I did receive a response from an ROC member today. This was the content of the email:
Hello,
We were delighted to receive your thoughtful questions and concerns. Your letter, along with the many others that we've received, is proof of what we have believed for a long time--[BLMH]is brimming with residents who have strong and defined opinions, and given the opportunity, are willing to share them with the community at large. It's our hope that this election will create new and varied channels of communication through which anyone who wants to say something or see something changed feels comfortable bringing his or her proposal forward.
Interestingly, you are only the second person to ask about the rising assessements! We've been surprised that that topic is not first on everyone's mind, but it seems that the other issues surrounding the board have taken precedence.
Please be assured that our candidacy is not about raising or lowering assessments. Until we become part of the process that determines how assessments are levied we cannot know if they will rise, remain the same, or be lower. We will certainly scrutinize every dollar amount in every account number and see if there might be ways to economize without losing any services. And, we are in contact with the association boards of other complexes and will brainstorm with them on ways to maintain services without overburdening residents with ever-increasing assessments.
I've lived here for 22 years and I enjoy the beauty of BLMH every time I drive down its streets. And, _______ and ______ feel the same--it's one of the primary reasons they bought homes here. But, we should respect the residents of BLMH as much as we do its lovely grounds. And that is what our campaign is about--respect, courtesy, and allowing residents to voice their concerns and participate in their governance.
Our responses to your questions are noted on the attached pdf. An FAQ sheet and a survey are also attached. We hope that they provide you with some definite answers, but do call or write if you would like to know more.
Best regards,
Above: Intermittently, for a time, boards informed owners of association finances
Newsletter 2008 excerpt is an example of earlier board willingness to communicate with owners.
The boards of 2019-2021 prefer not to do so.
https://tinyurl.com/BLMH2021
Life and observations in a HOA in the Briarcliffe Subdivision of Wheaton Illinois
Best if viewed on a PC
"Briarcliffe Lakes Manor Homes" and "Briarcliffe Lakes Homeowners Association"
Updated Surplus Numbers
Updated Surplus Numbers: Actual surplus 2018 per audit was $85,163.
Boards 2011-2018 implemented policies and procedures with specific goals:
stabilize owner fees, achieve maintenance objectives and achieve annual budget surpluses.
Any surplus was retained by the association.
The board elected in fall 2018 decided to increase owner fees, even in view of a large potential surplus
Average fees prior to 2019
Average fees per owner prior to 2019:
RED indicates the consequences had boards continued the fee policies prior to 2010,
BLUE indicates actual fees. These moderated when better policies and financial controls were put in place by boards
Better budgeting could have resulted in lower fees
Better budgeting could have resulted in lower fees:
RED line = actual fees enacted by boards,
BLUE line = alternate, fees, ultimately lower with same association income lower had
boards used better financial controls and focused on long term fee stability
Monday, September 15, 2008
Saturday, September 13, 2008
Be Careful What You Wish For
Regarding the possibly new "activist" board, it reminds me of the stories my spouse's aunt has told us regarding her experiences.
She is a condominium unit owner. As she tells it, there have been expensive changes wrought at her condominium by a new board that was elected when some unit owner's were "dissatisfied". The result was higher assessments, and it turned out her new board had an agenda to make certain improvements that they felt were necessary, such as new windows on the units. My poor aunt was hit with a large assessment and she was convinced that new windows were not necessary. But that board has had it's way!
Now, we apparently have a group of owners who want to change the board but aren't telling us what they intend to ultimately achieve in doing so.
Look out BLMH! Here comes a new "activist" board that is all about "Change".
She is a condominium unit owner. As she tells it, there have been expensive changes wrought at her condominium by a new board that was elected when some unit owner's were "dissatisfied". The result was higher assessments, and it turned out her new board had an agenda to make certain improvements that they felt were necessary, such as new windows on the units. My poor aunt was hit with a large assessment and she was convinced that new windows were not necessary. But that board has had it's way!
Now, we apparently have a group of owners who want to change the board but aren't telling us what they intend to ultimately achieve in doing so.
Look out BLMH! Here comes a new "activist" board that is all about "Change".
Friday, September 12, 2008
An Open Letter to the ROC Candidates
I composed and sent this letter to the three board candidates on the "Residents of Change" slate. The original included the specific names of the candidates and my name. I have deleted these names for this blog. Otherwise this is the entire letter.
September 11, 2008
To: “ROC” board candidates and the “Residents of Change”
Dear Sirs and Madams:
Thank you for your letter, the enclosure and voting instructions. On reading them, I have questions and concerns. Since the group you represent is requesting my vote and this is a serious matter, in the name of “open communications” I would appreciate a written response to this letter. I have sent it as a “pdf” document via email and via US Mail. You should respond in kind. Please spare me the color backgrounds, etc. Simple B&W text will be sufficient.
You have stated in your letter and enclosures that “a grassroots movement….has been growing” and has “now organized the Residents of Change (ROC)”. You also stated that “we have chosen three candidates to run for the positions open on the board in 2008” and that “a majority of us have been displeased with the board”.
From your letter and enclosure I conclude the three candidates to whom I am addressing this letter are running at the request of the majority of the unit owners, who are dissatisfied, and whom they represent. You are requesting that I and the other unit owners who are not members of “ROC” vote in support of your majority.
I’d like to make an informed choice. I construe from your statements that you represent a majority, that is, at least 169 units, who are, you say, displeased. If so, you should have no difficulty in providing me with a list of the units whose owners are a part of your majority. I don’t think this is an outrageous request. You have made certain statements and you should be willing and able to back them up. I expect substantiation from my board and from potential board members.
If you don’t provide details, then I must conclude that some of the statements the “ROC” has made in the letter and enclosure, etc. are false, and designed to deliberately mislead me and my fellow unit owners.
If I seem concerned, it is because I am, and I have a lot of questions. But first, let me give you my perspective.
The issues seem to be about “being heard” and about expenses and assessments. BLMH has amassed significant reserves which the current board has allocated to specific repairs. The funds are published in the annual budget and balance sheet. These are allocated to roofing, about 45%; paving, about 28% and the balance to concrete, masonry, lake restoration and carpeting. I am paying a monthly assessment of which a substantial amount, that is, about 19% is currently allocated to reserves for these published maintenance items. I have paid these amounts for years because I support the maintenance items and to avoid special assessments. Over the years I have discussed this, written the board and received responses from the board.
