Fear and Loathing in the Community Association

There is a phrase in the lives of community associations guaranteed to make the blood run cold – Special Assessment.

Property managers and boards of directors fear it, and homeowners are usually angered by it. The most common initial reaction from those affected is to find someone to blame. It has to be the fault of management, who ignored maintenance, the board of directors who didn’t budget enough to cover routine repairs and replacements, or the consultant who recommended a needlessly expensive remediation program.

It’s not always that simple and even if it is, so what? The fact remains homeowners will have to pony up or get used to living with the leaks, rotted wood, potholed pavement or whatever conditions are involved. The second option is short-sighted and will only add to the problem, so the only real option is to develop a workable strategy and sell it to the owners.

The first step is to identify and quantify the problems and define appropriate remedies. These should be done by someone who wouldn’t financially benefit from the outcome. Qualified, trustworthy contractors could do a competent job, but could be viewed as having a vested interest and their findings could be dismissed by some for that reason. Independent consultants aren’t automatically more believable, but there’s certainly less potential for a conflict of interest.

The next (and arguably most critical) issue is effective communication. Once it’s been established that a major project is necessary, the ownership should be informed and a special meeting should be convened to present it to them. The individual(s) who investigated the problems and defined the repairs should present their findings and provide exhibits (photographs, drawings, etc.). There will be questions (often pointed) and accusations should be expected. Patience, tolerance, and understanding on the part of the targets are critical.

When possible, projects should be structured to minimize financial hardship. In some cases, projects could be phased over a number of years, allowing for assessments to be paid in installments over that period. If a project doesn’t lend itself to a phased approach, it could be advantageous to obtain a loan, which would also permit payment in installments.

Reserve studies by competent professionals will help prevent the need for special assessments, but if they aren’t done early and often, or if funding recommendations are ignored, the potential could be high. Even with conscientious inspections major problems (such as latent defects) can develop without visible symptoms many years after construction.