inability to pay assessment

We are putting a new roof on our complex and each unit is being assessed between $3,700 to $7,000 based on the size of their unit. Some unit owners are claiming this expense is a "hardship" and want extended time to pay their assessment. 1.If we offer and "hardship" extension to one person, how many more will ask for the same? 2.If we offer a hardship and give them an extra year to pay their assessment, how do we know that they will pay in the extra time given? Would we need to hire a lawyer to draw up and extended payment period for some units? Who pays the lawyer fees? I understand that people have difficult financial times, but why is the HOA expected to make special arrangement for the homeowners financial responsibility?

I agree with Cathy. Also, you should then either review your reserves study, which apparently was other a)woefully inadequate, b)actively ignored by the board, or c)non existent.

Well if they do not pay then the others not have to pay more to cover them? Plus need to add the expense of adding a lien. Which is best option. It assures they will pay or they can not sell property.

Making a payment plan with those people you lien may help them.

It just sounds like some possible bad planning from the start on this project. Where were the reserves funded to cover this item?

NA1 in my HOA some neighbors want to install a pool and clubhouse. I told them that would raise dues to close to $500 a month plus the few thousand in special assessment to build a possible $300 to $500 K pool/clubhouse used 3 months of the year.

I got an ear full of how wrong I was about how much it would cost. Plus it was okay to kick in 1 to 2 k for the project... I am like NOT from every household it is not feasible. Your adding on a few hundred a month to someones budget who already is struggling to afford the home they bought.

It seems a little unfair to say the least of how people should be able to afford this or that. One should save for emergencies etc. however when it comes to pay for said emergency it does not mean they can.

The reserve account was underfunded for the past 30 years by 30 years of poor management companies and boards that were intimidated by homeowners to adequately fund the reserves. Now, all 5 of the new board members are left trying to figure this out, and guess who the homeowners are blaming? The roof was scheduled to be replaced in 2016, the previous board members never got it done.

Yes, a home equity loan, a bank loan, a loan from a relative, a credit card, we have mentioned all of these solutions at board meetings and the response is "some people are uncomfortable taking out loans." Of course if it is for a trip, or a boat, or a lake home, or a new car then they are perfectly fine with taking out a loan.

I don't see a problem with a payment plan because most people don't have $3700 - $7000 sitting around for times such as this. There's nothing wrong with asking those people to provide verifiable written proof of hardship and using that to tailor your payment plan - we do this when people are behind in assessments. It's one thing to issue a plan when someone has had job loss or major illness, but another because they'd rather spend the money in an upcoming trip to Vegas.

I'd start with a standard payment plan for everyone and if someone needs an altered version, they can provide proof of hardship. It's not about getting in anyone's business- most creditors would request the same thing if you request a plan for your car note or student loan. You can work with your property man5on how the request should be submitted and securing private personal information. The board's decision on accepting a plan should be final and subject to review after 6 months or do to see if the homeowner has been compliant.

One thing homeowners shoukd be told is that some buildings might need repair sooner, so they will likely have to come up with their share immediately. They should talk to their own banks to see what their options are. Maybe the association's bank can come up with an offer for homeowners at a competitive interest rate (and an incentive to encourage early payoff?)

As David noted, your board should be looking at getting a reserve study to see where you're at financially, especiallyif it's been five years or more since the last one. The recommendations should be followed as closely as possible and in this case, it appears the board might not have raised assessments as it should. No one wants to pay more for anything, but they have to realize that homeownership has never been cheap, and this is why it's critical to prepare.

So ends my first post of the year - hope everyone had a good holiday!

I assume the roof project had been discussed for several months before the special assessment was announced, so if people are now complaining, they had the chance to say something earlier. If they didn't, that's on them.

I'm also assuming this is a special assessment and the board took whatever steps were written in the documents to get homeowner approval. If not, that's a big problem and you might have to prepare a nastygram from someone's attorney. That might delay the June 30 deadline, which may lead to more problems. Hope y'all dotted your I's and crossed your T's before going on this adventure.

That said, finances can and do change on a dime - didn't the board realize some people might run into something unexpected and perhaps they should have built in some contingencies?

The homeowners are not "suddenly" asked to pay several thousand dollars. They have known since 2026 that a new roof was needed. Previous boards could have made sure this happened at a fraction of the cost it will be today.

A new pool and clubhouse would almost certainly be considered a capital improvement that would require an amendment to the CC&Rs that is approved by a (super)majority of homeowners (67% or 74%). And construction costs are only part of it. You have operations (water, chemicals, inspections) plus staff to supervise plus significant increases to your insurance. If the enough of the community doesn't want this (25% or 33%) then it isn't happening no matter how vocal some people are.

How many roofs are there? With your language of "the roof," it sounds like your HOA is one condo building, Christine?

I should add I am 100% against the pool and clubhouse. I am the one who puts reality into the conversation. These are young people who never lived in a HOA before. Plus we are sandwiched between the "rich" neighborhoods in town. They have clubhouse and golf courses etc...

