Understanding Special Assessments

There’s no way to sugar-coat it: everyone hates special assessments. Getting a notice that you owe more money to the association can not only put a damper on your day but also a dent in your wallet, both of which the board is sympathetic to. In a perfect world, there would never be a need for special assessments—or any other type of assessments for that matter—but sadly, they’re sometimes a necessary evil.

Often times, special assessments are levied when the association needs to make essential repairs, improvements or additions to the common elements, but lacks extra reserve funds to cover the costs. While the board puts in its best effort to keep a healthy reserve fund and to budget in advance for these types of projects, occasionally unforeseen expenses occur. When this happens, we have to call upon our residents to pitch in financially so that our association can remain solvent. Unfortunately special assessments aren’t optional fees, and residents are responsible for paying special assessments in the same way they’re responsible for general association assessments. Just remember, though, that these fees are funding projects that will benefit all residents, and your special assessment fees are your contribution toward that.

Of course, the board doesn’t take levying special assessments lightly. Not only do we understand that special assessments can be a hardship for you, but—since we would also be responsible for paying our share of any new special assessment—they’re an extra financial burden on resident board members as well. Because of this, we try and make levying special assessments a last resort, and, if passed, offer payment plans when possible. There are also regulations set forth in our bylaws that we must follow before levying a special assessment, and in some instances we require residents to vote on the proposed project before we can adopt the special assessment for it. Make sure your opinions on these matters are heard by attending open board meetings and voting on these critical projects.      

While none of this changes the fact that having to pay special assessments fees is about as fun as a root canal, just remember that it’s all part of the greater good for the association. They’re investments to your home and your community, and can help keep our association a wonderful place to live for years to come.

The Value of Our Association Attorney

Like our manager, our community’s legal counsel is one of the most important people, other than volunteers and residents, involved in our association. Not a volunteer, but a paid—and integral—member of our association’s professional team, our attorney is intimately familiar with what is happening in our community. And because community association law is complex and ever changing, our association’s attorney is knowledgeable in a wide variety of practice areas that can affect our association, including:

 

•           Premise liability

•           Construction warranty

•           Directors’ liability

•           Real estate

•           Contracts

•           Architectural and design review

•           Insurance

•           Employment

•           Taxation

•           Environmental law

•           Water regulation

•           Collections and foreclosure

Our attorney doesn’t represent the board, individual board members, individual homeowners, any group of homeowners or the manager; he or she represents only our association. One person on the board has been designated as the contact with our legal counsel.

In addition to acting on our association’s behalf in legal matters, our attorney also advises the board on its responsibilities and obligations. And as board terms expire, our attorney acts as the de facto association historian as well, so that our board can provide continuity in policy-making and operations.

Over Your Head

When it’s time to maintain, repair or replace the roof on your home, it’s a good idea to get to know the wide variety of roofing materials that are available and what each has to offer.

Asphalt shingles, wood shakes, clay and concrete tile, metal and slate are roofing materials that are best suited for sloped or pitched roofs. Each has a distinctive appearance and come in a variety of colors. Because of its added weight, tile and slate may require you to strengthen the frame of your home to support the roof. Metal roofs can be noisy and also absorb heat, which means you may need to add extra insulation beneath them. Rubber sheeting (ethylene propylene diene monomer, or EPDM), tar, PVC membrane and built-up roofs—including tar, bitumen and rolled materials—are most appropriate for flat roofs.

Green roofs, which are made from a layer of vegetation over a water-proof membrane, are also best suited for flat roofs. They provide insulation, contribute to lower air temperatures and counteract the heat island effect (or the ambient temperature, depending on where you live). The eco-friendly benefits of green roofs are particularly noticeable in urban areas. 

Foam roofs are light weight, cost effective and adaptable to all kinds of roofing shapes. They can last up to 50 years when properly maintained.

When selecting a roofing material, consider the pitch or slope of the roof, the strength of your home’s frame, typical weather conditions and the budget in addition to appearance. The durability and life span of a roof can also depend on the quality or grade of the material used, as well as the workmanship of the installation and regular maintenance.  

