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HOA Special Assessments: How to Communicate Them, Avoid Legal Mistakes, and Decide If Borrowing Is Smarter

• Raymond Dickey

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Special assessments are one of the toughest challenges HOA and condo boards face. In this practical livestream, our panel explains how boards and managers can communicate a special assessment without creating panic, avoid procedural mistakes that often lead to disputes or litigation, and evaluate when borrowing may be the better option. The discussion covers owner communication, governing document requirements, voting procedures, collections, insurance considerations, reserve shortfalls, and lender perspectives.

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CAMICB CEU Video: Please register for CEU Video - Special Assessments - Sell, Structure or Borrow It on Apr 14, 2026 (1 hour video available all day) at:

https://attendee.gotowebinar.com/register/1613926293455377495

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If you are a community association manager, board member, or industry professional looking for guidance on special assessments, association loans, reserve funding, owner communication, fiduciary duty, or major repair funding decisions, this recording provides practical insight on structuring the process, explaining the need, and reducing owner backlash.

PANEL:

Raymond Dickey • www.AssociationHelpNow.com

Deborah Gerelli, CIRMS • Gerelli Insurance Agency, Inc. • deborah@gerelli-insurance.com • www.gerelli-insurance.com

Dawn Becker-Durnin, CIRMS • Acrisure • dbecker-durnin@acrisure.com • www.HOAInsuranceSC.com

John LaGumina, Esq. • The LaGumina Law Firm, PLLC • jlagumina@laguminalaw.com • www.laguminalaw.com

Cynthia Jones, Esq. • Sellers, Ayers, Dortch & Lyons, P.A. • cjones@sellersayers.com • www.sellersayers.com

Thomas Engblom, PhD., PCAM • First Citizens Bank • thomas.engblom@firstcitizens.com • www.bankers.firstcitizens.com

Sean A. O’Connor, Esq., CCAL • Clarkson McAlonis & O’Connor, P.C. • soconnor@cmolawpc.com • www.cmolawpc.com

David Byrne, Esq. • Ansell Grimm & Aaron, PC • dbyrne@ansell.law • www.ansell.law

Cory Kravit, Esq. • Kovitz Shifrin Nesbit • ckravit@ksnlaw.com • www.ksnlaw.com

Hosted by AssociationHelpNow® | Practical insights for managers and boards who live this every day.

This content does not constitute professional advice.

#HOA #CondoAssociation #SpecialAssessments #HOABoard #PropertyManagement #CommunityAssociations #ReserveFunding #AssociationLoans #CondoBoard #HOALaw #CondoLaw #BoardGovernance #CapitalProjects #HOAManagers #FiduciaryDuty

SPEAKER_06

Thank you so much for being here today. Today we are going to talk about special assessments, not only about the legalities of it, but I think we're going to talk a lot about how to sell it to your membership because I think that is important. How to sell it to the owners, how to structure it, and whether you should just maybe borrow the money. And we have a great panel to get us there today. Before I go any further, everybody, we do the CUs differently now. You should be using your question feature or your chat feature. Just use that and say, hey, Ray, I need CUs. That's all you need to do. Put I need CEUs. And that way I will make sure that you get them. If you're here for Florida or Illinois by any chance, just make a note of that, even though I know what state you came from. But use that question feature today, not only to tell me about the CUs, but I love comments and I love questions. Yesterday we had a great segment because people asked a lot of questions. It was actually a lot of fun, and I really enjoyed it, and I really do appreciate those questions and comments. I don't use anybody's names. I will relay the questions for you, so feel free to ask whatever you like. Be a little bit careful though, because you never know when I could slip up and maybe give your name out. But I've never done it so far. Before I have the panel jump on, what did I do with my piece of paper? If you're interested, um, I'm actually interviewing Michelle Baldri. I didn't put on a schedule at two o'clock. I don't know if you got reserve questions, it's not gonna be an hour. Let me know. Send me, use the question feature and say, Ray, I'm interested. I'll send you the link for reserve studies. Then we're back at four o'clock. HOA governance through a feminist theory lens. We're gonna have a lot of fun with that. Dawn is gonna be there, and Dave is gonna be there. And I took comparisons so people could learn two things at once. Dave Byrne, in particular, was super excited about this program. He's been pushing it for years. He loves feminist theory. It was his major in college. So no, none of that is true, but still, Dave will be there anyway. But it's gonna be a fun segment. Okay, with that being said, let's have our panel introduce themselves with who I see first, and that is Sean.

