In this week's tip, we answer an HOAleader.com reader's question essentially wanting to know if a board must choose a contractor for a project before they ask owners to vote on a special assessment to fund the project.
Or, our reader asks, can the board get several estimates to determine the amount of the assessment and choose a contractor after the assessment proposal is voted on and approved?
Many of our experts have been asked this very question, and sometimes with good reason.
Elina Gilbert, a shareholder at Altitude Community Law in Lakewood, Colo., who has specialized in community association law for 24 years, has been asked this type of question quite often. Technically, boards can't do this, but the state's mandated budgeting process may help boards address challenges with special assessments.
“They want to pass the special assessment, but they don't know how much they need, and they don't know whom they're going to hire,” she explains. “In Colorado, if they're doing a vote by mail, which a lot of times is what happens on a special, the board has to provide owners enough information to make an informed decision on whether to
approve.
“Arguably, if they're not providing this information, they've breached that duty,” says Gilbert. “Whatever special they vote on, I'd argue it might not necessarily be enforceable.
“Sometimes I see boards doing it that way because all the contractors are demanding a huge amount of money up front, and the board wants to impose the special so they have time to collect that up-front payment before they sign the contract,” she explains. “That's usually the biggest
problem, that they don't have the money.