We recently had an interesting case that brought real life issues to the forefront of our Reserve Study services.
Every single HOA board has at least one of these owners….the Member who doesn’t want to add one cent to the budget. No matter how many ways the increase might be justified, this person always votes it down.
Understanding the fiduciary obligation of the board member is critical to the Board’s function.
In our recent case, the HOA has not had a reserve study performed in its entire 18-year history. The monthly reserves contribution that was originally approved by DRE 18 years ago had chipped away, with only a portion of that original amount being collected. Needless to say, a lot has happened since 2002, and costs have not gone down!
What hasn’t happened in this particular condominium development was paint – neither interior or exterior- and a myriad of miscellaneous repairs and improvements that had been needed for a very long time.
Ultimately, we recommended a regular increase in monthly reserve contributions, and also an option for a one-time special assessment.
It was only when we met with the HOA Board, went through the Reserve Study component-by-component, and showed the photos to back up our recommendations that we got the attention of the “NO-voter.”
The happy ending was that we were able to assist the HOA Manager in helping the Members understand their fiduciary obligations and the overall financial health of their HOA. The HOA may not be what we call healthy, and won’t be for a while. Though they are at least on the road to better health, and are now a more committed group to reach their goals.
At CBS, we see ourselves as partners with our HOA Managers and Board Members. When situations call for it, we are happy to collaborate with you to reach a desired outcome.