On the other hand, the “ROC” has given me no substantive information at all and I think my concerns are very, very warranted. According to what you have sent me, you have been planning this for some time. So why no specific program ideas in your letter except advocating a website? I appreciate that you went to the expense of mailing a letter ($141.12 by my calculator). However, I do not understand why there is no “ROC” website supporting the running battle which has apparently been waged for some period of time and at which I could get “the whole story”.
As I see it, unit owners have differing financial and life style issues and choices. BLMH includes “seniors” who have been here for 20 to 30 years and “newbie’s” who have purchased a unit within the past 2 years. Some of us will be here at BLMH for another 20 years, and some are planning on moving in one or two. Within this diverse body there are unit owners who are involved and are out there watering the lawn during droughts, or shoveling the snow when we get that frequent dusting, or salting after icing, clearing iced gutters, etc. Some pick up the newspapers and trash that collects in entryways, and even vacuum the halls. Some are board volunteers. Others do absolutely nothing. Some probably care little about the grounds except as a dumping ground for their pets and others would love to use the grounds for lawn parties and barbecues. The unit owners have different perspectives and I suspect it is not possible to keep all of us happy. For example, BLMH assessments pay for the water used to wash unit owner’s automobiles. That could be considered wasteful and poor use of BLMH funds. Certain “forward thinking” communities are, in fact, banning this practice.
Each month I pay an assessment, the allocation of which requires the balancing of the differences of the unit owners. This includes the accumulation of reserves for capital expenditures and spending for “preventative maintenance”, and for out of pocket costs for utilities. I don’t think we will all agree on what is important or significant. Some unit owners would consider using certain resources to be wasteful or unnecessary. This could include hiring professionals to clean the garages or entryway and stairways. On the other hand, some unit owners expect this level of service and are willing to pay for it.
Some unit owners, who are planning on selling in one, two or five years probably view putting aside large sums into reserves as a poor use of their money. Others see it as a prudent savings program designed to avoid special assessments.
Some may think the association reserves should cover the replacement of windows, others not. I think unit owners should pay for specific repairs to their units. That includes windows. I think that building common elements which extend to or over multiple units, such as roofs, should be covered by the assessments.
Some are in favor of special assessments, others are not. Do you advocate the accumulation of reserves as does the current board, or are you proposing a “pay as you go” special assessment approach?
This complex is approximately 30 years old. Some repairs are necessary. However, there are differences in opinion. What are your criteria for repairs and your philosophy?
You are running on a slate of “change”. That’s an unfortunate term; I would prefer that we seek “solutions”. Your letter stresses the proposed ROC board members’ qualifications, and generalities about complaints about being heard, displeasure with the current board and management, reducing expenses, achieving the lowest possible assessments, etc. I assume you and/or the “ROC” members have specific changes you want to make upon your election. I assume the current direction is not the way you want to go. Otherwise, there would be no reason for changing the board as you intend to do. It would be appropriate for you to share your specific intentions with me and the other unit owners before the election. That would be a good demonstration of “open” communications.
I have the record of the current board and that includes their published intentions for the cash reserves. All I have from you are complaints and some nebulous promises. Here are specific questions for you to address in your response. Based on that response, I may have additional questions or request clarification:
September 11, 2008
To: “ROC” board candidates and the “Residents of Change”
Dear Sirs and Madams:
Thank you for your letter, the enclosure and voting instructions. On reading them, I have questions and concerns. Since the group you represent is requesting my vote and this is a serious matter, in the name of “open communications” I would appreciate a written response to this letter. I have sent it as a “pdf” document via email and via US Mail. You should respond in kind. Please spare me the color backgrounds, etc. Simple B&W text will be sufficient.
You have stated in your letter and enclosures that “a grassroots movement….has been growing” and has “now organized the Residents of Change (ROC)”. You also stated that “we have chosen three candidates to run for the positions open on the board in 2008” and that “a majority of us have been displeased with the board”.
From your letter and enclosure I conclude the three candidates to whom I am addressing this letter are running at the request of the majority of the unit owners, who are dissatisfied, and whom they represent. You are requesting that I and the other unit owners who are not members of “ROC” vote in support of your majority.
I’d like to make an informed choice. I construe from your statements that you represent a majority, that is, at least 169 units, who are, you say, displeased. If so, you should have no difficulty in providing me with a list of the units whose owners are a part of your majority. I don’t think this is an outrageous request. You have made certain statements and you should be willing and able to back them up. I expect substantiation from my board and from potential board members.
If you don’t provide details, then I must conclude that some of the statements the “ROC” has made in the letter and enclosure, etc. are false, and designed to deliberately mislead me and my fellow unit owners.
If I seem concerned, it is because I am, and I have a lot of questions. But first, let me give you my perspective.
The issues seem to be about “being heard” and about expenses and assessments. BLMH has amassed significant reserves which the current board has allocated to specific repairs. The funds are published in the annual budget and balance sheet. These are allocated to roofing, about 45%; paving, about 28% and the balance to concrete, masonry, lake restoration and carpeting. I am paying a monthly assessment of which a substantial amount, that is, about 19% is currently allocated to reserves for these published maintenance items. I have paid these amounts for years because I support the maintenance items and to avoid special assessments. Over the years I have discussed this, written the board and received responses from the board.
On the other hand, the “ROC” has given me no substantive information at all and I think my concerns are very, very warranted. According to what you have sent me, you have been planning this for some time. So why no specific program ideas in your letter except advocating a website? I appreciate that you went to the expense of mailing a letter ($141.12 by my calculator). However, I do not understand why there is no “ROC” website supporting the running battle which has apparently been waged for some period of time and at which I could get “the whole story”.
As I see it, unit owners have differing financial and life style issues and choices. BLMH includes “seniors” who have been here for 20 to 30 years and “newbie’s” who have purchased a unit within the past 2 years. Some of us will be here at BLMH for another 20 years, and some are planning on moving in one or two. Within this diverse body there are unit owners who are involved and are out there watering the lawn during droughts, or shoveling the snow when we get that frequent dusting, or salting after icing, clearing iced gutters, etc. Some pick up the newspapers and trash that collects in entryways, and even vacuum the halls. Some are board volunteers. Others do absolutely nothing. Some probably care little about the grounds except as a dumping ground for their pets and others would love to use the grounds for lawn parties and barbecues. The unit owners have different perspectives and I suspect it is not possible to keep all of us happy. For example, BLMH assessments pay for the water used to wash unit owner’s automobiles. That could be considered wasteful and poor use of BLMH funds. Certain “forward thinking” communities are, in fact, banning this practice.
