By Deborah Goonan, Independent American Communities
Another threat to affordability of homeownership for Americans: hefty special assessments charged by your homeowners or condominium association.
Owners in Club Monaco Condominium (Denver) recently received an invoice for more than $16,000 per condo unit from their Association. The money is needed to repair outdoor decks and stairways that residents use daily to enter and exit their condos.
It’s yet another example of an Association Governed Residential Community that has failed to set aside adequate money in a reserve account to pay for inevitable long-term repairs.
Club Monaco was constructed in 1980. To put the amount of the special assessment into perspective, a 2-bedroom unit recently sold for $184,000. That indicates that owners at Club Monaco probably have relatively modest household incomes.
According to the report from Fox 31, owners have the option of paying off the assessment in $100 monthly increments. That’s probably easier than coming up with $16,000 in 90 days. However, doing the math, it will take more than 13 years to pay off the entire balance!
And what if another major repair is needed a few years from now? Will there be yet another special assessment? How far can assessments rise until owners are no longer able to afford to pay them?
Here’s the report, with video, so you can see the type of condo construction at Club Monaco.
Note the interview of a Community Associations Institute (CAI) attorney. Do you get the feeling that this “news” report is an attempt at better Public Relations for the industry trade group?
Of course – the usual advice is offered: read your covenants. You “agreed” to pay your fair share to the condo or homeowners’ association when you purchased your home.
Are there still homeowners who don’t realize this basic truth about life in Association Governed Housing? Perhaps there are some who are still completely uninformed.
But, let’s face it, simply reading the covenants before you purchase won’t solve the root problems of Association Governed Housing: poor long-term financial planning and lack of individual control over how your assessment dollars are spent.
Now, I’ll fill you in on some more of the unpleasant details.
Did you realize that you “agree” to pay any amount authorized by the HOA or condo board – limited only if your ByLaws require a membership vote for budget increases or special assessments? Buyer Beware – not all ByLaws give owners veto power over an assessment increase.
Of course, allowing owners to vote on whether to approve a special assessment sometimes has another unfavorable outcome. The majority might vote against an assessment that is needed for essential maintenance such as replacing the roof or major repairs to plumbing. If you happen to live in one of the units with water damage or mold from a leaky roof or plumbing, you will not be very happy if your neighbors vote to delay repairs indefinitely.
That happens very frequently.
Likewise, unless you happen to serve on the board of your association, you will have little, if any, direct control over which repairs are proposed, whether or not your board will diligently seek bids for the best value, and when the work will be completed. If your HOA board or management company makes a bad choice of contractors, it can create even more problems for homeowners.
This blog is chock full of examples of deferred maintenance, non-competitive bidding of contracts, and owners bitterly divided over their money.
Have an example of your own to share? Feel free to comment below.
4 thoughts on “Club Monaco Condos, Denver getting more expensive”
Angela, thank you for sharing your experience. It is not uncommon to hear that the possibility of a special assessment and/or occurence of a prior embezzlement at the association were not disclosed prior to purchase. Some states do require a general statement regarding special assessments, but it is often buried in the fine print. That is why it is advisable for all buyers to work with a real estate attorney representing their interests, to review the documents, answer your questions, and point out any red flags.
I want to point out that single family detached homes lcoated in HOAs (planned communities) can also be hit with special assessments for unfunded maintenance of common property. This can include repairs to storm water basins, dams breached in a flood, shoreline erosion on lakes, resurfacing of private roads, beach access, clean up following a non-covered disaster, etc.
You are correct that owning property without common property and without an HOA does relieve the homeowner of the associated risks and liabilties.
This is frightening. Honestly, I’d probably just walk away from my condo with that kind of special assessment since I’m still underwater in my mortgage from that fabulous real estate bubble years ago. When I bought my condo ten years ago, I honestly had zero idea that special assessments could even be levied. I thought we just paid our monthly fees and that was it. At least with a single family home with no HOA you can budget for emergencies, but with condos you can’t budget for the stupidity and criminality of your board and/or property manager. I found out shortly after I moved in that a previous property manager had stolen most of our reserves years before and that the association hadn’t yet replenished the reserves. None of this, obviously, was disclosed to me prior to purchase.
Hi, Donna. Thanks for sharing your experience. Unfortunately, what you describe happens all too often. I did previously write an article about the RV situation in January 2016, here’s the link: https://independentamericancommunities.com/2016/01/14/mcnary-estates-fountains-hoa-face-fair-housing-lawsuit/
Dear Deborah, Thank you for aggregating this information on homeowner association abuses. I am a recent subscriber to your blog and wanted to share a few items: I live in Oregon and live in a old 1950s HOA — one of those older single family HOAs that were sadly originally created to prevent non-whites from purchasing homes, you can read the sad history here. Interestingly, the Atlantic magazine just published an article on racism in the Portland, Oregon metro area. Although I’m white, I’m originally from New York and am used to more diversity. I was struck with how white it is in Portland and the surrounding suburbs when I moved here in the 1990s. So the Atlantic article rang true for me. Now I am a single parent of a child with autism and own a fixer upper type home (original 1950 steel windows!) in this old 1950s HOA and am often subjected to nuisance fines over the last 10 years that are now mounting into the thousands. It’s exhausting having to deal with it on top of my son’s special education needs but I’m starting to fight back and found your blog during my research. I also wanted to bring your attention to a recent lawsuit in the metro Portland area about another family’s dispute with their HOA over their disabled daughter’s needs. It is really sad.Parents sue homeowners association that wouldn’t let them park RV to help disabled daughter
I will continue with my own fight and will post again to let you know how it is going. Thanks, Donna
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