HOAleader.com - Tip of the Week - August 19, 2016
Published: Fri, 08/19/16
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An Embarrassment of Riches: Who Gets an HOA’s Special Assessment Refund?
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In this week’s tip, we answer a reader’s question about where to send a refund of a special assessment that turned out to be too big to cover the work needed—the new or old owner.
We, however, think the reader should back up and ask another question first: Should the HOA do a refund at all?
Talk to any HOA expert about refunding any amount of a special assessment to owners, and you’re likely to hear an emphatic admonition.
“Never, never, never, never refund,” stresses Robert E. Ducharme, founder of Ducharme Law in Stratham, N.H., who specializes in representing community associations. “I hope I make that clear.
“I’ve never had an association—I’m in my 17th year of advising associations—that ever had enough money in reserves,” adds Ducharme. “They all think they do. But they don’t. I totally understand and get it that if they specially assessed X, people will say, ‘I should be getting my money back!’ But I guarantee that if the board looks at other things, like the roofing, the siding, and the decks, they’ll find a shortfall in those budgets.”
Hal Kyles, a partner at Denver's Orten Cavanagh & Holmes LLC, which represents more than 600 associations in Colorado, also places himself in that camp. “Don’t refund if you don’t have to,” he advises.
“My first comment is that I don’t see this scenario that often,” he notes. “We have clients all the time that do special assessments. That’s obviously a common practice. But I don’t believe I’ve had a client overestimate the amount of money needed and found they have all this money in an account and don’t know what to do with it.”
That said, Kyles says the bigger the discrepancy, the more likely he’d advocate refunding the overage. “Let’s say project was expected to cost $500,000, and it turns out the project came in for half that,” he explains. “Now you’ve substantially changed the circumstances. But these exact numbers from the reader don’t persuade me the HOA should refund the money. That’s about a 25 percent overestimate. I think the association in that case is OK to put that extra $25,000 in a fund, and I’m not even sure they have to notify the owners they’re doing that.
“If it were half?” adds Kyles. “You decide that on a case-by-case basis.”
Your next question should be: If we don’t want to give this money back, can we use it for something other than what we disclosed and planned? Find out the answer to that question—and the reader’s question of who gets any refund—in our new article: http://www.hoaleader.com/members/1419.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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An Embarrassment of Riches: Who Gets an HOA's Special Assessment Refund?
In this week's tip, we answer a reader's question about where to send a refund of a special assessment that turned out to be too big to cover the work needed--the new or old owner. We, however, think the reader should back up and ask another question first: Should the HOA do a refund at all?
Click here to read full article: http://www.hoaleader.com/public/Embarrassment-Riches-Who-Gets-HOAs-Special-Assessment-Refund.cfm
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Refunding An HOA Special Assessment? Wise? Who Gets It?
An HOAleader.com reader asks, "We recently passed a special assessment to repair the dam protecting our association property. We assessed each property (30 lot owners) $3,550 for our anticipated $106,500 project.
Click here to read full article: http://www.hoaleader.com/members/Refunding-HOA-Special-Assessment-Wise-Who-Gets-It.cfm
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The SMART Way to Decide If an Idea Is Right for Your HOA
Do you have a lot of ideas for your HOA but also have a hard time determining which are right for your particular community? Use the long-time management acronym SMART to sort out the ones that are a good fit and that you can actually achieve. That was the advice at a recent HOAleader.com webinar on what it means to run your HOA like a business. It came from one of the panelists, Jane Bolin, the founding member and chief marketing officer of PeytonBolin, a Florida-based law firm focused on community association law.
Click here to read full article: http://www.hoaleader.com/members/SMART-Way-Decide-Idea-Right-for-Your-HOA.cfm
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Tragic Murders Trigger Lawsuit Against Florida HOA
In this week's tip, we weigh whether a Florida HOA is liable for a handyman's murders in one of the HOA's vacant mansions. On Nov. 9, 2014, Gloria Bono, 72, and her son, Michael Bono, 45, were found murdered in a vacant home in the Yacht and Country Club of Stuart, according to TCPalm.com. The police later found Robert Gulick in a local hotel, the victim of an apparent suicide. Law enforcement authorities concluded that Gulick, who was given access to the vacant home to work as a handyman by the home's owner, lured the Bonos there to rob them but ended up killing them.
Click here to read full article: http://www.hoaleader.com/public/Tragic-Murders-Trigger-Lawsuit-Against-Florida-HOA.cfm
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Does an HOA Have a Duty to Give Notice of a Resident's Criminal Record?
Surviving family members are suing a Florida HOA and a homeowner for allowing a handyman with a criminal record to have access to the homeowner's vacant mansion where two people were found murdered. Here we discuss the allegations and ask our experts if an HOA has any duty to prevent criminals from entering the community.
Click here to read full article: http://www.hoaleader.com/members/Does-HOA-Have-Duty-Give-Notice-Residents-Criminal-Record.cfm
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How to Save Money on Every Contract Your HOA Signs
Join us for a must-attend webinar on August 25 on how to develop an effective and easy-to-follow contracting process at your HOA. You'll learn how to avoid the most common mistakes boards make with contracts.
Click here to read full article: http://www.hoaleader.com/products/saving-money-on-hoa-contracts-a.cfm
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