How do special assessments work?

A HOA is ONLY funded by it's members FOR it's members. So if you need money to pay bills, then choices are to raise dues or have a special assessment. Which it is detailed on how to do both in your documents. A special assessment typically required a majority vote of ALL the membership. The amount is divided evenly amongst ALL the owners to pay on what the final bill is. Although some HOA's may want to "pad" that amount to cover other projects. It is best to say out front it is for this project or projects... I am not a big fan of those HOA's who say "Special assessment" for a pool cover then you find new pool furniture too... Best to have said "Cover and furniture".

Loans are an option, but they also may require a raise in dues or special assessment to make the payments.

Are you asking if you can amend a special assessment, Jack?

Well, you've done your due diligence as a board member in pointing out the problem and researching the cost. Sometimes that's all you can do - it amazes me how people are so quick to vote against their best interests or continue to think they can have champagne tastes on a Kool-Aid budget (the cheap stuff at that).

I suspect these folks hope they'll be long gone from the community by the time the caca hits the fan. You can't always protect people from themselves and the next time they're hit with a major heatwave (like many of us went through a week or so ago) or a nasty cold snap, they'll remember what you said and perhaps pay attention.

Unfortunately, it may mean a special assesment, a loan AND a major increase in , by that time. Remind your neighbors of Surfside and how part of that disaster was due to homeowners who refused to spend the money when it could have made a difference.

Keep speaking truth to power in the meantime. Read your documents to see what they say about special assessments (that should have been your first task) and then read a few older conversations on this website about special assessments. Since they're old, don't respond to them, but take notes and ask your questions in a new conversation, if necessary. Good luck.

I would start the bowl rolling now toward all the prep work for approving a special assessment. The thing is that it states to get approval for special assessment. It does not state the amount just approving one can be done. It would be nice to know exact numbers but maybe a round about number will help. Say something like we need to pass a special assessment so when the final bill comes due, we can then divide up the costs evenly. Getting approved for the special assessment in itself is the biggest hurdle. Collections will be the other...

BTW: Why do you not have a reserve fund set up for such items? If your HOA knows it is responsible for such large items, it should have had set up a reserve fund to contribute part of the dues toward for years...

So, agreeing with Melissa, are there zero reserve funds to repair/replace your HVAC system? Does it serve you entire community, so you're a condo building, or?

My HOA was in this situation years ago while in a construction defect legal action. Our rooftop HVAC system was on its last legs. So we got a loan for the replacement cost, which included renting a crane to put the new system on a 25 story roof? Our HOA assessments were collateral and we got a settlement several months later to repay the loan.

So, maybe you can try for a loan while you find a firm price to get the work done. Are you saying you have no idea whatsoever what a new system will cost or repair of the existing one? Since it's HVAC, can't you do a special assessment because it's an emergency (if your docs & state law permit?)

Maybe most condos do this, and ours does have a sq. ft. variable for water, gas, and bldg. insurance. But there's no s.f variable for reserve items. And Owners pay for their own electricity to run them. We don't know the O.P's situation.

Kerry, there may be other considerations in a high rise which result in the reserve contribution being the same for all owners.

In the properties we manage, the annual budget process determines the reserve contribution amount for the year as well as the operating expenses. Once the bottom line operating and reserve contribution amount for the year is determined, the unit percentage is applied to determine the assessment amount for each unit for the operating year. Hence, the reserve contribution for a unit is the unit percentage of the whole.

Interesting, BillH. Oh, I believed you previously. Just wanted to point out that other high rises do it differently. I'm not saying our method is good or even makes sense, but we didn't change it when we recently restated our CC&Rs.

You don't know how many times I have explained this. In order to to change it we would need all of the three to lower their condo fee and alltwo bedroom unit to vote to increase their dues and some of the 1 bedroom unit to vote to increase their dues. No person in their right mind is going to vote to increase his or her dues.