Special Assessments

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How to Communicate the “News” in the Best Possible Manner
If you have been in the association management business for any length of time, then you most likely have been faced with the need for a special assessment (SPA).  The mere words can send chills down the spine of a manager and board of directors, but many times this process is the most viable and effective method to address capital improvements, significant  repairs or other financial needs.
One of the first steps to take when faced with an SPA is to clearly understand what got the community here in the first place.  Were the reserves underfunded?  Was there a large unexpected expense that happened without warning?  Is the association preparing for a legal battle that will require a “war chest” for legal funding?  Whatever the reason may be, it is vitally important to be able to respond to the “Monday morning quarterbacks” in the community that will want to revel in the “gotcha” mentality.
Secondly, determine how much is needed to be raised via the SPA and be sure not to underestimate the expense.  Nothing could be worse than having a SPA and then realizing that the project, legal battle, capital improvement, etc is going to cost 15 percent more than you budget. Always be conservative and remember, if there is money left over from the SPA, you can always refund the remaining balance to the homeowners!
Thirdly, communicate, communicate, communicate…!!! Town Hall meetings are an invaluable tool to educate the homeowners regarding the need for the SPA.  Whether it is a PowerPoint presentation, sharing of formal bid documents or whatever method is decided, holding several meetings with the homeowners will allow you to enlighten, educate and inform them as to where the money is going.  While there will be the inevitable homeowner discontent and “stones” thrown from the audience, this allows the board to stand up and openly discuss the situation.  While it is now a cliché, the word “transparency” is never more applicable.  Even if less than stellar decision-making was done in the past (and this will come up at the meeting!), acknowledge this fact and move forward.
The bottom line is that whether we live in a community association, or even in our private lives, there will be the unexpected need for funds to address a “surprise” expense, a large repair or an underfunded project (ouch…..how many of us thought that our kitchen remodeling job was only going to be to replace the sink and has now spread to countertops and appliances!)
Special assessments are part of life. It’s better to meet it head on and accept this funding process as a necessary element of a community association.
This article is provided by Somerset Association Management.