Each month I pay an assessment, the allocation of which requires the balancing of the differences of the unit owners. This includes the accumulation of reserves for capital expenditures and spending for “preventative maintenance”, and for out of pocket costs for utilities. I don’t think we will all agree on what is important or significant. Some unit owners would consider using certain resources to be wasteful or unnecessary. This could include hiring professionals to clean the garages or entryway and stairways. On the other hand, some unit owners expect this level of service and are willing to pay for it.
Some unit owners, who are planning on selling in one, two or five years probably view putting aside large sums into reserves as a poor use of their money. Others see it as a prudent savings program designed to avoid special assessments.
Some may think the association reserves should cover the replacement of windows, others not. I think unit owners should pay for specific repairs to their units. That includes windows. I think that building common elements which extend to or over multiple units, such as roofs, should be covered by the assessments.
Some are in favor of special assessments, others are not. Do you advocate the accumulation of reserves as does the current board, or are you proposing a “pay as you go” special assessment approach?
This complex is approximately 30 years old. Some repairs are necessary. However, there are differences in opinion. What are your criteria for repairs and your philosophy?
You are running on a slate of “change”. That’s an unfortunate term; I would prefer that we seek “solutions”. Your letter stresses the proposed ROC board members’ qualifications, and generalities about complaints about being heard, displeasure with the current board and management, reducing expenses, achieving the lowest possible assessments, etc. I assume you and/or the “ROC” members have specific changes you want to make upon your election. I assume the current direction is not the way you want to go. Otherwise, there would be no reason for changing the board as you intend to do. It would be appropriate for you to share your specific intentions with me and the other unit owners before the election. That would be a good demonstration of “open” communications.
I have the record of the current board and that includes their published intentions for the cash reserves. All I have from you are complaints and some nebulous promises. Here are specific questions for you to address in your response. Based on that response, I may have additional questions or request clarification:
- I have been a volunteer in other capacities. The board is a body of volunteers. I suspect there is a lot of work involved. As with most organizations, either the volunteers do the work, or professionals for a fee do the work. How much time can you devote to this? You included a brief resume for the three board candidates who are all full time “professionals”. What you did not state was that you will make the commitment including time as required to fulfill your obligations on the board, and your promise that “we all be heard”.
- Your “Slate of Objectives” specifically states as an objective “We will seek ways to reduce expenses and keep assessments as low as possible”. What does “as low as possible” mean? You are implying that expenses will be reduced, for the goal of reducing assessments. How will you achieve this and what are your specific proposals to accomplish this? I am certain you are aware of the rapid rise of inflation, in particular for commodities and energy.
- The ROC slate of objectives includes “We will be the voice of the residents……champion[ing] forward thinking ideas”. The board is the elected voice of the current residents. The current one is and the next one also will be. However, the board does not and will not always act in accordance with my personal wishes. It is also true that the board has far more power than being simply “my” or “our” voice. The purpose of the board is responsible representation. Someone who can be trusted to responsibly use the funds I put into my assessment envelope each month. The ROC slate includes the statement “We will seek ways to reduce expenses and keep our assessments as low as possible.” So would you tell me where they stand on these issues:
- a. I assume the website you mention is one of the ROC’s “forward thinking” ideas. So how about giving me an idea about what other forward thinking ideas you have and are planning?
- b. How many of our residents have the ability to reach the website you are promoting? If they do not, then what? How much will that site cost? Will volunteers do the work and function as webmaster, etc. as part of their duties on the board, or will it require monies paid from the monthly assessments? If so, what reduction in service will be used to offset this cost increase? If none, then where will the money come from?
- c. The ROC and its candidates have stated that they will “encourage open, two-way communications”. They further state that suggestions will be via email or written note. That is not significantly different than the current system and would be inadequate. To empower change and “open” communication it will be necessary to have a web site open to all unit owners and where ALL letters and responses are posted. Unit owners should be able to post their questions and concerns without censure by the ROC, the Board or anyone else, within the limits of what is considered to be non-obscene. Who would moderate this?
- d. Electricity is slated for a 6-1/2% increase this year. What reduction in services are you planning to offset this and other cost increases? If no reduction then where will the money come from?
- e. This association has accumulated financial reserves, which are increasing as unit owners pay their monthly dues. Each year I am contributing about $750 to the reserve fund. Do you consider the financial reserves of BLMH to be excessive? Or adequate? Or inadequate? And why?
- f. Costs involve the day to day cash outlays to cover operating expenses. Monthly assessments are the collections to offset those expenses. It is possible to lower monthly assessments while costs are increasing. For example, you could deplete reserves to cover the differences between funds collected and “costs”. This I would call the “mortgage your future” approach. Are you planning to use this approach? If so, how much will you divert?
- g. What are your ideas regarding monthly assessments and special assessments. Specifically, will you reduce monthly assessments and replace them with special assessments? Will there be any special assessments?
- h. The current board and management has an agenda for building up the association reserves for the purpose of roof replacement and repair, paving of streets, lake restoration, concrete, masonry and carpeting. Will these programs continue?
- i. If you are not if favor of the current capital spending programs then what specific programs do you favor for the spending of the reserves? What projects are you advocating?
- j. Will there be balloting for all future uses of financial reserves? If so, will the results be published with the vote by unit and therefore verifiable?
- k. A “giveback” of financial reserves would be a windfall for certain unit owners. Are you planning or advocating such a program? If so, how would you disburse funds equitably; for example, using a formula based upon the amounts actually paid by the current unit owners?
- l. Are you planning on investing the cash on the accounts of BLMH in some other location than the present ones?
- m. Will you replace the current management company? If so, why?
- n. What other changes are you planning?
Thank you for your consideration and prompt response.
“A Very Concerned Unit Owner”
Thursday, September 11, 2008
Residents of Change!
Board elections are fast approaching and this year “change” seems to be permeating the air. We have a self-appointed group call the “ROC” or “Residents of Change” which wants to be on the board. They have circulated a colorful (as in printed with a color laser printer) letter and profiles of several board candidates. I would have prefered that they be about "solutions" but I and my fellow unit owners are apparently not so lucky!
