Sample Letter to HOA on Special Assessment

Here is a letter a homeowner wrote up and is sharing with others who want to send a letter to the HOA explaining why they are not going to pay the Special Assessment.

August 7, 2009

Green Valley Ranch Homeowners Association

P.O. Box 473038

Aurora, CO 80047

Re: Special Assessment – Certified Letter

I am providing notice that after careful thought, consideration, and research conducted; I will not pay the recent Special Assessment as outlined in the notice I received approximately July 7, 2009. It is apparent based on the July board meeting that the Board members and the HOA President are not familiar with the information contained in the Master Declaration. I am sending you the following excerpts for your review and to support my position.

1. There is not a provision within the Master Declaration for a Special Assessment of this nature rendering the invoice invalid. Please refer to section 2.73 below for additional information:

2.73 Special Assessment. “Special Assessment” shall mean a charge against an Owner and such Owner’s Privately Owned Site representing a portion of the costs to the Master Association for the purpose of funding major capital repairs, maintenance, replacements and Improvements, pursuant to the provisions of Section 8.34 hereof.

2. Section 8.30 of the Master Declaration describes the purpose and application of a Special Assessment and based on the back of the letter which as I recall references legal fees, budget shortfalls, and other unsupported expenses, there is nothing in the Master Declaration which allows for the use of a Special Assessment for the purposes outlined in the invoice. I will be requesting records via the Request for Records form. A provision that I would like to highlight is the section about a Special Assessment requiring a vote of two-thirds of the Delegates. With the number of vacant delegate seats in the HOA, it is difficult for me to understand how you arrived at this level of votes. Reference below:

8.30 Special Assessments for Capital Expenditures. In addition to Common Assessments, the Board of Directors may, subject to the provisions of this Section, levy one (1) or more additional Assessments for the purpose of raising funds, not otherwise provided under the Budget from Common Assessments, to: (a) construct or reconstruct, repair, remodel or replace capital Improvements upon Master Association Properties, including necessary personal property related thereto; (b) add to the Master Association Properties; (c) provide for necessary facilities and equipment to offer the services authorized in this Declaration; or (d) repay any loan made to the Master Association to enable it to perform the duties and functions authorized in this Declaration. Such Assessment shall be known as a “Special Assessment”. The Board of Directors shall not levy Special Assessments without the vote of Delegates representing at least two-thirds (2/3rds) of the voting power residing in the Owners of Privately Owned Sites subject to the Special Assessment. During the Appointment Period, Special Assessments may not be used for the construction of capital improvements without the vote of Delegates representing at least three-fourths (3/4ths) of the voting power residing in the Owners (excluding any voting power of Declarant) of the Privately Owned Sites subject to the Special Assessment. Special Assessments for capital improvements which may be used by all Owners shall be levied solely on the basis of, and in proportion to, the AFCA Units attributable to the Privately Owned Sites of the Owners. Special Assessments for capital improvements relating to a Recreation Cost Center which may not be used by all Owners shall be levied solely against the Owner or group of Owners who own Privately Owned Sites entitled to use such Recreation Cost Center and such Special Assessments shall be levied solely on the basis of, and in proportion to, the RFCA Units attributable to such Sites. The Master Association shall notify Owners in writing of the amount of any special Assessment and of the manner in which, and the dates on which, any such Special Assessment is payable and the Owners shall pay any such Special Assessment in the manner so specified. In the event that the Board shall levy a Special Assessment, the Board shall specify whether the Special Assessment is to provide Public Functions, Recreation Functions or Administrative Functions and the Special Assessment shall be apportioned accordingly.

3. I would like to understand the steps taken by the Board to reduce the existing, unreasonable budget before inappropriately creating a “Special Assessment”. Suggestions below:

* Did you reforecast expenses based on actual from January through June?
o Reduce telephone costs from $13,500 to $3,500 annually
o Office Supplies reforecast based on actual
* Reduce or remove community activities
o Budget $25,000 annually – there is no need to sponsor GVR days, Holiday Festival, or other activities until you can manage within a reasonable budget
* Reduce or discontinue full color newsletter. Publish online newsletter to save expenses. Current budget approximately $50,000
* Remove attorney that does not specialize in HOA and secure the services of an attorney that specializes in HOA laws.
* Remove employment expenses e.g. $9,000 for employee development for 2009
* Discontinue practice of paying to maintain lawns for foreclosed homes. This is the responsibility of the bank and should not be shared by the neighborhood. Result $50,000 savings.

Thank you for your time and review of my concerns. I am enclosing a signed Right to Records Inspection form and appreciate your contacting me at your earliest convenience to schedule time to review and copy all HOA records from September 2008 to current, including the voting records for the Board and delegates beginning with September 2008 so that I can understand how you arrived at a 2/3s vote for this invalid assessment, as well as review of other documents that have been incorporated, during monthly Board meetings.

Respectfully Submitted,

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