I have no frame of reference here, Donny.
November 15, 2012 7:38 AM Subscribe
How can I get an idea of what typical expenses and reserves are for a condo that has about 12 units and a few garage spaces are? Please help me figure out if my condo's assessment hikes are reasonable.
I own a unit in a condo, but I had to move away out of state and rent it out, so I don't know what's going on there, except for what I hear from my tenants and from emails from the condo association. They raise assessments every year, citing a budget.
However, I can't tell if some of the items in the budget are reasonable or not. For example, they pay $1000 a year for a phone line that connects an intercom at the front door to units' phone numbers and an alarm line. That's as expensive as a data-heavy smart phone bill, which I guess could be typical, but I have no idea. It would be great if I had a reference to which to compare.
The part of the budget I have to most trouble sizing up, however, is the reserve. How much should be there? I've seen some search results say a minimum of 10% of operating expenses, but what is a good, reasonable average? Getting a reserve study done sounds like the answer, but they appear to be expensive, and I'd have to convince the board to do it.
Another confusing aspect of this situation is that whenever I try to discuss the budget with the rest of the condo members over email, board members discourage me and others from doing so, citing that there'll be a meeting at which this it will be discussed. I can't be at this meeting since I live out-of-state, and even if I could, discussing it only at the meeting means there's very little discussion before it is voted on. This makes me suspicious. Is this reasonable of them?
Guidance appreciated! I need something to go on here.
I own a unit in a condo, but I had to move away out of state and rent it out, so I don't know what's going on there, except for what I hear from my tenants and from emails from the condo association. They raise assessments every year, citing a budget.
However, I can't tell if some of the items in the budget are reasonable or not. For example, they pay $1000 a year for a phone line that connects an intercom at the front door to units' phone numbers and an alarm line. That's as expensive as a data-heavy smart phone bill, which I guess could be typical, but I have no idea. It would be great if I had a reference to which to compare.
The part of the budget I have to most trouble sizing up, however, is the reserve. How much should be there? I've seen some search results say a minimum of 10% of operating expenses, but what is a good, reasonable average? Getting a reserve study done sounds like the answer, but they appear to be expensive, and I'd have to convince the board to do it.
Another confusing aspect of this situation is that whenever I try to discuss the budget with the rest of the condo members over email, board members discourage me and others from doing so, citing that there'll be a meeting at which this it will be discussed. I can't be at this meeting since I live out-of-state, and even if I could, discussing it only at the meeting means there's very little discussion before it is voted on. This makes me suspicious. Is this reasonable of them?
Guidance appreciated! I need something to go on here.
I'm on the board of a similar-sized building, we share a gated lot with the row of townhomes next door, but it should be roughly comparable.
1) Our assessments are ~270 a month, and we try to maintain about 40k in reserves, which really helped when we had to replace the roof last year.
2) You should absolutely be able to vote "absentee" or at the very least, designate a proxy to vote for you.
posted by Oktober at 8:24 AM on November 15, 2012
1) Our assessments are ~270 a month, and we try to maintain about 40k in reserves, which really helped when we had to replace the roof last year.
2) You should absolutely be able to vote "absentee" or at the very least, designate a proxy to vote for you.
posted by Oktober at 8:24 AM on November 15, 2012
I was the president of our condo association for 5 years. (Because once you have the job, you can't get anyone to take it over!) Our condo had 20 units.
There are a ton of issues with reserves and budget. The big one was insurance hikes, we were in South Florida and the day I moved in, we lost our insurance (thanks Allstate, you're hands aren't all that good). We had great rates for 30 years and suddenly we had to scramble and get crap insurance at three times the cost.
Reserves. The board decides this and it has to be inline with the law. Our condo didn't want to have reserves, prefering instead to assess for large projects. We had a cushion of a couple thousand dollars, but if we wanted to do a project, like re-surface the walkways, or replace the roof we had to assess.
The board MUST provide you with an annual budget. I prepared the spreadsheet in January for our annual February meeting. We showed line item by line item what we paid in Water, electric, cleaning, blacktop resurfacing and all the other maintenance stuf that went on in the building. Once a resident asked to see the actual bills for a year. I made copies and gave them all to her.
You have a right to know how your HOAs are being spent. Your board can't deny you. You must also be provided an absentee ballot for any items on the agenda that are being put up for a vote.
Start by asking for the Balance Sheet from last year (that way they can't say that it's not available until next year.)
Read your convanants, any activities by the board should be covered in them. If you're being stone walled or not responded to, get a lawyer to write a scary letter.
In the '90s, our monthly assessment was $140. This covered outside the unit stuff. No other benefits for the residents.
The smaller the building, typically the more expensive the HOA fees are per unit because large costs are spread across fewer folks.
posted by Ruthless Bunny at 8:52 AM on November 15, 2012
There are a ton of issues with reserves and budget. The big one was insurance hikes, we were in South Florida and the day I moved in, we lost our insurance (thanks Allstate, you're hands aren't all that good). We had great rates for 30 years and suddenly we had to scramble and get crap insurance at three times the cost.
Reserves. The board decides this and it has to be inline with the law. Our condo didn't want to have reserves, prefering instead to assess for large projects. We had a cushion of a couple thousand dollars, but if we wanted to do a project, like re-surface the walkways, or replace the roof we had to assess.
The board MUST provide you with an annual budget. I prepared the spreadsheet in January for our annual February meeting. We showed line item by line item what we paid in Water, electric, cleaning, blacktop resurfacing and all the other maintenance stuf that went on in the building. Once a resident asked to see the actual bills for a year. I made copies and gave them all to her.
You have a right to know how your HOAs are being spent. Your board can't deny you. You must also be provided an absentee ballot for any items on the agenda that are being put up for a vote.
Start by asking for the Balance Sheet from last year (that way they can't say that it's not available until next year.)
Read your convanants, any activities by the board should be covered in them. If you're being stone walled or not responded to, get a lawyer to write a scary letter.
In the '90s, our monthly assessment was $140. This covered outside the unit stuff. No other benefits for the residents.
The smaller the building, typically the more expensive the HOA fees are per unit because large costs are spread across fewer folks.
posted by Ruthless Bunny at 8:52 AM on November 15, 2012
For example, they pay $1000 a year for a phone line that connects an intercom at the front door to units' phone numbers and an alarm line
I'm the treasurer of a similarly-sized building. That rate is very normal because phone companies decide that you get to pay the "business rate" for any sort of phone system. We end up spending a stupid amount of money on telecom because you need phone lines for the elevator emergency call system as well.
posted by 0xFCAF at 10:22 AM on November 15, 2012 [1 favorite]
I'm the treasurer of a similarly-sized building. That rate is very normal because phone companies decide that you get to pay the "business rate" for any sort of phone system. We end up spending a stupid amount of money on telecom because you need phone lines for the elevator emergency call system as well.
posted by 0xFCAF at 10:22 AM on November 15, 2012 [1 favorite]
It doesn't surprise me that the board doesn't want to discuss these issues via e-mail. E-mail can create lots of drama that doesn't happen with in-person meetings.
Have you tried talking with any of the board members by phone? That might be the easiest way to get the scoop on what's going on.
posted by alms at 6:12 PM on November 15, 2012
Have you tried talking with any of the board members by phone? That might be the easiest way to get the scoop on what's going on.
posted by alms at 6:12 PM on November 15, 2012
This thread is closed to new comments.
posted by sgo at 7:46 AM on November 15, 2012