They summarize the candidate profiles with this statement:
“A grassroots movement to change the character and the attitude of the BLMH association board has been growing and is now organized as the Residents of Change (ROC). Our first order of business is to place a ROC team on the board and we have chosen three candidates to run for the positions open on the board in 2008. The ROC candidates are all successful professionals with backgrounds in project management, conflict resolution, team building, and interpersonal communications.”
The “ROC” is running with a series of objectives. These include:
"As you know, we will be voting for association board members in the upcoming September 25th elections. For a long time now, a majority of us have been displeased with the current board for its lack of respect for the concerns and opinions of BLMH residents, as well as its failure to initiate or maintain any type of communication between us and the board."
I found a proxy instruction taped to my unit door this morning. This was apparently put there by someone else in the unit. However, no one was willing to take credit for this.
I have read all the material that the 'ROC' has given me and I have grave misgivings. I recall a story my spouse's 90 year old aunt told us a couple of years ago. That story was about the changes that were wrought on her condominium by a new board that was elected when some unit owner's were "dissatisfied". The result was higher assessments, and it turned out her new board had an agenda to make certain improvements that they felt were necessary, such as new windows on the units. My poor aunt was hit with a large assessment and she was convinced that new windows were not necessary. But that board had it's way!
As for the "ROC" I don't know if they can be trusted. I am unclear what their agenda really is. OK, I got it, they want to lower expenses and they are for everyone being heard. But what do they intend to accomplish? How will they accomplish this "lowering"? Will repairs be stopped or will they decide to allocate the funds to some "pet project" as occurred with Aunt "A"? I don't know because these people aren't talking.
One of the items they are promoting is a web site for the association. Great! But why haven't they put their agenda on a blog such as this one and promoted it to all of the residents?
They claim to be a majority. But until we received the letter requesting their vote, we had never been contacted by them. This leads me to question that statement. If it is false, then that leads me to surmise that these people cannot be trusted.
I suspect they are preying on peoples fears and are possibly making an end run at the board. But why? One possibility is to get to the cash reserves. I don't know how far they could go if elected. I suppose they could replace the management company with their own cronies. That would give them free reign.
I called our management company to discuss how far this can go, but the people I needed to speak to were not in. As this is not an "emergency" I'll wait.
In the mean time So I decided to formulate a letter to the three candidates and send a copy to the current board. I wonder if I'll even get a response from the "ROC"?
They summarize the candidate profiles with this statement:
“A grassroots movement to change the character and the attitude of the BLMH association board has been growing and is now organized as the Residents of Change (ROC). Our first order of business is to place a ROC team on the board and we have chosen three candidates to run for the positions open on the board in 2008. The ROC candidates are all successful professionals with backgrounds in project management, conflict resolution, team building, and interpersonal communications.”
The “ROC” is running with a series of objectives. These include:
- We will be the voice of the residents, and will work with our management agents to be sure that our collective voice is heard.
- We will champion forward thinking ideas over repressive measures.
- We will seek ways to reduce expenses and keep our assessments as low as possible.
- We will encourage open, two-way communications by:
- Creating an association website by posting news and bylaws.
- Establishing suggestion venues via email or written note.
- Publishing the minutes of the Board meetings.
- Notifying residents of agenda topics.
- Respecting residents opinions and concerns.
"As you know, we will be voting for association board members in the upcoming September 25th elections. For a long time now, a majority of us have been displeased with the current board for its lack of respect for the concerns and opinions of BLMH residents, as well as its failure to initiate or maintain any type of communication between us and the board."
I found a proxy instruction taped to my unit door this morning. This was apparently put there by someone else in the unit. However, no one was willing to take credit for this.
I have read all the material that the 'ROC' has given me and I have grave misgivings. I recall a story my spouse's 90 year old aunt told us a couple of years ago. That story was about the changes that were wrought on her condominium by a new board that was elected when some unit owner's were "dissatisfied". The result was higher assessments, and it turned out her new board had an agenda to make certain improvements that they felt were necessary, such as new windows on the units. My poor aunt was hit with a large assessment and she was convinced that new windows were not necessary. But that board had it's way!
As for the "ROC" I don't know if they can be trusted. I am unclear what their agenda really is. OK, I got it, they want to lower expenses and they are for everyone being heard. But what do they intend to accomplish? How will they accomplish this "lowering"? Will repairs be stopped or will they decide to allocate the funds to some "pet project" as occurred with Aunt "A"? I don't know because these people aren't talking.
One of the items they are promoting is a web site for the association. Great! But why haven't they put their agenda on a blog such as this one and promoted it to all of the residents?
They claim to be a majority. But until we received the letter requesting their vote, we had never been contacted by them. This leads me to question that statement. If it is false, then that leads me to surmise that these people cannot be trusted.
I suspect they are preying on peoples fears and are possibly making an end run at the board. But why? One possibility is to get to the cash reserves. I don't know how far they could go if elected. I suppose they could replace the management company with their own cronies. That would give them free reign.
I called our management company to discuss how far this can go, but the people I needed to speak to were not in. As this is not an "emergency" I'll wait.
In the mean time So I decided to formulate a letter to the three candidates and send a copy to the current board. I wonder if I'll even get a response from the "ROC"?
Sunday, September 7, 2008
Assessments!
When we were conducting our review of the property, prior to purchase, we were given financial data on the association. We also conducted some informal interviews of people we saw on the grounds. After confirming that they were unit owners, we asked them some scripted questions. The only issue anyone had was the fact that the assessments had been increasing, and one person was a bit unhappy with the special assessment for the garage doors. These conversations were one of the triggers for a more in depth investigation on the part of my spouse and I.
In a condominium complex such as the one we live in, there are trade-offs. We own the streets, the pipes under them and the street lights above. So we control all access to the property. On the other hand, our assessments pay for snow plowing, street repairs, electricity for lighting, grounds keeping. We have a nice private community. We have to rely on our own resources for all grounds maintenance. There is a cost for that.
As the assessments increased, I decided to take the annual statements provided by the management company and determine exactly where our assessment payments were going. Using the year ended 12/31/2006 data, I constructed a spread sheet, which allocated my assessment into all of the categories. This gave me a better picture of how much of each month’s assessment was being spent which area. I sent a general letter to the management with my comments.
