Special Assesments

Carol,

If you have a high % of foreclosures in your community, it may be impossible to collect the delinquencies from those members who have also gone into foreclosure. It's a good action to build a "bad debt" line item into the budget to account for these uncollectible delinquencies. Of course all the other members, technically, are paying for this, but it's something that just cannot be prevented. If these delinquencies are causing a shortfall in the operating fund, a special assessment may be the best plan of action (although it will not have a long term affect as a raise in assessments would). If the required % of members vote for the special assessment, legally every member is bound to pay it. However, the members have a right to vote "no" to the special assessment. What other alternative does the board have? What are the non-essential things you think the board should not be spending money on?

Mary, I'm not sure about in Arizona, but in Florida the members have no say, or vote, as to whether there will be a special assessment or not. It is only the board members who decide. I'm unsure what the laws are in Georgia, either.

Carol,

I don't know that either action means the BOD is mismanaging the funds of the assn. The members should always have the ability to recall the board members -- either 1 or 2 or all of them. Review your bylaws, it should state in there the procedure. However, I would caution you to make certain the board is really doing something wrong b/4 you mount a recall campaign. Oftentimes it's only "perceived" that something is being done wrong, when in fact everything is fine. As I mentioned, I see no red flags regarding the 2 issues you mention. Frankly, I'm wondering if perhaps you are just trying too hard to second-guess the actions of the BOD. There might be a lack of communication between the BOD and the members which oftentimes will cause speculation, etc. Don't be afraid to ask questions about these actions that you think are wasteful. Just don't be too quick to start yelling "recall"!

To all,
I caution strongly if a special assessment is going to be used to do anything.............anything at all, insure there is a strong clause that limits the duration of the special assessment or better yet put a cost limit on the assessment. We have had to pay a special assessment for close to ten years. I have not been able to change the mind-set of the Board, and the owners don't seem to care. Each year the special assessment carries over by a owners vote on the budget. The Board feels they have a default clause that allows them to just continue the special assessments under some kind of Board prerogative that amounts to they can do what they want if they deem it necessary. Long battle about this and and it will probably continue with a new board. Of course it should be dues increases if the money is required and I expect it is. Now they are going to add another special assessment by tacking on more to the original special assessment and have proposed to put a time limit on it. The board just feels they have the authority to get operating funds this way and explain what does it matter how you get the funds if they are needed. They say they can change the procedure but the funds are needed. Our owners can vote the budget up or down, but I think the Board feels they can over ride if needed. On the positive side the new board, I believe, will look at this issue and make some adjustments.

I can find nothing that sets time frames for special assessments in our documents, our lawyer doesn't tell them not to do it this way, so I just caution, make sure you know exactly what you are doing, and check state laws. Virginia has some different state law requirements than run of the mill and so does Georgia, I would check them double.

There is a clause in our documents that can be read as the Board has final authority on everything if they can make a case, and of course they also would be the panel that says yea or naye.