Monthly Assessments

Started by MarileeM1 • 11 replies • 1159 views

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MarileeM1 (California)
Posts: 4

Posted:

May I ask you all to provide for me the method you use for monthly assessments?

Three options we are considering now:
Square footage if your association has different size units.
Actual costs associated with actual units and land ownership.
Based on percentage of ownership of the association.

Any feedback out there?

JackieB (California)
Posts: 198

Posted:

We have 140 single family homes and each monthly assesssment is the same.
There are 4-5 different models/sq. ft.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Are these condos or villas or what type of structures? And please explain what "percent of ownership in the association" means? Normally all members are of equal in the association.

MarileeM1 (California)
Posts: 4

Posted:

There 36 townhomes (one wall connecting approx.2200 sq.ft.) and 20 condominiums stacked two story (3 sides connecting approx. 1300 sq.ft). We do not own an equal share of community property as the larger units have yards, private entry, private garage and the smaller units share with 5 others the same benefits in each building. Generally, I believe the % owned of the community is the same with most HOA's.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Marilee,

Okay, we're almost clear up here in Donnaland. The units with yards, private garage and entrys, is that also considered limited or common property or is that owner responsibility property?

RW1 (Texas)
Posts: 149

Posted:

You need legal counsel.

It is likely no matter what you do when $s are involved... it will be challenged.

MarileeM1 (California)
Posts: 4

Posted:

Sorry I am not clear. I am new to this. There is a percentage of the land itself that is owned by the unit AND a percentage of the common areas that is allocated to the units. The percentage that is common areas is the one I was referring to. I don't know how those numbers were calculated as they were a part of the CC&R's when I got here apparently changed in 1994 by the board from the original percentages of the builder. 4 different sizes of units, 4 different percentages. Is this a crazy idea? 1/2 the unit owners vehemently reject square footage and 1/2 the unit owners vehemently reject the actual usage expences allocated to the unit so I was trying to come up with something everyone will buy but still be fare to all.

MarileeM1 (California)
Posts: 4

Posted:

We already have a lawsuit on file from both opposing parties (sq.ft vs actual expence) Its a mess. That is why I am looking for alternate ideas or choosing one of the two above and create a strong case. That is why I am asking what do you guys do?

KirkW1 (Texas)
Posts: 1,665

Posted:

Unfortunately, there is not much chance that you will settle the issue outside the court at this point. I doubt seriously that you could form an argument that will get one (or the other) side to back off. You might get them to move into mediation.

I would suggest that you approach some people on both sides and ask if they would consider some sort of hybridization. Some expenses (or a percentage of the total) would be on a per unit basis. Other expenses (or a percentage of the total) would be on a per square foot basis.

This should have been spelled out in the founding documents. But from what I gather it is sometimes not spelled out clearly. If you can settle the issue, then you should immediately amend the documents to make it clear this is the way it will be. And don't settle for anything less then amending the covenants.

The unfortunate reality is though that the only winners in this case will likely be the lawyers. In most cases like this the legal costs probably exceed the amount that assessments will change by a very large margin.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Marilee,

Have you checked the Davis-Stirling Act that applies to associations in California? Maybe there's something in there. Connecticut state law mandates that assessments be equal for all units. I lived in a community in Florida where single-family units were grouped into three size categories. There were "neighborhoods" where each neighborhood was comprised of units in the same size category. The assessment depended on which neighborhood (size category of home) you lived in and was the same for each unit in the neighborhood.

GlenL (Ohio)
Posts: 5,491

Posted:

Marilee, somewhere in your documents the formula for setting assessments should be spelled out. This is what ours call for so you can see what the language looks like:

Section 5.1. Obligations of Owners to Pay Assessments. It shall be the duty of every unit owner to pay his proportionate share of the expenses of administration, maintenance and repair of the Common Areas and Facilities and of the other expenses provided for herein. Such proportionate share shall be in the same ratio as his percentage of ownership in the Common Areas and Facilities as set forth in the Declaration. Payment thereof shall be in such amounts and at such times as may be determined by the Board of Trustees of the Association, as hereinafter provided.

Studies show that 5 out of 4 people have problems with fractions

RobertR1 (South Carolina)
Posts: 5,164

Posted:

In SC the condo law reads much like Glen posted. However it also goes on the include these apportioned figures can only be changed with 100% vote, which means never. These apprtionments were sent by developer and sqauare footage is onlt one consideration. When forst built and the prices were announced and published, that was the reference point to calculate apportionments. Off course the price reflects value of the individual units and many times this price can be impacted by the location (view) or maybe end unit, a design feature inside the house or attached to the house (unit), floor unit is located on, closer to a large common area (lake), all kinds of arbitrary items also that could be true now or not.

Therefore I would sure check your minutes and amendments to the Covenants that you say the board made.

Our documents do not spell out how these apportionment were made, but the variation in all of the above makes it clear, other items than square feet were considered. In fact the selling price of the units after 27 years still reflect the reasoning for the different apportionment, but I suppose that could be contested after all this time.

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