I do point out the changes required, money, maintenance, and lack of use. They just think money falls from mommy and daddy. That one should have 1K at a drop of a hat ...

When I was unemployed and wiped out where could not buy anything at the dollar tree.. My laptop broke. My only means for getting a job. I had to scrape up and pray to buy a cheap one. After someone saw I posted had bought a laptop,, they were like I was not broke. That I had money. I did not have a dime in my piggy bank. So do not assume buying a big purchase or a trip means money. They could be taking a trip for a funeral or job search.

And that is how it happens folks, except I would not blame the past management - they take direction from the Board.
The day of reckoning has come. Your duty is to the Association - period. Here is my advice, it is tough love.

No extensions, no payment plans. Understand you have 3 types of owners. Those that can afford it, will rationally understand the need and will pay. Those who can afford it with some life style modification, but they don’t want to pay, rationalize it in a way they should not pay and/ or tell you they can’t. And those that can’t pay.

If you try to help those who can’t pay, you are extending an existing problem. Your association cannot have owners who are cannot afford to live there . It is likely the current Board will take action so the HOA doesn’t find itself in the same situation in the future. That means realistic reserve funding and a fee increase on top of the emergency assessment. If they can’t afford to live in your HOA, where they can afford to live is their problem and not yours.

The folks who can pay and will complain about it. - they helped get the HOA in the situation. They may get angry, they may claim the replacement is unneeded right now, they may claim your estimates are too high, they may threaten to remove you from the Board. Ignore them and do your duty.

What happens long term will tell you if you are staying or selling.

Adding one more piece of advice. Update your collection policy and send it with the assessment . Your policy should be clear there are late charges and if they don’t pay it’s headed to the attorney for collection and possible foreclosure.

What we have offered thus far is 6 months to pay, no interest, no penalties. What the homeowners want is for the HOA to take out at 3-5 year loan, paying $45,000 to $60,000 in interest so they can have "small" monthly payments. Oh, it must be said that we have another $450,000 in repairs that need to be done on our 3 buildings within 2-3 years, which is why the board is refusing to take out a 3-5 year loan. And yes, you are correct, homeowners are mad, cursing, threatening, making a ruckus at meetings, you know the type. We, the board, believe we are exercising our fiduciary responsibilities to protect the investment that every homeowner has made in these buildings. I really appreciate each of you that have posted your suggestions and ideas. Thank you so much!! Christine

THAT'S A GOOD THOUGHT, ELLEN. WE SHOULD CONSIDER THAT THE OWNERS MIGHT MOVE TO REPLACE US. CHRISTINE

I too wonder about the financial math skills of the "just borrow the money" crowd.

Perhaps a town hall presenting real life dollar figures (loan vs. special assessment) to owners would be worthwhile. Beat the bustards down with numbers (real ones).

It's worth asking (no stone unturned, and all that). But the housing market has been pretty hot for a number of years, and roofers have had no shortage of work. Things have slowed down some as a result of higher interest rates, but in my area homes are still selling well. You're also looking at having the work done during prime building season, when everybody is busy. So I wouldn't expect roofers to cut a deal unless they're looking for work. I'd actually be a bit concerned if they were willing to do so - I'd wonder why.

I second the idea of holding a town hall and explaining in gory detail the true cost of borrowing the money. And that's assuming you could even get a loan - banks usually give some side eye to communities without adequate reserves, and they'll charge higher interest rates to riskier borrowers. A loan is a sure fire way of paying more for less, and paying off a loan means biting the bullet and increasing those assessments. Loans put more money into the hands of those who have plenty - ie., the bankers - and take it out of the hands of those without. The interest you pay on the loan is a surcharge for poor planning (*). It's depressing that so few people understand how this works.

(* Yes, I know it's more complicated than that. But the poor planning definitely applies in this case.)

Correction, owners have known since 2012 that the roof needed replacing; it was scheduled to be started in 2016. Previous board members had the attitude of "if it's not leaking don't fix it". So, now it is leaking and the price quote has doubled over the past 8 years.

This might be what has to happen!!

By 150 people, I think that means 150 Units, Christine? If so, 5 units really is a tiny minority. It sounds like you're done all the right things in terms of notifying owners and explaining things to them.

I'll just add that sometimes an outside "expert's" in person explanation, power point presentation, etc. reaches people.

Correction: We gave 96 units, about 150 people, maybe less. Christine

NA1, you are EXACTLY CORRECT.

YES NA1, THIS IS EXACTLY WHAT THE BOARD HAS BEEN PROMOTING AND PREACHING. "BUT I'M NOT COMFORTABLE TAKING OUT A LOAN" OR "I'M ALREADY DOING DEBT CONSOLIDATION SO I CAN'T TAKE OUT ANOTHER LOAN."

“WE DON’T OWE YOU A PLACE OF YOUR CHOOSING TO LIVE”.