In this week's tip, we take on a complicated question from an HOAleader.com reader of whether to repair an elevator for $5,200 or replace it for $70,000, with the twists of considering higher-floor disabled residents and the absolute lack of budget for
the big spend.
How should this board work through the question?
Let's start by making sure this is clear: As a general rule, this board has the right to make this judgment call as long as it's acting in good faith and doing the proper legwork.
“The board gets to make the decision after reasonable due diligence and inquiry,” says Jasmine F. Hale, CCAL, a partner at Berding & Weil based in Walnut Creek, Calif., who advises condos and HOAs throughout California. “We have a strong policy of the courts deferring to the board's expertise in making these decisions on behalf of the association.
“For instance, this $5,200 fix might last a week, and the board doesn't want to put that money down the drain,” says Hale. “It could be that the board says, ‘We don't have $70,000 so we're forced to do the repair.'
“The answer depends on the facts and circumstances,” she says. “It's not up to the owners, who might say, ‘You have to pay the least amount of money to address this problem.'”