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Hello,
I live in Long Beach, NY. My home was affected by Hurricane Sandy, and getting it back up and running but a big dent in our savings. Our HOA decided it wants to extend our decks and make some other cosmetic improvements. They asked each homeowner to pay $30,000 ( we are 14 units, and 7 are family related). They notified us in October, and the payments are for $10,000 each from Jan. thru March. We cannot afford this, and have asked them to work with us on a payment plan. The work is not due to start till May. Its a seven month project. The Board's President's husband was the winning contractor. None of the other homeowners, except two others, think this stinks to high heaven.
I cannot believe that there is not one government agency that can help me. I have contacted all of the politicians in Nassau County, plus the Attorney General . Would you know of anyone I can contact that can help? I have spoken to two lawyers who pretty much told me that I am screwed because the By-Laws state that the HOA can ask for any sum of money it wants. How is this possible, and what can stop them from hitting us with another $30K assessment next year. There are already rumblings of a new roof needed. Can an HOA cause financial hardship? Any guidance would be greatly appreciated. I have been fighting this for a year, with another homeowner. One of our neighbors sold her unit below market value to get out. I feel like I am fighting a losing battle.
That really stinks. Of course, I think HOAs stink in general--but one where half is controlled by one family would seem unbearable. Does the HOA not have conflict-of-interest policies in place? I'd probably get with like-minded owners and try contacting the media. A little embarrassing publicity might be in order.
Wow conflict of interest to say the least. Was the additional project pit to a vote? What is the reason for the additional work? It's not structural or code requirement? I would simply write a letter of complaint. And if that doesn't work you can sue the HOA. I would demand to see the other bids that were taken. And every HOA is governed by a state agency. Sounds to me like a few people got snug as a bug on the board and are doing as they please. Family members of HOA board members shouldn't be allowed to bid. In my HOA the company I work for is not allowed to do any bidding. Nobody who is on the board is allowed to. Read your CCR and see if there is any conflict of interest section. If there isn't then one should be written in. I would fight this
Has the association had an independent Reserve Study done to determine the condition of common elements and projected time and cost of replacement, then compared it to current reserves? It seems a tad irresponsible to embark on a discretionary project of this magnitude without knowing the adequacy of reserves to handle what has to be done.
Were the decks damaged by the hurricane? Did the association's insurance cover any losses of damage to common areas?
If your association is a condominium, the NY state Condo Act applies. As these law go, it is very weak compared to come other states in that it seems to consistently defer to the association's governing documents.
11 out of 14 owners favor the discretionary expansion? Do I have this right? Sounds like the board is acting on the wishes of a majority.
Given 3 owners oppose it, how does that impact the plan to proceed? The association can obtain a loan using the association's future income as collateral for those owners who prefer to have a payment plan. That's how most associations handle major unplanned Special Assessments because it's rare that all owners can afford a lump sum payment.
Despite the internet noise to the contrary, it's highly unusual for an HOA to foreclose on a unit for failure to pay an assessment. If and when foreclosed, the association becomes responsible for the first mortgage. Given the softness in some markets, the association could end up owing more than the property is worth, especially after expenses, unless there is substantial equity in it. It's a costly and time consuming process for all parties.
Lastly, consider adopting a different mind set. There is no them vs. me/us. You are all owners. Attend board meetings. Volunteer your time. Run for office. And push for the HOA to take out a loan for those owners who cannot afford or prefer not to make a lump sum payment. You might be surprised to hear a sigh of relief from other owners.
If you can prove the extra money is just wasteful spending and there is OBVIOUSLY a conflict of interest maybe they will back down. The work being done is just superfluous? Is there a insurance settlement? Remember when a HOA is being sued it's disclosed if anyone is trying to sell or take a loan of any kind.
I would seriously look at running for the board and have a bylaw written where no member or homeowner can have any financial gain from HOA projects.
We cannot afford this, and have asked them to work with us on a payment plan.
Unfortunately the HOA does not have to offer a payment plan. They are not a bank. If the HOA chooses not to get a bank loan to pay for this, and then use dues to make payments, its really up to you to figure out how to pay for it. Bank loan, cash out $30k of retirement, savings, etc.
Thank you for all of your comments. I did ask to see all bids, and the winning contractor, ( the President's husband), came in $200K less than the other two contractors. But, the bid is not detailed, so you cannot compare it apples to apples. I asked to see the engineer's report regarding the beams, and of course, not a surprise, there isn't one. We are trying to come up with the money, but after Hurricane Sandy, we are still in the red. Since most of the homeowners are related, their units were purchased 20 years ago, at a reduce rate. Plus, the President's brother was the developer, and a lot of these issues have been there since day one. Anyone who is thinking of buying a condo, please check the minutes from prior year's meetings, and the bank accounts.
I will look into NY Code Article 9. We sent the Board an e-mail asking them to please work with us regarding a payment plan since the permits have not been filed, and the time frame to complete this job is 6 to 7 months. The response we got was a lien filed against our unit, so we are meeting with lawyers. Either way, this will be a very expensive lesson. Buyer-Be-Ware.
I have contacted Channel 11, Newsday, and some other local papers. I think we are too small of an issue.
Powers of an HOA need to be revaluated in this state, and this country.
Thank you again. I will keep everyone posted. My fear is that after Hurricane Sandy, this contractor found an easy way to make a lot of money, and I that we will be hit with another assessment next year for a new roof, ( there is talk that it will be $14,000/unit).
One of the issues / problems with condos that have fewer units (less than 40-50) is that expenses must be shared between fewer people, plus reserves for special projects are often insufficient. When there is significant damage or improvements, assessments are invariably involved. By the same token, most assessments must be approved by a majority of the owners in an HOA ... which, in your case, might not be as difficult if half of the owners are related.
As unfair as it may seem or sound to three of you, I suspect that the Board has complied with existing by-laws and HOA guidelines. You may also discover that what you are actually paying is the condo insurance deductible. In Florida, for example, the deductible for hurricane damage is 2-3-percent of the total value of the building, which effectively leaves many condos 'self-insured.'
It seems odd that the HOA sent you a 'notice of lien', unless you are already delinquent on your HOA dues(?). Still, an HOA lien is extremely difficult to enforce, particularly if you are making some effort to pay your dues and assessments. Ultimately, they must 'attach' and 'foreclose' on your property.
It might be wise to submit a repayment schedule that you believe you can afford to your HOA Board with a copy to the State Condo Association ... and another to your attorney. You might also mention therein that the project seems to be both a hurricane restoration AND an improvement, PLUS express your concern about a possible conflict of interest in the award.
Thank you so much jghorton. I will definitely do this ASAP.
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