Keep the Home Fires (Safely) Burning

One of winter’s great pleasures is relaxing in front of a warm, cozy fire. For most months of the year, however, the fireplace stands idle, and these long periods of disuse can lead to hazardous conditions when you light your first fire of the season.

Your fireplace needs regular care and cleaning to assure a safe and roaring fire. Creosote, a flammable, tar-like substance that accumulates in the firebox, chimney and flue, should be removed by a professional once a year, eliminating the worry of a potential fire hazard. Your chimney should also be inspected annually to ensure there are no structural problems.

Clean your fireplace and its accessories regularly to prevent the accumulation of soot, ashes and creosote tars. The following guidelines will help you keep your fireplace in good working order throughout the wood-burning season:

·         Vacuum or sweep the hearth weekly to prevent dust and soot buildup. Do not sweep or vacuum until all embers have been extinguished for at least 12 hours. 

·         Burn only well-dried, seasoned wood to minimize dangerous creosote buildup and reduce the risk of toxic fumes and excessive smoke. 

·         Don’t use water to drown a fire except in case of an emergency. Water will make a paste of the ashes, which is difficult to remove. 

·         Don’t use an abrasive cleanser inside the fireplace; many such cleaners leave a flammable residue. Instead use a stiff-bristled brush to gently scrub the walls of the firebox. 

·         When cleaning your fireplace, sprinkle damp coffee grounds over the cooled ashes to keep down the dust.

For more tips on fireplace care and maintenance, as well as kerosene heaters, wood-burning stoves and furnaces, download the U.S. Fire Administration brochure, Winter Fires: Safety Tips for the Home, at www.usfa.fema.gov/downloads/pdf/publications/fa-249-508.pdf

When Foreclosure Is the Final Option

Countless Americans face foreclosure when their lending institutions are unable to collect mortgage payments. In an ideal world, no one would ever face foreclosure—for any reason. But that world does not exist. Banks and other lenders foreclose on homes when owners default on their loans. Although relatively rare, association-initiated foreclosures are occasionally required to recover delinquent assessments.

It’s important to remember that homeowners choose where to live, and by choosing to live in a community like ours, they accept a legal responsibility to abide by established policies and meet their financial obligations to the association and their neighbors.

Association budgets

Associations rely largely—many exclusively—on homeowner assessments to pay their bills, which can include landscaping, garbage pickup, pools, street lighting and insurance. For condominiums and cooperatives, these costs include building maintenance, utilities and amenities enjoyed by all residents.

You trust our board to develop realistic annual budgets. We base our assumptions on careful cost projections and anticipated income primarily from assessments. Our budgetary obligations do not change when some owners don’t pay their fair share. Common grounds still must be maintained. Garbage must be collected. Utilities and insurance premiums must be paid.

When homeowners are delinquent, their neighbors must make up the difference or services and amenities must be curtailed. The former is an issue of fairness; the latter can lessen the appeal of the community and erode property values.

Liens and foreclosures

When an owner fails to respond to repeated attempts to collect the debt, the association can be left with little choice but to place a lien on the property. The magnitude of this decision requires an approach that is fair, reasonable and consistent and that complies with applicable laws, practices and procedures set forth in the governing documents that guide our decision-making.

We believe homeowners facing foreclosure deserve a reasonable opportunity to appeal to the leaders of the association. Knowing that people occasionally face financial hardship—a lost job, for instance—we will try to work with homeowners to bring their accounts up to date.

Nobody wants to foreclose on a home—not a mortgage banker and certainly not our association.  However, the threat of foreclosure is often the only tangible leverage an association has to ensure fairness and shared responsibility. Without this option, many residents would simply choose to default on their obligation to their association and neighbors.  How many Americans would pay their taxes if government had no means of enforcement?

With each additional delinquency, an association’s financial position can become increasingly precarious, a situation that is exacerbated in a depressed housing and economic climate.

Placing a lien on property, with the ability to foreclose, is typically enough to get delinquent residents to meet their financial obligations to the community—without removing the owner from his or her home. When that fails, associations turn to the final—and unfortunate—option of foreclosure. 

We want you to know that we understand the magnitude of this decision and why it may occasionally be necessary.