As I see it, I'm paying a price as a relatively "new" unit owner. If we eliminated all of the assessment funds allocated for reserves, I would be paying a monthly assessment of about $227.00. When I purchased a unit, the cash reserves were somewhere between $297 and $321 for each unit! So I have been paying an accelerated monthly assessment to make up for this shortfall accumulated over 25 years. Of course, that has created a problem for the board, as unit owners are used to lower assessments. Unfortunately the board still has to make up the shortfall or issue special assessments, which will penalize new owners. Can you imagine the problem for a new owner, who moves in and is then given a $5000 assessment for a new roof? And who had the benefit of the roof that wore out? Why it was the previous owner, of course. Based on the conversations at some of the annual meetings, some of my fellow unit owners don't see it that way. I suppose they are hoping to sell before the roof repairs are required.
These were the significant distribution categories:
Utilities = 6.15%
Maintenance and Repair = 4.36%
Common Area Maintenance = 21.2%
Waterfall/Creek Maintenance = 0.26%
Building Maintenance = 31.48%
Administrative Expense/Insurance = 17.39%
General Reserves = 27.4%
These were further distributed into the following sub-categories, and the monthly percentages and dollar amounts were:
Utilities
Electric = 4.55%, $11.03
Water = 1.41%, $3.41
Pest Control = 0.2%, $0.47
Maintenance and Repair
Janitorial Contract = 4.36%, $10.56
Common Area Maintenance
Grounds Contract = 9.44%, $22.90
Grounds Maintenance = 4.55%, $11.03
Tree Maintenance = 2.6%, $6.30
Sealcoating = 0.72%, $1.73
Snow Removal = 3.9%, $9.46
Waterfall/Creek Maintenance
Aerators/Lakes/Streams = 0.26%, $0.63
Building Maintenance
Maintenance Contract = 16.05%, $38.92
Panel/Trim Replacements = 1.41%, $3.41
Lighting = 1.3%, $3.15
Miscellaneous Repairs = 7.58%, $18.39
Outside Vendors = 0.07%, $0.16
Painting = 4.85%, $11.77
Roof Repairs and Maintenance = 0.22%, $0.53
Administrative Expense/Insurance
Petty Cash = 0.03%, $0.08
Postage = 0.26%, $0.63
Printing and Duplicating = 0.37%, $0.89
Management Fees = 5.80%, $14.05
Legal Collections = 0.13%, $0.32
Accounting = 0.31%, $0.76
Miscellaneous Administration = 0.09%, $0.21
General Reserves
Paving = 7.79%, $18.88
Lake Restoration = 1.56%, $3.78
Carpet = 0.52%, $1.26
Roof = 12.46%, $30.20
Concrete = 3.11%, $7.55
Masonry = 1.96%, $4.76
In a condominium complex such as the one we live in, there are trade-offs. We own the streets, the pipes under them and the street lights above. So we control all access to the property. On the other hand, our assessments pay for snow plowing, street repairs, electricity for lighting, grounds keeping. We have a nice private community. We have to rely on our own resources for all grounds maintenance. There is a cost for that.
As the assessments increased, I decided to take the annual statements provided by the management company and determine exactly where our assessment payments were going. Using the year ended 12/31/2006 data, I constructed a spread sheet, which allocated my assessment into all of the categories. This gave me a better picture of how much of each month’s assessment was being spent which area. I sent a general letter to the management with my comments.
As I see it, I'm paying a price as a relatively "new" unit owner. If we eliminated all of the assessment funds allocated for reserves, I would be paying a monthly assessment of about $227.00. When I purchased a unit, the cash reserves were somewhere between $297 and $321 for each unit! So I have been paying an accelerated monthly assessment to make up for this shortfall accumulated over 25 years. Of course, that has created a problem for the board, as unit owners are used to lower assessments. Unfortunately the board still has to make up the shortfall or issue special assessments, which will penalize new owners. Can you imagine the problem for a new owner, who moves in and is then given a $5000 assessment for a new roof? And who had the benefit of the roof that wore out? Why it was the previous owner, of course. Based on the conversations at some of the annual meetings, some of my fellow unit owners don't see it that way. I suppose they are hoping to sell before the roof repairs are required.
These were the significant distribution categories:
Utilities = 6.15%
Maintenance and Repair = 4.36%
Common Area Maintenance = 21.2%
Waterfall/Creek Maintenance = 0.26%
Building Maintenance = 31.48%
Administrative Expense/Insurance = 17.39%
General Reserves = 27.4%
These were further distributed into the following sub-categories, and the monthly percentages and dollar amounts were:
Utilities
Electric = 4.55%, $11.03
Water = 1.41%, $3.41
Pest Control = 0.2%, $0.47
Maintenance and Repair
Janitorial Contract = 4.36%, $10.56
Common Area Maintenance
Grounds Contract = 9.44%, $22.90
Grounds Maintenance = 4.55%, $11.03
Tree Maintenance = 2.6%, $6.30
Sealcoating = 0.72%, $1.73
Snow Removal = 3.9%, $9.46
Waterfall/Creek Maintenance
Aerators/Lakes/Streams = 0.26%, $0.63
Building Maintenance
Maintenance Contract = 16.05%, $38.92
Panel/Trim Replacements = 1.41%, $3.41
Lighting = 1.3%, $3.15
Miscellaneous Repairs = 7.58%, $18.39
Outside Vendors = 0.07%, $0.16
Painting = 4.85%, $11.77
Roof Repairs and Maintenance = 0.22%, $0.53
Administrative Expense/Insurance
Petty Cash = 0.03%, $0.08
Postage = 0.26%, $0.63
Printing and Duplicating = 0.37%, $0.89
Management Fees = 5.80%, $14.05
Legal Collections = 0.13%, $0.32
Accounting = 0.31%, $0.76
Miscellaneous Administration = 0.09%, $0.21
General Reserves
Paving = 7.79%, $18.88
Lake Restoration = 1.56%, $3.78
Carpet = 0.52%, $1.26
Roof = 12.46%, $30.20
Concrete = 3.11%, $7.55
Masonry = 1.96%, $4.76
About our Condominium
Our condo complex has eighty-four buildings in a beautiful landscaped setting. Each "unit" is one of four in each building, so the complex totals 336 units. The complex was built about 1978.
There are two lakes near by and some of the units back up to them. Others have views of man-made "streams". A lovely, quiet setting.
As with all condominiums, the unit owners are a more or less agreeable group. Some have difficulties distinguishing the difference between being a condominium owner and an apartment dweller. So some of the occasional requests made by management are sometimes honored but are frequently ignored.
