Changing Reserve Assessments from Sq Ft to Flat Rate

Our association made a motion that passed in the annual meeting to change the way reserves are funded from being based on the square footage of the unit to a flat rate charge for each unit. I thought this had to be down through a change in the declarations not a vote in an annual meeting. Does anyone know if this is legal to change simply by a vote and not an amendment to the declarations?

They changed from the assessment being based on the square footage of a unit to charging every unit the same amount. Therefore the smaller units had a significant increase in their assessment for funding the reserve account. Before they were charged less because they had less square footage. They did not change the Bylaws or Declarations. They simply passed a motion at the annual meeting. I do not know if this is legal to do and that is my question.

GeraldT and Bob.,
First are we talking about a condo, I would assume so. How is it possible to charge individual assessment and dedicate that sum to the Reserve fund? Is this a special assessment? Bob, you say this assessment is based on square feet as dictated by the what? By laws, state statute, master deed or what?

This amounts to a proportional assessment. These kinds of fees are set by the developer prior to turn-over and relate to the original advertised price of the unit. I would not suggest that there is a separate fund to bill owners for Reserve Account. If that is what you are doing then you have to use this proportionment for all fees to the Regime. Your logic of charging different amounts because of square feet is flawed. Supposse a unit overlooked a mountain range and beautiful forest and a big lake and had 1500 sq, ft and the original value was 400K. Other side of bldg, same sq. ft. and unit overlooks the city dump. Sq. ft. is not always a measure of value. Someone, sometime will give you fits about this.

I think Gerald and I feel the same, what are you trying to do and why? If you want to apportion it has to apply to all fees. If your your fees are equal they have to be equal for all fees. More information please.

Bob,
What ever your original documents stated about how to collect fees and when to collect them and for what purpose. You may not want to debate the rational but the rational that was used to establish the fees is the amounts you have to charge and they probably can't be changed except as your document directs, my condo is 100% vote.

It is improper and/or illegal to change any of your Documents. Starting with the State Statute, Corporation papers, Master Deed and By-Laws, all require a vote of the council (members). This just about has to be in your documents, if not, you meed to appoint a committee and Update all your documents.

I take it your operating expenses include upkeep of the Real Property, which would include up keep of roads, parking, common electric, all common Property insurance, etc. If you are charging a prorated fee based on some criteria for anything that is common, limited common, or common water, common electricity, what ever, you cannot just take a portion of the common expenses and treat it differently.

A question. For whatever reason, say deep pockets come in and wants to buy all 20 units and all owners agree. He comes in and lays some cash on the table. How are you going to figure who get what percentage of the pie. Are your owners that have been paying more into the reserve going to get a bigger pices? In a condo, you are much fairer if you proportion the fees (all) on the value of the property, then when the money is on the table, you can distribute it according to the unit apportion.

So, no you can not get rid of the sq. ft. apportion and I suspect that is not the only fees that are apportioned.

BobP3 - I'm not debating the rationale. What I was trying to explain to you is that the amount that the Board allocates to reserves could still have been the same per unit even though individual overall assessments may have varied. Reserves are for the replacement of the common elements, and therefore should be equal to all 20 units. Is it or is it not written into your Declaration or governing documents that reserve and maintenance allocations can vary per unit, or each unit pays the same? If your docs are silent on the subject and the Board has the power to levy than what they are doing by making everyone pay the same amount is fair.

Back to the basic issue - if the documents call for assessments to be based on square footage - any assessment levied - no matter what it is for - has to follow that formula. It doesn't matter what the end use is or how is accounted for - the only way it can be changed is by amending the documents, which, when it comes to assessment allocations, will be anywhere from 2/3 to 100% to amend.

Joe