Condo Special Assessments

[trueimage]

Hey, wondering if anyone here has dealt with a large special assessment, wondering if there are any laws governing the amounts that can be charged, or how you would force a revote etc.

Just got a letter that at the condo wants to fix the "building envelope" which will cost 2.1 million, and my share of that would be $64,000 due within 30 days of the letter, which would be about 30 days from now. My condo is only assessed at about 265k and I bought it a couple years ago for 335k (I know tax assessment isn't the same as market price). 2 years ago there was a previous special assessment which was supposed to be 1/3 of the total work and which was $8,000.

Any advice would be greatly appreciated.

[newts]

What building is this?

[taco.vidal]

Id be curious to know as well.

Edit: To confirm its not any investment properties Im looking at. Save everyone involved some time.

Originally Posted by newts

What building is this?

[DownInFlames]

Check your bylaws. It's possible a special resolution is required to assess such a large amount. Otherwise the board has authority to collect this money from you to do the repairs.

[trueimage]

Originally Posted by newts

What building is this?

Originally Posted by taco.vidal

Id be curious to know as well.

Edit: To confirm its not any investment properties Im looking at. Save everyone involved some time.

Chateau Falls in connaught. sellers would have to legally disclose at this point anyway.

[trueimage]

Originally Posted by DownInFlames

Check your bylaws. It's possible a special resolution is required to assess such a large amount. Otherwise the board has authority to collect this money from you to do the repairs.

and the board can decide unilaterally?

[DownInFlames]

Originally Posted by trueimage

and the board can decide unilaterally?

Yes, it is their responsibility to maintain the building, and make repairs when required. Usually these are outlined in the reserve fund study so there aren't any surprises. It sounds like you were given notice that these repairs were coming, but I'd question why the cost is so high compared to the estimate made during the previous assessment.

[I-Hate-Hulse]

dp

[I-Hate-Hulse]

Yes. It's just like government - a Board gets elected, and while in power they approve the actions of the property manager. In your case, they've likely found mold and water penetration that put property and people at risk that requires immediate repair by law- they're not doing this for gits and shiggles.

Sounds like you want to throw the Board out and vote in candidates that won't special assess? Why? Don't want to fix your water leakage and mold problems?

Hopefully it's a rental for you. You can deduct it from rental income.

[trueimage]

Originally Posted by I-Hate-Hulse

Yes. It's just like government - a Board gets elected, and while in power they approve the actions of the property manager. In your case, they've likely found mold and water penetration that put property and people at risk that requires immediate repair by law- they're not doing this for gits and shiggles.

Sounds like you want to throw the Board out and vote in candidates that won't special assess? Why? Don't want to fix your water leakage and mold problems?

Hopefully it's a rental for you. You can deduct it from rental income.

Fair enough, but I haven't seen any information on why the estimate doubled in 2 years and how bad the damage is. This is not a rental unfortunately.

Not to mention the first $8500 I spent was for them to replace the roof and in doing so they caused severe water damage to my unit which they have not fixed and after stating they were putting it through insurance have decided not to pay for my repairs and I've been fighting them for 1.5 years for that money. So I paid them $8500 to ruin my condo, and now they want another 64k.

[I-Hate-Hulse]

Typically the Board should put out some information as to the need and cost of the repairs as a matter of courtesy. For the amount they're asking for - most hold a meeting of some sort to provide information, but never to put it to a vote. Your bylaws will dictate what, if any, requirements of the special assessment there are.

Your bylaws will dictate what to do as for your roof leak. Some have a dispute mechanism. If the leak is a result of the actions of the roofer they need to go after him. Sounds like your complex has had water issues in the past - I'll bet that your condo has a ridiculously high deductible for water claims if that's the case, possibly no coverage at all. That'll be why they aren't / can't claim through insurance I suspect. If that's the case - don't count on the Board going after the roofer on your behalf - you'll probably have to go after them yourself.

[Calgary14]

I really hope anyone looking to buy a condo as an investment reads this thread....

[JD]

Originally Posted by Calgary14

I really hope anyone looking to buy a condo as an investment reads this thread....

