Special Assesments Question

It says in our By-Laws and Articles that "Special Assessments" for a defined project may only be added to dues for a period of one year. Other than that, a specified percentage of dues at tops may be added to increased dues.

Our HOA had a special assessment of $100.00 per owned lot that was never ever reduced at the end of that project and year. Are the additional years of that increased dues amount owed back to the members who have paid it now for years?

Thank you for all your GREAT answers. This site rocks!

-Roberta

A special assessment is used for a specific purpose, as you said, but that doesn't mean regular assessments can't and won't go up.

The cost of living always goes up - what cost $5 give years ago won't cost the same 5 years later. Labor, insurance, materials and all that goes up for different reasons - is there anything you pay for in YOUR life that hasn't gone up? If not, why do you expect the same of your assessments?

Go back and take a look at the income-expense statements for your community for the last five years. You may notice some lie items have gone up faster than others and it's ok to ask the board why that is. Delinquencies may also be a factor - if they increase, everyone else ends up paying more, because they have to indirectly subsidize those who don't pay (yes, I know that stinks - that was and is the story of a lot of communities, including mine).

Generally, special assessments should be rare. They often mean there isn't enough money in the operating budget and reserves to pay for major repairs to the common areas like roofing. That may have happened because of a major disaster like a tornado, or the project cost far more than expected (because previous boards kept putting it off) or reserves weren't funded properly or you don't have a reserve fund at all. And perhaps a little more.

Hi Exact language would not let me copy and paste so had to retype it:

"
Special Assessments for Capital Improvements: In addition to the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, reconstruction, repair or replacement of a capital improvement upon the Common areas, including fixtures and personal property related thereto, provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of members who are voting unperson or y proxy at a meeting called for this purpose and shall also have the approval of any institutional lender lending mortgages on residential units in any part of the Properties.

~~~

The maximum annual assessment shall not be increased more than five percent ent (5%) above the minimum annual assess meant for the previous year with a vote of the membership.

—-

“the maximum annual assessment may be increased above five percent (5%) by a vote of two thirds (2/3) of each class of membership who are voting in person or by proxy at a meeting duly called for this purpose. "

Roberta,

I meant the language of the multi year special assessment ... how does it read?

This is the only "assessment" I can see in the By-Laws and Articles. I am not sure how much money the Association has as they have withheld all inspections by the members. (That is in court by a group of members who have the funds to take it to court.)

Roberta,

I am asking what the special assessment language was - it was voted on, it was passed - what did it say?

100. per month for one year

This sounds fuzzier than it did from the first post.

Since there is no specific language known for the special assessment (I mean the actual language in the approved special assessment) - and, perhaps there was a Board approved assessment increase from from 20 years ago (minutes?) ... not sure how discussing this makes sense.

Various members have brought this up repeatedly over the years. It seems to have been a weird (and possibly illegal) way to get around the 5% max dues raise annually permitted. I believe the problem(s) arose from the Boards in that some of them were not financially adept, we had no audits, and recent BOD's have been acting in head-shaking manners.

What I see now is that a new force is rising among homeowners here. I am very encouraged, but cautiously so.

It is because this site has been so informative for me and other of our members, that I have taken the question of that "continued assessment" here. I am not sure what, if anything can or should be done about it. But this is a site where I have found many answers and much wisdom. And as I increase my own understanding of various issues, I try to pass that along.

Thank you all.

What Sam said.

You didn't say what type of common areas you have, but if your dues are $100 a year and haven't changed in awhile, I'd be more concerned that's not keeping up with inflation. If your board hasn't been candid regarding the financials, especially if people have complained, it's past time for the rest of you to sack this board and elect a new one (you may need to one of the new breed).

Take a look at your documents to see what it says about recalls - if nothing's listed, there should be something about calling special homeowner meetings where you can discuss the board's conduct and conduct a recall vote at that time.

Keep in mind, that doesn't mean you'll get a refund. At this point, you need to focus on whether the budget is keeping up with inflation and your reserves are being funded properly. If you haven't had a reserve study in YEARS or the last one is older than 5 years, it's time for another one. If you're really, really, REALLY lucky, your numbers might allow the Board to hold assessments at the current rate for a year, maybe two. It might not be a refund, but it's better than nothing.

The majority of our owners thought our dues could not be raised more then 3% a year and they were wrong. Our BOD can raise our dues as much as they want to but only one time a year commencing on 01/01. Granted there is a procedure, but another issue. The 3% comes from if the owners call for a Special Meeting prior to 01/01 and reject the increase (51% of ALL OWNERS would be required to reject it), then the dues can be raised 3% without their permission. That is where the 3% figure comes from.

Roberta

So far all you have provided are "fuzzy" accusations. Like no hard figures on the $100 per month not being needed. No documentation on the Treasurer giving "himself permission" to invest $100K.

This is simply not making any sense.