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GregoryT1
Posts: 315
Posted:
hi,

Tiny condo association. Would like folks who have real life example with successful outcomes and no litigation in this situation. Capitol project or emergency project where funds need to be raised. The problem I am trying to solve is to navigate a situation where folks are in the mindset that they may not have the cash for the project. Actually it is a prioritization on other personal items and not the building. The association has a reputation of very low dues and no reserves. Mindset of no reserves and keep dues incredibly low. All the documents and law is in assoc favor. I will need help in the soft people skills in navigating this item. I am curious on real life examples. I do know of a case of an emergency repair in a small building. Everyone pitched in to pay except one unit. Eventually a lawyer was hired and there is a court case coming up against the one unit. I want to avoid that outcome. We have successfully completed many projects through special assessments. Not ideal.
ElleN (Idaho)
Posts: 4,420
Posted:
The goal is to optimize the chances of getting the needed owner votes to build reserves.

Regular presentations to owners by companies that perform reserve studies are essential, in my opinion. The reserve company staff will speak to infrastructure as well as budgeting (read: the need to increase assessments, with exact figures presented, ultimately, probably spread over several years). Take questions. Then be ready: After several months of discussion, the few owners in your condo will either support reserve funding, or they will not. One has to accept when they have done all they could, especially with a tiny association with less than six units, say.

This presentation should be repeated at least once a year, to drive home the point. Repeat and repeat again.

As much as people like to use the phrase "soft skills," it is still just a metaphor. No "soft skills" silver bullet exists. The need to build reserves either sells itself based on an emotion-free presentation of the condition of infrastructure, or it is "no sale."
MichaelS56 (Minnesota)
Posts: 859
Posted:
What does the New Jersey state law say about HOA Replacement Reserve requirements?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
A HOA is only funded by it's members for it's members. It is a non profit but charitable one. No one can donate for a tax write off.

If your HOA needs something it needs to raise funds by raising dues or special assessment. If you think a loan will save you, then you are not factoring in loan payments to your monthly costs.

Sooner or later your going to have to swallow the hard truth. Volunteering only gets you so far.

Former HOA President
MichaelS56 (Minnesota)
Posts: 859
Posted:
Just found that New Jersey governor just signed a new law, S2760/A4384. Please take a moment to read it as it pertains to both building inspections and a Replacement Reserve requirment.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By MichaelS56 on 03/25/2024 10:04 AM
Just found that New Jersey governor just signed a new law, S2760/A4384. Please take a moment to read it as it pertains to both building inspections and a Replacement Reserve requirment.
I checked it out. Very good. This is a very powerful tool that the OP should wield.
CathyA3 (Ohio)
Posts: 6,299
Posted:
I think the best "soft skill" you can have is a reputation for straight talk: transparency, no BS, and facts that you can support.

It also helps, I think, if you don't approach things as the board telling people what to do but as challenges that the community has to work together to solve.

Lay out the options for funding needed expenses. Explain the different options (loan vs. special assessment) and what those differences mean in hard dollars. If you're down to this choice, ask people which they prefer and why. If it's possible to delay some spending, tell them what that may actually mean. Possible consequences include increased total cost when the item is eventually repaired or replaced, banks not willing to approve mortgages if the community has no reserves, lower property values because sellers will only be able to sell to cash buyers, which in turn makes a community vulnerable to investors).

Also accept the fact that you probably won't have everyone on board. It goes with the territory.
SheliaH (Indiana)
Posts: 6,964
Posted:
I’d start with reminding people of Surfside – in fact, I posted a link to an article on an upcoming Florida state law that discusses structural reports, their effect on reserves in condo communities – and why a whole lot of people in the Sunshine state have heavy decisions to make. Here’s a link - https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/369148/view/topic/Default.aspx

As Lori, one of the Florida posters noted, Surfside happened in part because the owners refused to pony up the money for repairs, although they were told (more than once) that problems were developing. No one could have predicted the building collapsing, but when you don’t make plans to expect the worst and hope for the best – or do regular maintenance – things can happen, and life won’t always wait until you’ve moved out.

You said you’re aware of a case where an emergency repair was necessary and all but one helped out except for one owner and now he/she’s being sued. That’s another story you can share with your neighbors. Assuming that association did everything correctly, there’s a good chance this owner will lose and have to pay his/her legal fees, the association’s fees (if they were smart enough to request them if they should win) AND the special assessment. That doesn’t make any sense, but people shoot themselves in the foot like this all the time.

It IS a pain in the butt to consider that you might not be able to go on vacation or buy a new car or even upgrade your refrigerator because your association needs money to pay for new roofing that you’ve put off for 10 years because everyone was screaming about not having the money and assessments ā€œbeing too highā€ anyway. I’ve lived in my townhouse community for over 20 years and have learned (sometimes painfully) that homeownership is not, nor has it ever been cheap. When you live in a community where people share in the expenses related to upkeep of the common areas (that you all own), there are times where you have to make difficult decisions and can’t just yell at the board or the property manager. I know you want to be nice about this, but depending on what needs to happen, that may no longer be an option. You can be professional and firm in what you say and should be willing to answer as many questions as are asked.

I’d also share the numbers with the homeowners, along with a little past history -show them how costs have increased since the building was built (that’s as simple as plugging numbers in the inflation calculator – google it and knock yourself out). Encourage people to do their own research and come up with better options – maybe there are some no one’s thought of yet, but also remind them the days of super low assessments and no reserves are gone forever, and starting now, the association budget will be based on reality, not fantasy. After that, people need to make up their own minds and it’s possible some still won’t get it. Good luck to you.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
GregoryT1
Posts: 315
Posted:
Hi all,

Yes the bill was passed in NJ. I already informed the building. The goal is 2025 structure engineer report, reserve study and then in 2026 reserves are starting. Those are the three takeaways from the bill and it really supports the condo docs. The bill was reaction to the Champlain building collapse. A capitol project coming up my goal is for professional inspector to give a professional opinion and report. The missing piece is the emergency situation and start conveying the idea that they will need to understand the association has needs and that trumps over their individual ideas on what they think the building wants. A lot of the moving parts have professional reports to be written up. The emergency item I have to start socializing do they understand the implications of having no reserves and low dues what that means for all of the owners. Thanks to all for responding. What I will do periodically give updates when something gets done and how it was done latter in the year. Ears are open for further comments.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By GregoryT1 on 03/25/2024 10:41 AM
The emergency item I have to start socializing do they understand the implications of having no reserves and low dues what that means for all of the owners.
"Socializing" is a poor euphemism for "nagging."

Nagging never works.
GregoryT1
Posts: 315
Posted:
Hi all,

This is for posterity,

Reserves and engineering was approved. I used links, webinars to pass along information so instead of being me the piƱata and getting hit I followed all of the advice and shifted the focus on info to the internet etc. What I realized no one except one person actually read anything or become more educated. In any case very stressful but at the end a 20+ year old condo assn looks like in 2025 will start reserves. It's approved and a matter of collecting the money to do the reserve study and then get the funding going. No more here unless something blows up.

For all of you it was just a response to this thread but for me it was major help and I say thanks!
CathyA3 (Ohio)
Posts: 6,299
Posted:
Excellent!

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