I figured a comment like this was coming. Admittedly, this can be a downside to owning a condo.

There's no way to 100% protect yourself against this type of thing, but getting a condo assessment and inspection done before you purchase can minimize your risk.

And aside from that, detached homes can come with large, sudden expenditures as well.

Sometimes life costs money. Although I would say this case is an extreme one, I feel for the OP!

Is there an investment that doesn't come with risk and still offers a worthwhile return? As detailed in the other thread, the right condo with the right situation can be a good investment. Make the wrong choice and it can be a disaster. Just like with any stock.

[GoinAllTheWay]

64k???? Good God, now I feel a lot better about my 13k cash call. And we have 2.5 yrs to pay for it.

How the hell is anyone supposed to come up with that kinda cash in 30 days?

How old is this condo?

[Slava]

Originally Posted by JD

I figured a comment like this was coming. Admittedly, this can be a downside to owning a condo.

There's no way to 100% protect yourself against this type of thing, but getting a condo assessment and inspection done before you purchase can minimize your risk.

And aside from that, detached homes can come with large, sudden expenditures as well.

Sometimes life costs money. Although I would say this case is an extreme one, I feel for the OP!

Is there an investment that doesn't come with risk and still offers a worthwhile return? As detailed in the other thread, the right condo with the right situation can be a good investment. Make the wrong choice and it can be a disaster. Just like with any stock.

Sure, but I've owned stocks and securities and never had to pay an extra $65k out of the blue. This could happen if you bought on the margin, but if you don't want that possibility, don't buy on margin and its a non-concern.

[JD]

Originally Posted by Slava

Sure, but I've owned stocks and securities and never had to pay an extra $65k out of the blue. This could happen if you bought on the margin, but if you don't want that possibility, don't buy on margin and its a non-concern.

True enough, it doesn't manifest itself that way, but if you own 10,000 shares of a stock that goes from $20 a share to $12 a share in a short period (ahem, Penn West), you've essentially suffered a similar loss. It happens.

[Mass_nerder]

I was crying because I got stuck with a $2000 call to replace the water heater a few months after the developer turned over the condo to the owners officially. Then $6000 to redo the roof.
My condolences man.
$64,000 in 30 days is ludicrous.

[trueimage]

Originally Posted by GoinAllTheWay

64k???? Good God, now I feel a lot better about my 13k cash call. And we have 2.5 yrs to pay for it.

How the hell is anyone supposed to come up with that kinda cash in 30 days?

How old is this condo?

mid 1980s

stucco facade

stucco + calgary chinooks = $$$$$ apparently


I don't understand how more than 15% of the owners will be able to come up with this amount in that timeframe. Can't they get a loan and spread out the payments over time?

[Kjesse]

That's the worst case of a special assessment I've heard of based on value of the property, though I am aware of a couple cases that are close.

I'd suggest you get together with other owners who have never sat on the board, compare notes and obtain proper legal advice. Yes it will cost money but given the outlay you're being asked for its worth it.

The bylaws of the condo corp will set out what the board can and can't do in terms of special assessments. I think there is also some investigation warranted into how the initial repair was stated to be 1/3 of the way there but now that's out the door. It bears out some investigation as to if all proper steps were taken in terms of evaluating the need for repairs and carrying them out both in a timely and proper manner, and finally whether the repairs that were made met the standard expected. If some of the fault of the current situation is due to the board not acting reasonably promptly knowing there were leak problems, and that caused them to get much worse, you may have access to insurance for at least partial relief. Also its suspicious that the cost of the repairs has escalated so drastically in such a short period of time.

[Slava]

Originally Posted by JD

True enough, it doesn't manifest itself that way, but if you own 10,000 shares of a stock that goes from $20 a share to $12 a share in a short period (ahem, Penn West), you've essentially suffered a similar loss. It happens.

Still not the same thing though because you've put out the money and that's that. Here you've put out the money for a property and have to spend more. Obviously you can lose money in either case, but you don't have to pay maintenance on securities (aside from the aforementioned maintenance margin, if you decide to take that risk).