However, we are generally pleased with the association, the management and our neighbors.
We purchased our condo in 2001, but the closing was in early 2002. At the time it was unoccupied. It was freshly painted and the carpeting had been cleaned. However, in other respects is was in poorer condition. The kitchen was a disaster. I had to convince my spouse that I could “fix” the kitchen in order to purchase the condo. Ultimately, we gutted it and started over. Prior to the purchase we had done our “due diligence” and hired an inspector. Most of the problems he uncovered were due to age. Several were repaired by the seller. However, a problem with the hot water heater escaped us. It had been off for a period of months and when the gas pilot was ignited, it developed a leak.
While doing our research prior to purchase, we of course obtained and read a copy of the by-laws of the association. We requested and obtained a copy of the balance sheet and associated financial records. We were alarmed by the state of the the cash reserves, which were only $297 per unit! I ran the financial data past my accountant without giving him my concerns and he pointed out the same issues I had. After reviewing it all, my spouse and I made a list of questions and concerns, and sent it to the management office. This resulted in a long conversation with the manager, who answered all of our questions in a manner that I believe was truthful and with professional courtesy.
In that conversation, he confirmed that the association was opposed to “special assessments”. In my eyes this was a good thing. However, due to the low reserves, one assessment had been made to unit owners to replace the garage doors. No others were planned and the association was reviewing the monthly assessment to determine how to increase this, so as to cover certain maintenance issues. It was the manager’s opinion that the assessments had been too low for a long period of time. His firm had assumed the reigns recently and he assured me that the board, which were all volunteers, were fully engaged with this process.
We discussed other pressing maintenance issues. This led to a discussion of the state of the roofs. It was apparent that within 5 to 10 years rooftops replacement would be required. As the existing shingles had been covered once with new, this would require stripping the old completely and then placing a waterproof membrane and new shingles. The design of the roof made this a complex project. I did some quick calculations and if the cost were in the range of $15,000 to $20,000 per building, the total reserves of the association were less than 1/5 of that required for this project! It would take a few years to accumulate the necessary funds in the "reserves". Fortunately, the board and the association had time on it's side.
Despite our concerns, my spouse and I decided to purchase the condo. We discussed at length the issue of the low reserves. Obviously, there were two methods for the board to address this. One method was to increase the monthly assessment for the purpose of amassing the necessary cash for the roofing project and other costs and repairs. Another method would be a special assessment levied on each unit owner. We attended a few monthly meetings and asked questions of the board. The annual meetings are held in September of each year. During those meetings the board and professional manager make presentations regarding the financial health of the association, planned projects and address concerns of the unit owners.
Generally, the annual meetings were attended by less than 25% of the unit owners, although the necessary percentages always voted. I or my spouse attended all of the annual meetings. One year I did miss a meeting because of business travel which I could not avoid. The meetings were interesting, but some of the topics that the attending unit owners brought to the attention of the board and management were "interesting" to say the least. One item on the agenda was the banning of pets! Apparently, there were complaints about noise and/or animal droppings. From my observation, most owners who pass below our kitchen window keep their animals leashed and are carry doggy-do bags. But a few do not carry such bags. Another issue was noise due to hardwood floors. The units were originally covered with wall to wall carpeting. Changes to the by-laws at the request of unit owners had expanded allowable flooring to include hardwood. However, there are different grades of sound insulation and padding, and some unit owners were experiencing problems with the installations in the units above them. The management and board promised to review this and to my knowledge the specifications were revised.
Dealing with noise is one of the issues here. These units are generally very quiet and secluded. There was a time I was barbecuing on the deck. I went in and out a few times to check the progress of dinner, each time, forcefully sliding the door behind me to keep the bugs out. I didn't realize it, but this was causing quite a racket. Upon heading outside one last time, I was surprised to see my neighbors daughter standing on the lawn, her hands on her shoulders, face screwed up and glaring at me. I said "hi" and it was only then that I figured out what the problem was! She shook her head and stormed back into her unit. After that, I was much more cautious entering and leaving the deck. However, there have been numerous times my neighbors slammed their doors and on several occasions my spouse asked me if they were having a fight downstairs. I replied "no, I don' t think so" and went about my business.
I have no solution to this unless the ambient, background noise level increases. But that solution would be worse than the problem.
We also have critters of all sorts. Many birds, squirrels, ducks, geese, etc. Some of the unit owners feed them, even though it is against the by-laws. The management brought this up at one of the annual meetings and the manager stated that as far as he was concerned, these animals were all "rats". You should have seen the horror on some of the faces in the audience. The manager went on to say that there was abundant natural food and feeding them simply increased their numbers and when they got into someone's attic they were no longer "cute and cuddly". This sounded suspiciously like some of the stuff I have heard at the forest preserve. I wonder if that's where the manager got it?
Another issue was roof repairs. The board decided on a trial modification to the roof of several units, as part of the roofing repair/replacement. They included a relocation of one of the downspouts. At present, all units have a gutter downspout which discharges into the middle of the driveway. In winter this ices and causes some problems. Well, to alleviate that, someone had the bright idea to move the downspout to the extreme end of the gutter which is not on the driveway. This, unfortunately, meant that in downpours water can collect at the entrance of the building. We had a few very upset unit owners and that is understandable. Perhaps relocation of the downspouts is not possible?
As time went on, the issue of assessments has take on more and more of the conversation at the annual meetings. I'm not surprised. The increases have been continuous, at a rate of about 6-1/2 percent per year. By September 2007 some unit owners were at a breaking point. Natural gas and electricity prices have been spiking upward and since February 2005 my gasoline costs have more than doubles. While the cost of gasoline has no direct bearing on the condominium, it does impact peoples' budgets. So we have been hit by unrelenting increases for several years. It is truly unfortunate that this association had not done better planning. We are caught between the proverbial rock and a hard place. We are not alone. I have been checking out some of the forums and blogs for some of the other condominiums in the area and there are some mighty unhappy people out there. Their complaints are about assessments for paving and the like, some of which have been for $2,000! We have been fortunate and my spouse and I were expecting annual assessment increases to cover the short falls. Nonetheless, it is beginning to hurt.
