F.H. from Miami-Dade County, Florida writes:
Dear Mister Condo,
Several years ago, when my husband was Treasurer of our high-rise condo Board and another man was President, both men announced that they were leaving the Board and both, separately, wrote a letter to the Association members stating why. The remaining five Board members had refused to raise our monthly fees, much needed for repairs of the building. Exposing problems to all of the homeowners can sometimes push Board members to take better action. Also, there are legal obligations Board members have to the HOA and the Association’s legal counsel can be of assistance under these circumstances.
Mister Condo replies:
F.H., it sounds like your husband and the other Board member were doing their best to bring the underlying financial concerns of the association to all of the members outside of the Board. All Boards are under obligation to look out for the best interests of the association. However, funding for the future and building a healthy Reserve Fund can be incredibly unpopular as it almost always leads to increased common fees. Since Board members are largely elected based on popularity, they feel that keeping fees low is a good platform to run on. Guess what? It works! That’s why they do it. But, as you have pointed out, it keeps the better minded folks from serving on the Board and it leads to the eventual financial ruin of an otherwise healthy association. There are associations with naturally low common fees. They have little in the way of amenities and they aren’t routinely ravaged by Mother Nature’s damaging forces. Most associations aren’t so lucky. They have amenities. They have common elements that wear quickly. They have sacrificed maintenance for the sake of keeping fees low. These associations end up either taking out an HOA loan, levying Special Assessments, or both when the time comes to pay the piper. Deferred maintenance is the commonly used term for not having enough money to make the required capital improvements. These associations then have to take drastic measures just to maintain their current status. Forward-thinking associations are well aware of the items on their Reserve Study and have a funding plan in place to make sure there is enough money on hand to handle the repairs and maintenance when they are likely to come due. It’s too bad your husband didn’t serve on the Board of an association like that. I am sure he would have approved and flourished. Thanks for sharing your story.