his is the story of a little condominium association that could. Armed with an arsenal of experienced professionals and some dedicated board members, this association surpassed management’s expectations and did the almost impossible. Overcoming the odds, this little condo building deftly maneuvered itself through an emergency project and related financing, and lived to tell the tale.
T
It was a sunny, blue-sky late spring day; the kind of day that promises a beautiful summer just around the corner. Yet not even the weather could brighten our spirits by the middle of the board meeting when we came to the startling conclusion that this little condo building was in trouble. No, not “trouble,”… TROUBLE!
We learned that the “small problem” a unit owner had was not just a little problem, but something caused by serious structural issues in the building itself. A simple handyman couldn’t fix this problem. We had to involve a vendor with specialized equipment to repair the structure issues… Oh, and did we mention that there were only one or two vendors in the tri-state area that had this kind of equipment? That meant that the price tag wouldn’t be cheap.
Speaking of price tags, it didn’t take Good Will Hunting to do the math to see that there was no way the association could afford this project with what was in their operating funds or their ever-dwindling reserve funds. When most residential associations would take that knowledge to the bank to obtain a loan, this association could not. The building had less than 13 units and, thanks to the lending regulations that went into effect the last few years, no bank would lend them money.
That left the last line of defense: the unit owners. That meant the dreaded “s” word: special assessment. Da-daa-DUUUHHH! Of course the board members weren’t happy. They knew that once they heard, the rest of the owners wouldn’t be happy either.
What to do? It was time to face the music and obtain that most precious of commodities: information. The board scheduled an open meeting to inform the owners and mailed out notices. The board engaged an engineer to assess the project and draw up specifications on the work that needed to be done. They directed management to contact the expert vendors with their “luxury” equipment and obtain bids and arrange a payment plan… Payment plan? What payment plan? The vendor didn’t offer financing arrangements, which meant this little association had just a couple months to make all payments to avoid late payments and liens.
That meant even more bad news for the unit owners… all less-than-13 of them. Once the board had all of the facts from the team of professionals, they were prepared for
the open meeting to present the facts to the owners. They handled it openly and honestly, providing membership with the details of the situation and the conundrums they encountered with financing. Almost on cue, the members weren’t pleased. Many voiced concerns about being able to afford the steep price tag. But as management advised, the association really did not have much of a choice in the matter. The structural issue was basically an emergency, and could have seriously detrimental side effects if left unrepaired and worsened. Think, half-of-the-building- falling-apart kind of side effects!
The meeting continued and in order to accommodate the vendor’s payment demands and get the project completed before the weather got too cold, the owners were informed that they had to pay the entire special assessment in less than four months from the date of the meeting. As the price tag of each owner’s portion of the special assessment approximated the purchase price of a car, this meant that many of the owners may have to obtain financing on their own in order to pay the special assessment in time. The concern of board members – which went unspoken but was acknowledged mentally by all board members – was, what if one owner didn’t pay the special assessment? Sadly, they all realized that even if one unit owner didn’t pay, the association wouldn’t be able to afford to cover the default on its own.
The board, vendors and management continued to answer all questions the unit owners had, and tried to make the special assessment payment process as easy and lenient as possible. The meeting continued in a business-like fashion, as the board was armed with as much information as possible, which they communicated to their worried constituents as best they could. As one board member candidly put it, “I’m not happy about this either. I have to pay the same special assessment that you all do… I’m not exempt from it just because I contributed to the decision-making
process.”
Fortunately for the little association that could, providence reigned in this case. Every unit owner came up with the money. By the time that the last payment was due to the vendor, the entire special assessment was paid in full.
No one likes tragedies or situations that seem dire. But as the little association that could demonstrated, the keys to surviving a difficult association situation are to engage experts, obtain as much information as possible, communicate openly and honestly with ownership, and show the members that you are on their side and you will do all in your power to make the situation as easy as possible. The moral of the story is, if you think you can do it, you probably can!
|
Overcoming the odds, this little condo building deftly maneuvered itself through an emergency project and related financing, and lived to tell the tale.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60