At least there have been no special assessments. Of course, the board could always resort to that. However, there is some unfairness in that approach. Paving and roofing are things that wear out over long periods of time, for example 10 to 20 years. So I today am enjoying the benefits of a roof that someone else paid for. It would make sense and be fair to assess me for the cost of a roof at a rate of 1/20 each year and for paving at a similar rate. The collected monies are then put in a special fund called a "reserve". If I sell my unit in 15 years the new owner picks up the payments where I left off. When the roof is replaced in 5 years after purchasing the unit, the funds are in place, there is no special assessment, and I enjoyed the benefits of the roof as did the owner who replaced me. Sounds fair to me!
However, if assessments are too low, then reserves are not built up at a rate sufficient to replace the roof when the time comes. Then a special assessment is necessary. Obviously, if I am a "new" unit owner and a roof is installed two years after I move in, I have been unfairly assessed to pay for the previous owner's roof.
Some of this has been explained in a cursory fashion at some of the annual meetings. But this is a delicate topic. No one wants to get into a discussion about "insufficient funds". Many of the unit owners who have attended the meetings don't seem to have the stomach for it, and the board doesn't seem to want to push bad news onto us.
So now, over a period of 6 years, our assessment has steadily increased from $204.64 per month to the current $293.51 per month. While we were not thrilled by these increases, with an average annual rate of 6.2%, they are better than paying special assessments, of which there are none. If our assessment had been increasing at the rate of inflation (about 3.5% to 4.0%) it would today be no more than $248.98. However, the board has been playing "catch up" and the amount of the reserves has increased dramatically as promised and the board has been able to begin roof replacements.
There are no special assessments on the horizon. However, the screams of some of the unit owners over the assessment increases have been quite loud. It is unfortunate that there is no free ride! I have written several letters over the years to the board in which I expressed my concerns and my preference for monthly assessment increases as opposed to special assessments. One of the problems in a complex of this type are fixed costs. We own the streets and the curbs so all street maintenance, repair, curbs and even electric lighting is born by the unit owners. Some of this infrastructure has a finite life. We have had water main failures in this complex and they too are born by the association. That's the bad news of owning the soil, the roads and everything in and around it.
Of course, the danger is that these assessment increases may not stabilize. There is no easy solution. As I expressed to the board in December of 2006, I appreciated the dilemma and I expressed the opinion that the original unit owners had been given a great gift, for which they were probably not thankful, as they were generally unaware of the precarious financial state of the reserves. That had occurred because their monthly assessments were far, far to low.
Now we have a situation where some people, who were spoiled by this "free ride" of unreasonably low assessments now believe they are being manipulated and taken advantage of!
I have owned a home and it is necessary to have savings for maintenance. Roof repairs are costly and I have replaced a roof. There are two choices. Save a monthly amount for the extra-ordinary repairs and hopefully the saved amount, or reserve, will be sufficient when the repairs are required. Alternatively, one can operate on a wing and a prayer and simply get a second mortgage when the roof repair is required, or ‘charge it’ when the furnace fails. However, condo associations are best not operated in that fashion. If they are, then owners get hit with large assessments for various repairs. Or perhaps the plan of some of these unit owners is to bail and sell the condo to some per sucker prior to the levying of such assessments?
There are two lakes near by and some of the units back up to them. Others have views of man-made "streams". A lovely, quiet setting.
As with all condominiums, the unit owners are a more or less agreeable group. Some have difficulties distinguishing the difference between being a condominium owner and an apartment dweller. So some of the occasional requests made by management are sometimes honored but are frequently ignored.
However, we are generally pleased with the association, the management and our neighbors.
We purchased our condo in 2001, but the closing was in early 2002. At the time it was unoccupied. It was freshly painted and the carpeting had been cleaned. However, in other respects is was in poorer condition. The kitchen was a disaster. I had to convince my spouse that I could “fix” the kitchen in order to purchase the condo. Ultimately, we gutted it and started over. Prior to the purchase we had done our “due diligence” and hired an inspector. Most of the problems he uncovered were due to age. Several were repaired by the seller. However, a problem with the hot water heater escaped us. It had been off for a period of months and when the gas pilot was ignited, it developed a leak.
While doing our research prior to purchase, we of course obtained and read a copy of the by-laws of the association. We requested and obtained a copy of the balance sheet and associated financial records. We were alarmed by the state of the the cash reserves, which were only $297 per unit! I ran the financial data past my accountant without giving him my concerns and he pointed out the same issues I had. After reviewing it all, my spouse and I made a list of questions and concerns, and sent it to the management office. This resulted in a long conversation with the manager, who answered all of our questions in a manner that I believe was truthful and with professional courtesy.
In that conversation, he confirmed that the association was opposed to “special assessments”. In my eyes this was a good thing. However, due to the low reserves, one assessment had been made to unit owners to replace the garage doors. No others were planned and the association was reviewing the monthly assessment to determine how to increase this, so as to cover certain maintenance issues. It was the manager’s opinion that the assessments had been too low for a long period of time. His firm had assumed the reigns recently and he assured me that the board, which were all volunteers, were fully engaged with this process.
We discussed other pressing maintenance issues. This led to a discussion of the state of the roofs. It was apparent that within 5 to 10 years rooftops replacement would be required. As the existing shingles had been covered once with new, this would require stripping the old completely and then placing a waterproof membrane and new shingles. The design of the roof made this a complex project. I did some quick calculations and if the cost were in the range of $15,000 to $20,000 per building, the total reserves of the association were less than 1/5 of that required for this project! It would take a few years to accumulate the necessary funds in the "reserves". Fortunately, the board and the association had time on it's side.
Despite our concerns, my spouse and I decided to purchase the condo. We discussed at length the issue of the low reserves. Obviously, there were two methods for the board to address this. One method was to increase the monthly assessment for the purpose of amassing the necessary cash for the roofing project and other costs and repairs. Another method would be a special assessment levied on each unit owner. We attended a few monthly meetings and asked questions of the board. The annual meetings are held in September of each year. During those meetings the board and professional manager make presentations regarding the financial health of the association, planned projects and address concerns of the unit owners.