SPEAKER_01

Good morning. My name is Sean O'Connor. I'm an attorney. I'm a shareholder with the law firm of Clarkson McAllenus and O'Connor in Mount Pleasant, South Carolina. We have a full service uh law practice focused uh exclusively on community associations. We represent associations all across South Carolina with a full service law practice. Um I am particularly active in our uh South Carolina chapter of CAI. I'm a past president of the chapter, have also uh served on the Legislative Action Committee in years past and currently on the Blue Ribbon Committee. And uh as of late last year, I am now a CCAW fellow. Plus, you play hockey. I do.

SPEAKER_06

You're very busy. Uh Deb.

SPEAKER_09

Good morning, everyone. Deborah Jarelli. I'm with Jarelli Insurance Agency in New York. We have a department that specializes in community associations. I am on the New York LAC, and I have my CERMS designation from CAI National.

SPEAKER_06

Good to be here. Awesome. Thanks for being here. By the way, Sean, a lot of people congratulating you. That's very nice, audience. Thank you. Uh John Hello everyone.

SPEAKER_04

John Legumina from the Legumina Law Firm in Purchase, New York. We represent condominiums, co-ops, and HOAs from New York City throughout the Hudson Valley areas.

SPEAKER_06

John, question from the audience Is anything going on with your Italian villa right now?

SPEAKER_04

Um yeah, it's it's in need of significant repair. I was there recently.

SPEAKER_06

It's funny what the audience remembers. Uh Dawn.

SPEAKER_07

Hi everyone, my name is Dawn Becker Dernan, and just like Deb, I'm also a CERMS. My practice is insurance on behalf of community associations. Across a national insurance agency, and we provide not only property and casualty but employee benefits and other types of insurance.

SPEAKER_06

Thank you very much. I'm happy to be here. It's always a treat to have you, Cynthia. Thank you for being here.

SPEAKER_08

Hi everybody, I'm Cynthia Jones. I'm with Sellers, Airs, Dortch, and Lions. We are in Charlotte, North Carolina. I am licensed in North and South Carolina. Uh, like Sean, we are a full service law firm for community associations. Uh, Sean deserves a lot of congratulations. That Cal is very hard to get. So, congratulations, Sean. And John, I'm super jealous I don't have an Italian villa, people are asking me about.

SPEAKER_06

So Justin, for John's sake, is he's a I joker, man. It's it's debatable if he really has one. I I at some point I heard he had something going on there. I don't know if it's even true anymore, but whatever. Uh, do you guys have uh a special tattoo? CCAL's by any chance that you get like a limited.

SPEAKER_08

No, we don't talk about that.

SPEAKER_06

Oh, okay.

SPEAKER_08

Just wanted to ask no special tattoos.

SPEAKER_03

All right. Uh Dr. Ingblum. Hi, good morning. My name is Tom Ingbloom. I'm with Percisms Bank, cover many states. We do lending live bats, and I'm calling from beautiful Nanceville Airport on my way to DC today.

SPEAKER_06

You know, the panel was saying sometimes I'm mean to Tom. You know, I know Tom pretty well, and I think Tom is like one of the best people I know, just to be clear about that. And he's also one of the most intelligent, and he actually speaks around the entire country. But now I will go back to giving my hard time for the rest of the session. But with uh Dave Byrne.

SPEAKER_05

Good morning, everybody. My name is Dave Byrne. I'm the chairperson of my law firm's community association practice. I represent associations in New Jersey, New York, and Pennsylvania.

SPEAKER_06

And Corey.

SPEAKER_02

Good morning, everyone. I'm a retired amateur hockey player uh and an attorney. Um our firm, Corbett Schiffer Nesbit. I'm the managing principal of the Florida office, located in Boca Ratone, Florida. We represent community associations all over Florida, Illinois, Wisconsin, and Indiana.

SPEAKER_06

Okay. And we have lost Sean O'Connor, so I don't know if he will be back. Uh, Cynthia, if he does not come back, if you could cover South Carolina, you are also licensed there. I would appreciate that. Thank you so much. Special assessments. So I thought I would come up with some reasons for a special assessment and fly through the panel and see what they think about it. And here are some of the reasons. Result of a past decision or a present crisis. I'll stick with the lawyers on this. John, what do you think? Which one is the most common? Is it the result of a past past decision or a present crisis?

