Help - Laws regarding 4 plex Special Assesments

Started by KayM8 • 8 replies • 454 views

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KayM8 (California)
Posts: 1

Posted:

I could really use some help. I own one unit of a fourplex and the building has been mismanaged for years. Unfortunately at this point, the years of mismanagement are now making life miserable. Long story short, are there laws against massive special assessments in California? I know you have to vote on an assessment over 5%...but the problem is there is only four of us. The three other owners and all completely naive about repairs and they gang up against us everytime. We don't have $15k to give to a special assessment in the next few months and they are saying we don't have a choice. Also, side note...I recently became the president of this hoa. Not sure if that helps the situation at all. Any help would be much appreciated. I'm a bit beside myself right now. It feels like we are getting bullied and I don't want to put up with it. Thank you.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Kay

Sorry you feel bullied but it sounds like the vote will be 3 to 1. Democracy in action.

AugustinD
Posts: 5,144

Posted:

Ditto what JohnC46 wrote. I do not see anything at the davis-stirling.com site that will help the OP's situation. E.g. see https://www.davis-stirling.com/HOME/Special-Assessment .

Unfortunately I think this is one of those hard lessons in owning a condominium, especially one with just a few members.

SheliaH (Indiana)
Posts: 6,964

Posted:

As the others have said, you're being outvoted, so you'll have to prepare your budget for a special assessment. The only thing good about this (if there is a bright side) is that all of you will have to long up. There are four owners so you should know what the numbers say about the association finances.

Being president over this like of horse dukey doesn't make a difference in this, but you may be able to take a look at everything that has to be done and set priorities. Repairs and upgrades that are necessary for complying with building codes and safety should take priority. You'll need to consider how quickly that needs to be done -if you can't get going this year, plan for next year. Perhaps you can press the work over three or four years and the special assessment can be divided accordingly so you don't have to cough up $15k all at once.

While you're figuring that out, feel free to have several come to Jesus meetings with everyone so they understand that each and everyone (including you) are responsible for things getting to this point. I suspect you haven't had a reserve study and you may need it to get a handle on how to budget for future expenses. It may even be something you can do tourselves, Although you need some who's very good with numbers to plot out projections for the next 30 years.

Somewhere on this website is a conversation featuring a guy who designed a spreads to do this - use the description and see if you can find it.

I would probably get the work under the special assessment completed first and then work on this reserve study. Good luck -you'll need it.

By the way, in case you haven't already guessed, there is no state law on "massive special assessments, other than requiring a homeowner vote (which is in your documents or should be). What's massive to you may be reasonable to someone else. That said, special assessments are usually necessary because of...poor mismanagement. Sometime they may be needed if there was massive damage from a natural disaster, but those should be rare.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

JohnT38 (South Carolina)
Posts: 1,631

Posted:

If I was in your shoes I would change tactics and work on a detailed alternative plan to present. If you feel that the work is not needed do you have professional quotes to back up your claim? If not, I would get them. If you feel that the work can be spread out over a longer duration present some fact based reasons on why and suggest that the work be done over x amount of years with smaller periodic assessments. In other words present some detailed alternatives.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JohnT38 on 07/04/2020 3:40 PM
If I was in your shoes I would change tactics and work on a detailed alternative plan to present. If you feel that the work is not needed do you have professional quotes to back up your claim? If not, I would get them. If you feel that the work can be spread out over a longer duration present some fact based reasons on why and suggest that the work be done over x amount of years with smaller periodic assessments. In other words present some detailed alternatives.

Well said. Instead of complaining get off your butt and provide hard fact alternatives.

BenA2 (Texas)
Posts: 1,273

Posted:

It's important to remember that the written statutes are only part of the law. Years of court precedents matter. It's possible that you may have recourse, despite your governing documents. For 15K I would consult an attorney.

The need for a special assessment is a sign of mismanagement except in extreme cases. Their purpose is to cover unforeseen expenses.

MarkW18
Posts: 1,290

Posted:

Guess what, small associations WILL always feel much more pain than larger associations. I managed a seven unit complex and any project required a special assessment. You live and die by the seat of your pants.

BillH10 (Texas)
Posts: 1,217

Posted:

Kay

I know it is fashionable to use the 'bully' word at this time in our society but, as someone else pointed out, you are being outvoted. Being outvoted is not being bullied. Since you are in the minority, you should learn how to deal with the fact three others do not agree with you.

We specialize in managing small condominium associations with no common area amenities. Except for one property which is three years old, our client properties range in age from 39 to 14 years old.

Without exception, every single association we manage, except the one three years old, was self-managed until eight years ago or less; every single association reserve account is woefully underfunded.

Some barely have adequate funds set aside for the insurance deductible. The underlying cause is age-old: no one wishes to be the bad guy and tell owners they are facing assessment increases now, or a special assessment sometime down the road. The owners also bear responsibility as many conflate condominium living with apartment living and choose not to face the reality that, as an owner, they are responsible for their share of the $45,000 to paint the buildings.

A $60.000 special assessment for a four-plex is unusual in our experience. What is this money needed for?

You may wish to consider alternative funding channels such as a smaller special assessment and a loan to cover the difference, assuming loans are permitted in California.

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