T.B. from Dade County, Florida writes:
Dear Mister Condo,
Our condo just got hit by the Board with a $1.7M Special Assessment (approximately $10K per unit) to resurface the parking floors. The Board didn’t provide any engineering report or any kind of official inspection to justify this, except “visual inspection by the property manager”, so we are worried that they are addressing cosmetic repairs through a special assessment. In addition to that they don’t have enough reserves so they are going to request a bank loan, that will add another 10% to the costs. Unfortunately, our condo bylaws do not restrict the board powers to approve an assessment so it seems that if they decide something requires it, there is nothing we can do. So, my question is: is there any condition required to prove that a repair has to be done immediately via a special assessment? Can we stop it and request for a proper inspection report? We are not against paying it if it is needed, we are just against the way it is being done.
Mister Condo replies:
T.B., the short answer is “no”. The Board was democratically elected by all unit owners to conduct the business of the association. That includes using their best judgment to make decisions. If they feel the parking surface needs repair for whatever reason, they can take the necessary action to make it so. In this case, they are relying on a visual inspection from the association manager. You can certainly request the Board consider additional factors and ask about an engineering opinion but that doesn’t change the Board’s fundamental right to address the repair and levy a Special Assessment. This is exactly what you elected these folks to do. If you are not happy with their performance, you have the opportunity to vote them out of office at your next election cycle. If you think there is enough disgruntled unit owners to call for a recall of these folks, you need to follow the proper procedure for holding a recall election. Other than that, the Special Assessment will happen and the repairs will be made. All the best!
1.7mm would be a very large parking lot and I’m guessing they are doing an overlay. Rather than start a fight, do your research to determine if this project can wait any longer, and are there alternatives such as patching and sealing that could get you a few more years of use. Governing documents typically have provisions for calling a special meeting. You might want to try and call for a special meeting for the purpose of discussing this project. If the parking lot isn’t crumbling I would believe the project could be delayed.
The reserve fund topic is more and more interesting to me. On the one hand communities don’t want to pay more monthly out of their fee, but on the other hand big expenses happen like parking lots. This I why more and more HOA communities are looking at creative ways to raise reserve funds, one way to do it is to charge guests and visitors to the area to use your parking. Live near the beach? Charge someone to park in your lot. Have an owner that has a lot of guests? Charge the guest after giving them a certain number of hours free. If your interested in learning more check I would love to help explore options with you. We are a sponsor of Ask Mister Condo, parkingboss.com is the solution we offer.
I would first start by reviewing previous reserve report and/or any other possible relevant studies and determine why there is no funding available for the future construction project that should have been reasonable funded. Common elements such as elevators and boilers can seldom prematurely age and catastrophically impact residents; however, parking (garage/lot?) generally take years and years to deteriorate, with degradation being significantly reduced with proper maintenance. I wouldn’t point fingers at any individual or group, but would first research the history as floors are not a concealed component and are not likely to cause a special assessment if management and finances are being properly administered. I don’t know Florida law, but disagree with the answer provided by Mister Condo because in my HOA our governing documents will allow the majority of residents to overrule any special assessment, very similar to what Barry stated (he offered good advice). Review your documents as not every resident has 10K sitting around for a project that is potentially unnecessary for 3-5 years or that the BOD could seek a loan and raise dues to lessen any immediate financial burden.
FYI…. I have been involved with serious deteriorated concealed component projects where portions or new(er) wood framed buildings could not be occupied due to systemic deterioration (rot). Issues developed outside primarily due to flashing issues and readily migrated inward, which resulted in structural support failure, mold, leakage, etc. A 7K special assessment was required just to start the evaluation/design build aspect of work, which on one property water intrusion started 7 years earlier when the first building was constructed and exacerbated throughout various phases of yearly construction to encompass all buildings. Trying to determine the extent of issues externally/internally was expensive, but the major expense was construction and impact on the residents/tenants, which many were displaced to hotels. In these types of instances, the BOD cannot prepare financially; however, in my opinion, they (or previous boards) should have sought evaluation/resolution after the buildings were initially constructed, as leakage was known and well documented, and not after the Developer and GC both went bankrupt. Attending an Annual Meeting was not pleasant for any party. I feel for the folks buying into a poorly constructed complex, thinking it is stellar, then getting stuck with 20K in special assessments, while some folks needed to sell their units.