Painting of Exterior Buildings

I serve as VP of the Board and helped with the finances to figure out the dollars needed for the Special Assessment for the exterior painting of the buildings. Our bylaws indicate a vote of 66 2/3 would be needed for any assessment over $1500. Please see attached copy explaining assessment and Special Assessment. As a board we did not take a 66 2/3 vote among the co-owners, should we have and are we in trouble legally?

My take is the same as above. In para 9, special assessments for items identified as (a), (b), (c) and (d) can be levied at the board's sole discretion. Special assessments for the categories (a), (b), (c) identified in para 10 would require the 2/3 owner consent.

My take is paragraph 9 also deals with special assessments. From 9:
the Board shall have the authority to increase the general assessments or to levy such additional assessment or assessments as it shall deem to be necessary

I take "additional assessments" to be special assessments, i.e. not included in the annual budget or the normal annual assessment.

Paragraph 10 has this:
Special assessments / in addition to those authorized in subparagraphs 9 (a) through (d) above ..

This also says that paragraph 9 includes special assessments.

I think the $1500 amount that Wendy is referring to only applies to additions/improvements, not maintenance (painting, for example). Since painting is not an "addition", the $1500 limit would not apply.

So that I understand this properly, if the board wanted to install a entrance monument, where one never existed, costing $2000.00, that would require a vote of the co-owners, but a painting project, which money should have been set aside, costing $100,000 can be approved solely by the Board of Directors?

So, in your opinion, does a special assessment require a membership vote?

So should the membership vote be the board or the co-owners?

The approval of the Special Assessment should have been by the Owners.

When an assessment pursuant to 10 (a), (b), or (c) is sought, the co-owners must vote on it as described in 10.

But the assessment you described in your first post is consistent with what is in 9. For situations described in 9, no co-owner vote is required.

In short, I agree with DouglasK1. I do not agree with MaxB4.

Note to HOATalk readers: Michigan HOA/COA bylaws tend to include sections that in other states, are a part of the CC&Rs.

We did not have enough monies in the reserve account and therefore, the board elected a special assessment. I believe we should have had the owners vote on the painting project and the dollar value for the assessment. The Management company is telling the board we do not need any votes, the special assessment can be made by the board.

I handle implementing special assessments all the time.

A number of CCRs, not Bylaws will spell out the rules for members approval an increase in assessments and special assessments. A typical scenario would be 20% or less for assessments and 5% or less of the total annual expenses of an association for special assessments. A reserve item, such as painting, is not typical maintenance item like fixing a sprinkler head.

Doesn't matter. From Bylaw 9 of what WendyZ attached in her first post: "to provide for the maintenance, repair or replacement of existing common elements." Per the rest of Bylaw 9, no ownership vote is required.

This is from a Michigan law firm:

Special Assessments

Similar to additional assessments, there are typically specific circumstances when an association is permitted to levy a special assessment. Condominium bylaws frequently permit the imposition of a special assessment for: (1) providing additions to the Common Elements in excess of a certain amount; (2) assessments to purchase a unit upon foreclosure of the lien (although this is sometimes allowed under the additional assessment powers); or (3) assessments for any other appropriate purpose not elsewhere described. Special assessments differ from additional assessments in that they must usually be approved by a certain percentage of the co-owners before they can be levied. The number of co-owners required to approve a special assessment varies from one association to the next, but approval by at least fifty percent of the co-owners of an association is common. In short, a co-owner should review their condominium bylaws to determine the circumstances in which a special assessment may be levied and whether or not co-owner approval is required.

here is the full article: https://micondolaw.com/2015/09/04/the-differences-between-an-additional-assessment-and-a-special-assessment-in-a-michigan-condominium-association/

The OP's Board is complying with its bylaws.

32

Of course not. The new monument is not even mentioned in the covenants (bylaws in Michigan?), so adding the monument would require an amendment. The Board's responsibility to maintain the common elements is manifest in the covenants (bylaws in Michigan?). No consent of the owners is needed.

You can apply your reasoning to what Florida statutes (and certain other states' statutes) say that limit, to some extent, the amount of assessments and special assessments, and you'd also be wrong.

I do not think the OP understands the language of covenants. But if she wants, sure, go ahead and ask the board to consult with the HOA/COA attorney.

Wendy

I just finished getting a special assessment approved to repair all the roofs in a complex in addition to replacing the underlayment. It was a $800,000.00 project that the association didn't have in their reserves. Instead of 5 years, repayment was 15 years at a cost of $9500.00 per unit. Approval had to be a majority of quorum, which by state statues, quorum is set at a majority of members.

Yes, out Boards can raise monthly 20% annually with a vote of owners, anything over requires the same approval as above.

If the board wants to add a monument to their complex, it does not have to be in their covanent to do so. If the costs cross a certain threshold, then owner vote is required.

If Augustin's legal advice satisfies your inquiry, then we are all good here.

John,

They raised assessments by $25.00 monthly, I am ok with that.

They did a special assessment of additional $225.00 per month. You're ok what that, with just a board vote?

Because her Bylaws specifically state, special assessments require more than 66 2/3% approval, plain and simple. Assessment and Special Assessment are two separate beasts.

Max

I do not see the $225.00 per month as a Special Assessment. I see it as an Assessment that expires in association with one ($25) that does not expire. Might this be a semantics issue?

You really need to learn how to separate assessment and special assessment. They have two certain voting mechanisms. Like JohnC's community they can raise assessments all they want, outside of the additions exceeeding $1500.00, with just a board vote.

A special assessment requires a membersip vote, for anything, including additions exceeding $1500.00. JohnC's community has to vote on assessments.

If, by your reasoning, the Surfside condo may not have collapes if their board had voted on their own to raise the $9M to maintain the strucrual intergrity of the buidling.

Could somebody please define for the audience what a special assessment is for?

I was taught, assessments are to pay for the day to day operations of an HOA. Special Assessments are to pay for capital improvement and large projects that aren't done on a day-to-day basis. Painting your entire complex is not a day-to-day expense, it is long term.

If you utilities, which you use on a day-to-day basis, increase 10% across, that, IMO, would call for an increase in assessments. More day to day irrigation cost increase, pool guy increases his rates, landscaper raises monthly fees.

Paying to replace your roofs every 30 years where you have a shortfall in your reserves would be a special assessment.

Whatever the covenants say it's for.

I checked with a HOA attorney friend of mine. The board can increase assessments as they wish without owner approval. Special assessments must be approved by the owners.

Someone please show us where the attached document specifically states "additional assessments"

I agree with Max.

The owners are owed a budget in an annual basis and the board "assesses" them based on this budget. If the regular budget proves insufficient to maintain the property or to allow for expansions under $1,500, the board can change the regular assessment. I think paragraph 9 explicitly gives the board the sole authority to raise regular dues for "regular" operational purposes.

A dedicated vote to raise money for exterior painting is absolutely a "special assessment." As such, the owners should vote on it. It's a capital project due to the perceived large scale of the project.

NOTE: This is spectator sport for us.

Considering how the answers to this post appear to be split my advice to the OP is pay a lawyer in your state and get an answer in writing that you can fall back on.