1k per year needed for reserves (before considering inflation factors). You're collecting $20 x 12 x 8 = $1,920 per year from those units. Certainly enough to cover the reserves needed for the pump repairs. But I'm wondering if that's enough to cover pump replacement. I don't know much about reserves for pumps, so I'm only guessing that there will be sufficient funds from those individual contributions.

3. If the HOA is willing to keep covering the electric costs, my best guess is that you're getting enough funds from the 8 owners. This was my biggest concern since it's always hardest to justify collecting more money.

4. Per prior post, I would suggest making sure that controlled facilities properly documented. I would also suggest having a separate bank account for those reserves - Not absolutely necessary, but details like that tend to get lost in the shuffle when old Directors move on and new ones come on board.

My first question is always - Who's responsible for paying what?
My second is - How significant would an error be?
My third - Pick your battles carefully?

If all you are talking about is $10-20K over a period of 10 years, that would come to less than $1 per month apiece for the 200 houses. The money is small. Anyone who's going to complain about $1 per month needs to get a life. You're currently collecting a premium for the long term maintenance but not the cost of electricity. BOD members have resisted a separate bank account. Under the circumstances - Not worth changing the status quo. Let sleeping dogs lie.

I'm even not sure if it's worth the effort to make changes to your declaration. I've got a list of stuff I've wanted to change in mine for 5 years. You really need to be able to allocate time and money to such a change - From start to finish, it can easily take as much as a couple of years. Is this the time? Is this the most pressing issue you need to resolve? If things aren't in tip top shape everywhere else, I wouldn't deal with this at the present time.

Something that we have found very helpful is a Responsibility Chart - item by item - which shows who is responsible for what. Ours is only 2 pages long, and it is the true reference point whenever there is a discussion. (No one around here looks to the formal documentation - the chart covers a broader set of issues based on what's been asked in the past. We update it as needed - Much easier than changing the Declaration.) You might consider developing one for your community if you don't have one. I've attached a copy of ours. A lot of time was spent haggling over the wording, but it was worth it and we didn't have any outside costs.