Refusal to pay special assessment

I am on the Board of Directors of an 18 unit ocean side vacation condo. The Board has imposed a $2400 special assessment to cover the cost of replacing the wooden balcony railings with vinyl. All owners were properly notified after the matter had been discussed and voted upon during three association meetings. The majority of the owners approved the proposal but three owners have refused to comply with the assessment.We are not anxious to take the case to court because of the time and expense that would cost the association. Would appreciate any suggestions in how best to resolve the matter.

Charles.
Michele has a valid question.

Remember, you all that paid your assessment and decreed the assessment under your covenamts are not the law breakers around there. Send them a registered letter with the fees due, explanation of why the fees are valid, and set a time line for their compliance. Check your documents for procedures and penalties and interest you can levy. At the end of your time line, state simply at that time they will have alien placed on their property. Your documents should provide for this. If not, you will have to create some legal power for the Regime to enforce the covenants. I suspect strongly, you will find thios in your Maryland State Statutes about HOA's. Also, at top of this page on right is a search feature, plug in Maryland and see what come up, I am sure you will find addresses there, if not give the State Legislation a call. Be prepared to take this to the wall, because if you don't you are in deep dodo.

Charles,

I would like to think the board is aware that a delinquent special assessment should be treated the same as a delinquest regular assessment. Why does the board do to collect regular delinquencies? Do these members know they have the same obligation to pay a special assessment as they have to pay a regular assessment. I'm not advocating foreclosure, but late fees would be a proper first step to collect. My suggestion would be to follow the collection policy for delinquencies.

One other thing to consider is that at this point in time many h/o's are in financial difficulties. If the special assessment is to be paid in one lump sum this may be the crux of the problem. Perhaps a payment plan can be set up for these h/o's IF their problem is lack of funds.

A question George,

When you reference some associations as a condo rental and proclaim this payment plan and all this financial adjustments that should be made because it is a "Rental condo", what consideration do you make for the owners that are full time residents. I am sure there are "Full time 100% rental condos" out there. How did you get the impression this is what we are dealing with. I would remind you that these rental units you are referring to are simply residential units that allow property to be rented, and that is certainly doubtful in a lot of cases because of how the documents are written. My condo is chartered as a p[rivate residential complex by declaration. The CC&R's allow for a rental policy.

"Be prepared to take this to the wall, because if you don't you are in deep dodo."

To me, that is a much different approach than what I advocate. I do not advocate taking this situation to the wall (which I read as foreclosure--the ultimate outcome), or even preparing to do so.

Think about it: the cost of an attorney to file suit against the owner and the related court costs is greater than the amount involved. And if the owner lives out of state, it is unlikely that h/she can be served for a suit in small claims court. And even if the plaintiff prevailed in a suit, there is no guarantee of payment. Such action may force the owner into bankruptcy.

So the association is no better off, and maybe worse off.

Both excellent suggestions, Mary.

This is a very interesting discussion. I'd like to hear back from OP though.

As stated, the policy for collecting these assessments should be the same as for any other assessments.

It is not up to the board to determine if the owners have financial problems or any other issue regarding non-payment of the assessment. It is the owners who need to make their case for delay, postponement, or a payment program, to the board.

Any board can make an exception to any rule at any time. There just has to be a legitimate reason, a majority of the board must agree to it, and it needs to be documented as an exception to the rules, along with the reasons for the exception. Often a time limit is placed on the exception. Too many boards use the "No exception" standard for things that get them into trouble, i.e. handicap issues. Fairness and reasonableness are what the board needs to use in their decisions regarding exceptions.

The vast majority of professional reserve studies consist of a visual inspection - basically a walk-thru. So this could have been missed, or not estimated correctly. We don't know the reason for changing the railings but this sounds like an upgrade, so the assessment many be for the difference between planned maintenance (reserves) and upgrading the component.

Follow your collection policy and make sure the procedures for approving the special assessment were done according to your documents and state law.

Joe

I would like to comment on this if I may. First this sound like an incident that took place with our association. We had started off with a $400 a year in 2006, then in 2008 it went to an extra $200 which total $600, then in October of that same year a special assessment of $370 was added,mind you that this had to be paid in November and December.At the beginning of December the new proposed budget for 2009 is $865 for s/f homeowners and $965 for townhomes. Now these increases are because people hadn't pay for their dues for two years and they stated that they had to increase, also because of not having enough money to go after those whom didn't pay. It was a total of 55 people and only 17 was taking to court before the funds ran out. We have a total of 201 s/f homes and townhomes, with the supposed of being 300. But that stop because again not having enough funding to continue to build. Now our complaint has homeowners, Why should we be responsible of payng the $370 when we were up to date with our Dues! Those who haven't payed , received the same service has those who did.(Lawn, Pool, Tennis, Trash)Now my question has HOA'S, Would or do you think that this is FAIR? We did solve one problem, We has the community was able to take over this year, and vote out the orginal Board Members who was BOWENS! and we have pick new Board Member's and we also have a management company. Please any suggestion on how to start this year off? And remember the $370 is still following us along with the debt that was left from the other Board Members(BOWENS)If their is anyone that have experience of being Board Members, please can you help us the new members with suggestions. Thank-You! Tiwanna Atlanta GA.

Tiwanna,
Micheles advise makes sense.

Let me just sort of jog your memory. From reading your post it is evident that you suspect a lot of your problems, at least in part, has been with the Board, and at the end you ask for responses from members of this site that are/were Board members. You will get answers to your questions and most of these answers will be posted by some very astute folks who may happen to fit your criteria. IMHO, they are the cream of the crop and this site was established with the intent of providing authoritative information by BOD members and folks that have specific information to contribute.

What are BOWENS?

Not sure if this thread is ended, but in reading the original posting I guess I would have some questions.

It appears the BOD approved this "special assessment". As this an emergency situation?

Our governing docs and the law is clear, that the BOD can only approve a special assessment in an emergency situation. All other special assessments must be presented and approved by the community. If there docs or law is similar, since the community did not approve the special assessment may be way the person is refusing to pay.

Thanks Michele, It does sound like it was approved by the community.

From a recent experience in our community, the prior BOD had spent $20K on a new item which they claimed were discussed as various meetings (and yes a comment was made) but no vote was ever taken. The issue has caused some problems because the prior board is claiming these new items are for maintenance purposes but they never existed before and it adds and additiona $5K to the annual operating budget. But that's a different subject