Special Assessment and more

Started by TerriM8 • 12 replies • 504 views

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TerriM8 (Missouri)
Posts: 21

Posted:

First of all, I have posted several times, and have received great advice, so thank you.

Our board has issued a special assessment for our parking lot. It is definitely in need of repair, and we support this project. We have been told three times (two times in writing from the board president) that the total is just under $100,000. Several owners have asked for the bid to be posted to our HOA website, and they have not posted the bid. Our assessment shows the total to be $105,000. So owners have questioned the $5,000 difference. We were told the name of the company who was awarded the bid. I called that company to get the bid. I told them my name, HOA name, and that I wondered if I could get the total bid and what the project included. He told me the total and it is actually $5,000 less than what the board is assessing owners.

So, today I received a letter from the board. It states, "The board is under no legal obligation to post vendor bids, and therefore has no intention of doing so. Moreover, you have violated normal vendor management protocols by attempting to get the quote directly from the vendor. Please be advised the Board will take legal action regarding any future unauthorized attempts to independently interact with any HOA affiliated vendors."

I feel as though I am an owner, and after weeks pass with no bid being posted, I have a right to see what my money is going for. Many owners requested this, I just took the next step and made a phone call to the company that could provide the information and they did.

Thoughts on this? I have no intention of responding to the board. We have an HOA meeting soon, and I guess I will ask about the discrepancy in the bid, unless they provide that information at the meeting. Our decs and bylaws do not mention posting of bids, but the board has posted emergency special assessment bids twice in the last two years, one was just posted 8 months ago. So their routine has been to post bids in the past so that owners can see what we are purchasing/paying for.

I can't find any information about "violation of normal vendor management protocols."

I am from Missouri and am in the process of checking HOA/Condo Law.

Thanks

AugustinD
Posts: 3,698

Posted:

TerriM8, what year was your condominium created? If the year your condo was created was after 1983, then the following section of the Missouri Condo Act applies:

448.3-118. Association records. — The association shall keep financial records sufficiently detailed to enable the association to comply with section 448.4-107. All financial and other records shall be made reasonably available for examination by any unit owner and his authorized agents.

If your COA was created after 1983, then in my opinion you have a lawful right to see the COA's record of the bid. You could write a short, to the point, drama- and emotion-free letter to the COA and request a copy of the bid. The letter should cite the above statute section.

Note that the Board is not required to post bids. But IMO, it is required to provide a record of the bid to owners who request it pursuant to the Missouri Condo statute.

Your COA's Bylaws might also have a section on owners' right to inspect records. If so, then quote this as well to the Board in your records inspection request.

I agree with the ignoring the Board's stupidly worded warning. But I also do not fault the Board for telling owners not to communicate with vendors. Why? Because for one, it's entirely possible some owners will communicate in a way that is harassing, driving vendors away. In other words, the owner could be interfering with the COA corporation's contractual relationship with the vendor.

As for the Board assessing all owners for a $105,000 expense, I am not sure this is inappropriate. Cost over-runs are common. A bid is only an estimate, after all. Bids often have language in them allowing a vendor to go over the bid under certain conditions.

BarbaraT1 (Texas)
Posts: 821

Posted:

A special assessment can (and I think should)include the extra administrative costs associated with levying the assessment and the cost of collections for owners who do not pay, and a contingency for cost overruns of the project itself. I don’t think $105,000 is enough frankly, if the bid is $100,000.

If there is an overage it can be refunded to the members once the work is complete.

TerriM8 (Missouri)
Posts: 21

Posted:

Thanks. We do follow MO Condo Act. Our bylaws do state owners can inspect records.
You have provided good information. Previous assessments have been posted and there were no additional amounts added for over-runs so we were probably fortunate. Hopefully looking at the bid will provide some clarification.

KerryL1 (California)
Posts: 14,550

Posted:

In CA, the HOA is not required to post bids or give them to owners. Owners are, however, permitted to review & have copies of executed contracts. If your HOA is under the statutes Augustin cites, do write your request to review or have a copy of the executed contract. Do not use the word "bid(s)."

All agree with other that $5,000 above whatever the bid was, as in the final contract is not unusual. When you read the contract, you'll see a section on "change orders," or similar. Unexpected stuff does emerge and $5,000 on a $100k contract isn't much.

JohnT38 (South Carolina)
Posts: 1,631

Posted:

Since you have not seen the bid the extra cost could be associated with a related expense. For example, when we had our parking lot re-done, the asphalt company did not do the concrete curbs and and this work was done by a separate company for an additional fee.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By KerryL1 on 03/31/2022 6:58 PM
In CA, the HOA is not required to post bids or give them to owners. Owners are, however, permitted to review & have copies of executed contracts. If your HOA is under the statutes Augustin cites, do write your request to review or have a copy of the executed contract. Do not use the word "bid(s)."

She's in Missouri, not California. It appears to me that the bid (which apparently has been accepted) is a record she can lawfully inspect.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Terri

I say only final contracts can be inspected, not the bids.

KerryL1 (California)
Posts: 14,550

Posted:

Right, OP is in MO. I was just giving an example of a different state, and trying to show the difference between bids and executed contracts.

TerriM8 (Missouri)
Posts: 21

Posted:

I guess in my initial post, I should not have used the word bid, and should have called it a contract.

Hopefully the board will share the contract at our upcoming meeting, or I will request to see it.

This forum is very helpful. Thanks

LoriM15 (Florida)
Posts: 1,009

Posted:

I would ask at the board meeting why they needed to do a special assessment to repair the parking lot. Paving is usually included in a reserve study. Your board should have been putting money in reserve for this repair. That's water under the bridge now, but you should encourage the board to 1) get a reserve study done if there isn't one and 2) get your monthly dues budgeted so you don't have do special assessments in the future for other repairs.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By LoriM15 on 04/01/2022 12:19 PM
I would ask at the board meeting why they needed to do a special assessment to repair the parking lot. Paving is usually included in a reserve study. Your board should have been putting money in reserve for this repair. That's water under the bridge now, but you should encourage the board to 1) get a reserve study done if there isn't one and 2) get your monthly dues budgeted so you don't have do special assessments in the future for other repairs.

I agree.

TimB4 (Tennessee)
Posts: 21,059

Posted:

I'm looking at this differently (the next time vs. right now).

I think the OP should:

1) Ask about the reserve study (if one exists).
2) Ask why the reserves were not fully funded (could be the membership said no or the board simply never wanted to raise assessments).
3) Ask what the board is doing to make sure that this won't happen again (i.e. increased assessments, new or first reserve study, etc.)

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