SPEAKER_04

It should be a present crisis because it's supposed to be for something that's not anticipated. If it's anticipated, it should be in your budget.

SPEAKER_06

Okay. So Cynthia, John said it should be, but is it always?

SPEAKER_08

Well, no, I mean that's the issue, right? Usually the past decision is we don't want to raise assessments, but they need to be raising assessments to cover their expenses. So it's sometimes unfortunately a combination of we've left assessments where they are, even though our expenses have gone up. And so now we're in dire need of some money and we have to get it quickly.

SPEAKER_06

Dave, what do you think?

SPEAKER_05

I agree with John. Uh I think it's um it's supposed to be something that you learn, you learn about, comes up, not anticipated.

SPEAKER_06

Corey, you agree with the rest of the panel?

SPEAKER_09

I do.

SPEAKER_06

Now, Tom, you are in the lending business, so you would know this one also. What do you think?

SPEAKER_03

Uh I agree on the the concept, it it being uh evolving and something more complicated than the time progressive, but yes, I agree.

SPEAKER_06

Okay, excellent. It could be the fastest way to create litigation. It's not the assessment itself that creates the litigation, it's poor process. I'll start with John on this. John, do you agree?

SPEAKER_04

Repeat that again.

SPEAKER_06

It's the fastest way to create litigation, but it's not the assessment itself that causes the problem. It's the actual process that the board uses to make it happen.

SPEAKER_04

Okay, so may I think they're getting at um uh what I'll call a quote unquote surprise assessment. So yeah, you don't you don't want to say in January or January 20th that uh February 1st, you know, we have the special assessment uh without warning because that that will I'm not saying that's gonna lead to litigation, but that um won't there'll be people that are upset with that. So uh yeah it I think it's important to be um you know to to to give fair warning and explanation before you impose the assessment.

SPEAKER_06

Okay. I don't want to dive too deep, Cynthia, but do you agree? Is it the actual assessment that becomes litigation, or is it the fact that boards don't go about it the right way sometimes?

SPEAKER_08

Yeah, I mean, I think John makes a great point. If they're surprised by the vote that they have to do on the special assessment because they didn't know it was coming, that's that's not a great that's not great optics for the association. I think also sometimes what I see is procedurally most associations have to get this voted on by their membership. So if they don't follow that process correctly, somebody who is upset about the special assessment is gonna use that to try and challenge it.

SPEAKER_06

Okay, I'm gonna jump to something else for Dave and Corey. You can always backtrack if you want to. Sean, you're okay right now, but if we keep losing you, I'm just gonna have you jump off, okay? Because it it's I think I'm good. Okay, thank you. Um, legal checkpoints. I don't want to spend the whole session on the legal aspects of it because we want to talk about selling it and some of the other aspects. I'm gonna start with Dave on this common procedural mistakes. Um, I'm gonna throw one at you here, Dave. Voting improperly, you want to jump on that or you want to go to something else?

SPEAKER_05

Well, uh yeah, it that's particularly uh particularly connected to New Jersey, where we have a statute uh recently amended to make it even more um clear or onerous, depending on how you look at it. Um but uh the basically the New Jersey statute is that every decision a board makes, except maybe something relating to litigation uh or like employment um uh discipline, things like that, uh has to be done at an open meeting, at a board meeting open to attendance of owners followed following seven days' notice unless there's an emergency, in which case you can do it right away. So all kinds of rigorous things that our bureaucrats have come up with. Um and a lot of boards um get tripped up on that alone, meaning the subject of the vote is almost always appropriate. But frankly, associations in New Jersey almost always ignore that because until somebody calls them on it, they have no idea, no way to know even know it exists.

SPEAKER_06

Okay, so attorneys, I'm gonna jump to the next one, but by all means go backwards. Okay, and I have like five of them here, so I'm sure you guys are gonna want to add some onto there. And I'll review them with you one more time at the very end so you don't have to try to remember which ones we went over. Uh, the next one I have, Corey, is failing to document deliberation.

