assessments

I live in a condominium in Massachusetts and am a new HOA trustee. In reviewing the condo documents and by laws, the only reference to special assessments states," Condominium dues or charges shall include an adequate reserve fund for maintenance, repairs and replacement of those common elements that must be replaced on a periodic basis and shall be payable in regular installments rather than by special assessments."

A replacement to a common elements is needing to take place. We have almost 1 years operating expenses in reserves, but may want to leave that untouched for a future project. Do we need to increase dues to cover the costs of this project or can we special assessment for it? Does it require residents vote if we special assess because of the passage above?

Thanks for your help!

What Tim said.

You don't say how old your community is or what common areas you have, and the reserve fund should be funded in a way that everything can be replaced at the appropriate time. Right now, you have this element, but you will still need to keep the deposits going for something else that comes up perhaps a year or five years from now.

Have you read the most recent reserve study? That will give you a better idea on what should be happening with reserves, assuming it's being funded according to the study recommendations. Then look at the income-expense statements for the past five years or so, along with board meeting minutes. Have there been other replacements. Any underfunded or no deposits at all? If not, why not?

Somehow I get the feeling that your assessments haven't kept up with inflation and now you're looking at an expensive replacement that will deplete the fund. That will put you in real trouble, so the may need to decide if they can put off that repair for a year and increase assessments to make larger deposits to the fund. There should already be a portion of regular assessments that gets deposited and if it hasn't gone up, that's a problem.

You can opt for a special assessment, which will mean homeowner approval in most cases, so be prepared to run the numbers, be honest with the homeowners about the options, pros and cons of each, put it to a vote and whatever happens happens.

Thank you for your help!