M.L. from Aransas County, Texas writes:
Dear Mister Condo,
Our 100-unit condo complex has been “under construction” since 08/2017 after Hurricane Harvey. Shockingly, there are less than 25% of the units to punch list. We still have many buildings at studs. Our master policy has paid almost $15 million and, from what I understand, the funds were received by the HOA, then paid to the contractors — according to the general ledgers, the monies were received and “declassified” and paid to the contractor and other project managers/liaisons. We have just received an email informing all owners that the Board has unanimously approved a $14,000 assessment, to be paid out over 6 months — we can receive a 10% discount if paid in full ASAP. Part of this assessment is to pay the current contractor almost $500,000 that was withheld because of monies paid prior to the storm for fire damage in a building — completely separate — at least, that’s what we were told. I’m curious what my rights are as relates to seeing documents related to my condo. I’d like to see the bills from the contractor that were paid on my unit. Another owner said she was accidentally forwarded an email that showed the contractor billed the HOA $20,000 to sheetrock her 1000sf condo. I just don’t know where to start, but we have over $600,000 worth of property invested in these condos and they are a source of income for us — I need some direction.
Mister Condo replies:
M.L., at best, new construction is a tricky and perilously fragile time in a new condominium’s life cycle. The developer still has full control and unit owners, such as yourself, have very few rights and almost no leverage. I hate to say it but you will most certainly need an attorney (at additional expense) to guide you through this journey or you will be at the hands of the developer until the turnover, which could be many years from now. There are many enticements to purchase a newly developed condominium unit or units. Dealing with the legal wrangling between developer and association is not one of them. My best advice for new associations is to hire and attorney and an accountant to help guide them through the process. At the end of the day, it is an additional expense that may well pay for itself many times over today and in the years to come. Good luck!