Generally, the annual meetings were attended by less than 25% of the unit owners, although the necessary percentages always voted. I or my spouse attended all of the annual meetings. One year I did miss a meeting because of business travel which I could not avoid. The meetings were interesting, but some of the topics that the attending unit owners brought to the attention of the board and management were "interesting" to say the least. One item on the agenda was the banning of pets! Apparently, there were complaints about noise and/or animal droppings. From my observation, most owners who pass below our kitchen window keep their animals leashed and are carry doggy-do bags. But a few do not carry such bags. Another issue was noise due to hardwood floors. The units were originally covered with wall to wall carpeting. Changes to the by-laws at the request of unit owners had expanded allowable flooring to include hardwood. However, there are different grades of sound insulation and padding, and some unit owners were experiencing problems with the installations in the units above them. The management and board promised to review this and to my knowledge the specifications were revised.
Dealing with noise is one of the issues here. These units are generally very quiet and secluded. There was a time I was barbecuing on the deck. I went in and out a few times to check the progress of dinner, each time, forcefully sliding the door behind me to keep the bugs out. I didn't realize it, but this was causing quite a racket. Upon heading outside one last time, I was surprised to see my neighbors daughter standing on the lawn, her hands on her shoulders, face screwed up and glaring at me. I said "hi" and it was only then that I figured out what the problem was! She shook her head and stormed back into her unit. After that, I was much more cautious entering and leaving the deck. However, there have been numerous times my neighbors slammed their doors and on several occasions my spouse asked me if they were having a fight downstairs. I replied "no, I don' t think so" and went about my business.
I have no solution to this unless the ambient, background noise level increases. But that solution would be worse than the problem.
We also have critters of all sorts. Many birds, squirrels, ducks, geese, etc. Some of the unit owners feed them, even though it is against the by-laws. The management brought this up at one of the annual meetings and the manager stated that as far as he was concerned, these animals were all "rats". You should have seen the horror on some of the faces in the audience. The manager went on to say that there was abundant natural food and feeding them simply increased their numbers and when they got into someone's attic they were no longer "cute and cuddly". This sounded suspiciously like some of the stuff I have heard at the forest preserve. I wonder if that's where the manager got it?
Another issue was roof repairs. The board decided on a trial modification to the roof of several units, as part of the roofing repair/replacement. They included a relocation of one of the downspouts. At present, all units have a gutter downspout which discharges into the middle of the driveway. In winter this ices and causes some problems. Well, to alleviate that, someone had the bright idea to move the downspout to the extreme end of the gutter which is not on the driveway. This, unfortunately, meant that in downpours water can collect at the entrance of the building. We had a few very upset unit owners and that is understandable. Perhaps relocation of the downspouts is not possible?
As time went on, the issue of assessments has take on more and more of the conversation at the annual meetings. I'm not surprised. The increases have been continuous, at a rate of about 6-1/2 percent per year. By September 2007 some unit owners were at a breaking point. Natural gas and electricity prices have been spiking upward and since February 2005 my gasoline costs have more than doubles. While the cost of gasoline has no direct bearing on the condominium, it does impact peoples' budgets. So we have been hit by unrelenting increases for several years. It is truly unfortunate that this association had not done better planning. We are caught between the proverbial rock and a hard place. We are not alone. I have been checking out some of the forums and blogs for some of the other condominiums in the area and there are some mighty unhappy people out there. Their complaints are about assessments for paving and the like, some of which have been for $2,000! We have been fortunate and my spouse and I were expecting annual assessment increases to cover the short falls. Nonetheless, it is beginning to hurt.
At least there have been no special assessments. Of course, the board could always resort to that. However, there is some unfairness in that approach. Paving and roofing are things that wear out over long periods of time, for example 10 to 20 years. So I today am enjoying the benefits of a roof that someone else paid for. It would make sense and be fair to assess me for the cost of a roof at a rate of 1/20 each year and for paving at a similar rate. The collected monies are then put in a special fund called a "reserve". If I sell my unit in 15 years the new owner picks up the payments where I left off. When the roof is replaced in 5 years after purchasing the unit, the funds are in place, there is no special assessment, and I enjoyed the benefits of the roof as did the owner who replaced me. Sounds fair to me!
However, if assessments are too low, then reserves are not built up at a rate sufficient to replace the roof when the time comes. Then a special assessment is necessary. Obviously, if I am a "new" unit owner and a roof is installed two years after I move in, I have been unfairly assessed to pay for the previous owner's roof.
Some of this has been explained in a cursory fashion at some of the annual meetings. But this is a delicate topic. No one wants to get into a discussion about "insufficient funds". Many of the unit owners who have attended the meetings don't seem to have the stomach for it, and the board doesn't seem to want to push bad news onto us.
So now, over a period of 6 years, our assessment has steadily increased from $204.64 per month to the current $293.51 per month. While we were not thrilled by these increases, with an average annual rate of 6.2%, they are better than paying special assessments, of which there are none. If our assessment had been increasing at the rate of inflation (about 3.5% to 4.0%) it would today be no more than $248.98. However, the board has been playing "catch up" and the amount of the reserves has increased dramatically as promised and the board has been able to begin roof replacements.
There are no special assessments on the horizon. However, the screams of some of the unit owners over the assessment increases have been quite loud. It is unfortunate that there is no free ride! I have written several letters over the years to the board in which I expressed my concerns and my preference for monthly assessment increases as opposed to special assessments. One of the problems in a complex of this type are fixed costs. We own the streets and the curbs so all street maintenance, repair, curbs and even electric lighting is born by the unit owners. Some of this infrastructure has a finite life. We have had water main failures in this complex and they too are born by the association. That's the bad news of owning the soil, the roads and everything in and around it.
Of course, the danger is that these assessment increases may not stabilize. There is no easy solution. As I expressed to the board in December of 2006, I appreciated the dilemma and I expressed the opinion that the original unit owners had been given a great gift, for which they were probably not thankful, as they were generally unaware of the precarious financial state of the reserves. That had occurred because their monthly assessments were far, far to low.
Now we have a situation where some people, who were spoiled by this "free ride" of unreasonably low assessments now believe they are being manipulated and taken advantage of!
I have owned a home and it is necessary to have savings for maintenance. Roof repairs are costly and I have replaced a roof. There are two choices. Save a monthly amount for the extra-ordinary repairs and hopefully the saved amount, or reserve, will be sufficient when the repairs are required. Alternatively, one can operate on a wing and a prayer and simply get a second mortgage when the roof repair is required, or ‘charge it’ when the furnace fails. However, condo associations are best not operated in that fashion. If they are, then owners get hit with large assessments for various repairs. Or perhaps the plan of some of these unit owners is to bail and sell the condo to some per sucker prior to the levying of such assessments?
Subscribe to:
Posts (Atom)