Ups and Downs Of Special Assessments for Condo Garage Doors

mc_money

P.H. from Fairfield County writes:

Dear Mister Condo,

I have a question regarding special assessments and when they can, or should, be levied. The Executive Board of my association is preparing the budget for our next fiscal year. As part of the discussions that I have heard, they are considering approving a special assessment for new garage doors for each unit. Their reasoning behind a special assessment is that they do not want to include it in the annual budget since they expect that it would cause the common charge to increase to a point where the membership would vote down the budget. Now, the Association reserves have adequate funds that could cover the replacement of the garage doors. Since there are funds available, can the Board still choose to levy a special assessment?

Mister Condo replies:

P.H., just like garage doors, there are ups and downs for special assessments versus drawing down the association’s reserves. The bigger question to me is why any assessment is needed at all if the garage doors were part of the Reserve Fund plan from years ago. According to your information, the Reserve Fund was funded for their replacement so why not just draw the money from there? My guess is that your Reserve Fund is not as well-funded as you may think it is and that the Board is trying to keep a certain percentage of money in the Reserve Fund which may be necessary for FHA mortgage compliance or just good fiscal shepherding of the association’s resources. Whatever their reasoning, the Board is well within their rights to purchase the garage doors for the units and they are well within their rights to decide how to fund the purchase. I don’t like special assessments but there are times when they are needed. The good news is that you and your neighbors will have some shiny, new garage doors to enjoy for years to come. All of you will benefit from the increased curb appeal and enjoyment of new garage doors, even if you are stinging a bit from having to pay for them. Good luck!

2 thoughts on “Ups and Downs Of Special Assessments for Condo Garage Doors

Leave a Reply

Your email address will not be published. Required fields are marked *