Condo Media - July 2014 - 48

MANAGEMENT
pill to swallow; coming up with an additional $143/month should certainly be
more feasible for most homeowners.
It's a good idea for the board to discuss
up front how they intend to penalize, if at
all, those homeowners who continue to
pay their regular monthly assessment in a
timely manner but are unable to come up
with the additional funds on time. And be
prepared for homeowners who ask for a
longer payout term.
And, oh, that last sentence. Now
that they're down, let's kick them a bit.
This is the kind of sentence that drives
homeowners to stand in front of snow
plows and shout at shovelers to go away.
With this kind of "sentence" hanging
over their head, do you think residents
are going to be happy to see the snow
removal contractor pull up to the property next winter?
Now that you know the wrong way to
go about a special assessment, let's look
at a more practical approach.

assessment of $343.25 over three months
(June, July, and August). With the
special assessment over the months of June,
July, and August, the total monthly payment due will be $264.42 ($150 regular
monthly assessment plus $114.42 special
assessment). If anyone should have special
circumstances in which this payment plan
will not work for you, please contact Community Manager Jane Doe to arrange
alternate payments. Please note that we
cannot arrange alternate payments for
everyone and that each case will be evaluated independently.

April 8, 2014

Sincerely,

Dear Homeowners,

Your Board of Directors

Happy Spring! We hope that you are as
excited as we are to see the weather break,
the ﬂowers popping, and those salt buckets
go away.

Now doesn't that sting a little less?
Yes, we still have to special assess the
owners for something that was out of
the control of the association, the management, everyone; however, wording
the letter with more explanation and
sympathy and providing the owners an
expanded timeframe to pay the special
assessment helps ease the pain.
Even though this special assessment is
for significantly less than the scenario in
the first part of this article, the board is
offering owners more time to pay and alternate arrangements, if necessary, showing it has compassion for the situation.
It is important to remember that a
budget is only your best hypothesis of
what will be required for the upcoming
year. No budget is ever perfect. You're
over a little here and under a little there.
Explaining this to the owners helps
them to not feel like the board is "pulling one over" on them. Perhaps hold a
special open meeting of the board and
the owners if the special assessment is

Unfortunately, this winter was not very
kind to us here at ABC Community. Due
to receiving approximately 36 inches of
snow over a period of six winter weather
events. The total cost for the services
rendered by John Smith, snow contractor,
was $67,230. The total amount budgeted
for 2013 for snow removal services was
$50,000. This has left the association short
by $17,230. The board was able to use
$3,500 from the landscaping budget that
was not used to help offset this shortage.
To fund the remaining shortage of
$13,730, the board has no other option
than to special assess all owners within
ABC Community. Each home will be
assessed $343.25. The board recognizes the
financial hardship this may cause to some
of you, and therefore, will be breaking the
48

Condo Media * July 2014

Your board works very diligently each
year to prepare a budget for the next year
keeping in mind the events of the previous
years. We would hope that there is not a
need for a special assessment again in the
future.
Thank you for your understanding of this
unusual, and unfortunate, event.

going to be significant. Invite the snow
contractor to come to answer questions,
have the financials available to review by
owners if they would like, and hold it in
a calming spot (a location such as a local
church has proven to keep a rough situation calm). Finally, be sure to tell the
owners if there's any other options the
board has explored, such as using the
$3,500 savings from landscaping.
We know there may be a time when
your association is facing a tremendous
expense, such as the replacement of
elevators or a prematurely failed roof. If
time allows, begin preparing homeowners as far in advance as possible by newsletters and special meetings. Explain
as clearly as possible what options the
board and management have explored
and why an assessment - of whatever
magnitude - is necessary. Seek input
from homeowners regarding "creative"
payment arrangements and follow up
on suggestions for financing the project
in alternate manners, if they sound
plausible. Homeowners are much more
likely to accept a large special assessment
with quiet resignation if they feel they
had a part in the process.
If possible, make arrangements with
one or two banks to meet with the homeowners and discuss financing options, like
refinancing a mortgage or home equity
loans, and offer special rates for group
participation. Homeowners need to be
reminded that the board members will be
paying the assessment as well, so a sense
of community and cooperation will help
bolster this understanding. CM
Barbara Saxton, CMCA, AMS,
PCAM, is a regional condominium
manager with The Galman Group and
a member and former chair of the CAI
Pennsylvania and Delaware Valley
Chapter Communications Committee.
Rebecca Vorsteg, CMCA, AMS, PCAM,
is a regional director with Associa/MidAtlantic Management Corporation,
AAMC, and is chair of the CAI Pennsylvania and Delaware Valley Chapter
Communications Committee. Reprinted
with permission of the CAI Pennsylvania
and Delaware Valley Chapter.

Condo Media - July 2014

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