Special Assessment Surplus Not Returned to Unit Owners

J.P. from Boston writes:

Dear Mister Condo,

I am a unit owner and keep the books for a 12-unit, self-managed association in Boston, MA. At issue is disposition of a special assessment surplus. A vote was taken to “replace the roof”. Trustees then obtained bids, selected a contractor (no vote) and the special assessment amount was based on the possibility there would be a cost overrun of $10k (no vote). The trustees “said” any surplus would be refunded pro-rata. Now there IS a surplus and the trustees say they have changed their minds and are exercising their rights, as trustees, to use the surplus for other projects or save in reserve for future years. I and another unit owner are selling and want our pro-rata surplus share refunded. The master deed and bylaws are silent on a surplus situation, only on the right of trustees to impose special assessments for shortfalls. Help, the clock is ticking and this is worth $1,000 each my neighbor and I. Plus what feels like a violation of trustee rights.

Mister Condo replies:

J.P., I am sorry to have not been able to get to your question a bit sooner. I answer all questions on a “first come, first served” basis and I imagine you have already moved on from this unfortunate bit of business. Each state has their own laws about Special Assessments. I am neither an attorney nor an expert is Massachusetts Condo law so I can only offer you my friendly opinion. Special Assessments are a scourge upon condo and HOA living. They typically signify a lack of forethought about common element repair or replacement that should have been budgeted for years ago. Typically, they must be used for the specific intent of what they were levied for. In your case, the Assessment was used as planned but the surplus was not returned to unit owners, which is almost always the case. While the trustees had the best interest of the association in mind when they decided that the surplus should just be rolled over in to the association’s Reserve Fund, I am guessing they overstepped their rights and trampled upon yours in doing so. The question is what can you do about it? Since we are only talking about a thousand dollars, it may not be worth the time and investment of hiring an attorney to sue the association. You can certainly talk to an attorney who is verse in Massachusetts Condo law, but I am guessing they will tell you same thing that I am and that is you would likely have to spend more than a thousand dollars to try and recoup your thousand dollars. Whether to take on that battle is your choice but I think it might be a fool’s errand. Live and learn, my friend. You may have the moral high ground but they have your money. Let’s hope this doesn’t happen to you again. Good luck!

One thought on “Special Assessment Surplus Not Returned to Unit Owners

  1. Your best advice is to look in the minutes for documentation that covers these actions/ re-actions/ changes of heart.

    Any legal team will certainly expect to review the minutes to substantiate the facts.

    You can help your board by sending a letter indicating the lack of documentation/ votes/ discussions (your facts), and indicate that owners would appreciate receiving the refund, as originally promised.

    Maybe the board just needs a reminder (Mr Condo has kindly recommended this strategy in the past; this is just passing along his good advice.)

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