SPEAKER_02

Accurate? Yeah, it's very accurate because you know, if a vote is taken at a board meeting and there's no minutes to reflect that, um, then that can be uh a pretty easy defense to someone who doesn't want to pay the special assessment that the vote wasn't properly taken and the document or it wasn't properly noticed, the notice for the meeting. Um, there's all sorts of pitfalls, and so that's why we always recommend if you're gonna partake in uh in passing a special assessment, check with your attorney first to make sure the process is being followed.

SPEAKER_06

So, Sean, poorly drafted resolutions.

SPEAKER_01

Yeah, I mean you're you're opening the door to uh problems by you know, first of all, it's gonna create miscommunication where the owners that are being asked to vote on this are voting on something that might be stated differently than what is actually being sought to be done. And it also uh could indicate that that there's a you know a disconnect between what what is authorized and and and what the board is is really trying to do. I mean that you know from things from you know which elements are are subject to uh you know repair under the reserve account or or via special assessment. And and so anyway, yeah, that's that's another thing. Like Corey said, uh a resolution for something as significant as a large special assessment is certainly something that should be reviewed by legal counsel and make sure that that resolution is is properly worded.

SPEAKER_06

So, John, how about inconsistent payment options? Is that one that belongs up there?

SPEAKER_04

Yeah, the so um don't don't leave it loosey-goosey, don't have too many alternatives and options. Um it has to be fixed concrete amounts and dates, otherwise it's how are you gonna enforce it? Um but just jumping back a little bit, New York might be a little bit different from some of these other states I'm hearing. It's uh the default is usually the almost every board has the authority to adopt a special assessment without needing a unit owner vote. Um, but again, proper resolutions uh don't don't just vote by email because actually that's not really a valid vote in New York. Um and if you have properly drafted resolutions from your attorney, that will go a long way to um making it bulletproof if someone wants to bring a lawsuit.

SPEAKER_06

All right, and Cynthia, the last one I had, and I I made a note of this because every one of you attorneys, you mentioned communication, communication, communication, skipping owner communication before formal action.

SPEAKER_08

Yeah, I mean, it just that just gonna upset your owners. I mean, that's all that's gonna do. Keep it open dialogue with your owners, let them know it's coming. It's a huge, it's gonna be a bad meeting if they're surprised by a vote on a large special assessment that they don't know anything about.

SPEAKER_06

So, audience, this is a really good session. Learning how to sell a special assessment, I think, is a great thing to talk about and to think about. Um, so really quick attorneys, voting improperly, failing to document, poorly drafted resolutions, inconsistent payment options, skipping owner communication. Very quickly, Sean, did we skip anything?

SPEAKER_01

No, I mean it's it's the the the idea is is you got to start early on this. I mean, all this planning should begin months before it's presented to the ownership.

SPEAKER_06

Let me get to it. Yeah, John, did we skip anything? Cynthia, Dave, Corey, anybody?

SPEAKER_08

You think I just want to say, like, not just inconsistent payment options, but making sure you're charging the assessment like your documents allow you to. Don't try and charge it a different way. That's gonna be a bad thing.

SPEAKER_06

Why would somebody do that, Cynthia?

SPEAKER_08

Well, you're not paying attention to what's in their documents.

SPEAKER_04

Yeah, so so she makes a good point because if it's a condo in New York, it has to be done by percentage of common interest. And often uh, you know, depends on the property, but they may want to do it equally, and and you can't do that.

SPEAKER_06

Don't you think it's safe to say, Dave, if you use an attorney, you're not gonna have a problem with this for the most part? I mean, that's what attorneys do, right?

SPEAKER_05

I I mean, I guess I could try to be funny and say if you gotta assuming you hire the right one. Yeah, but this should be an attorney with uh who purports to specialize in representation of HOAs and condominiums and cooperatives, should have the base element to know the four or five quick things to look at, you know. Um, and trouble spots should jump out pretty quickly, both from training but also just through anecdotal experience. Most of my clients forget this, most of my clients forget that. Sometimes developers put this stupid provision in the wrong place. So lawyer, you know, a client may go into a uh set of bylaws or uh and look for the provision on how to do an assessment, knowing that it's usually in the in the section that's entitled assessments, and then they don't realize that the developer might have put a provision in some other provision in some other place that they didn't look in. Uh lawyers are supposed to sort of have the experience and knowledge to get a feel for whether or not there's other places you should that that that should be reviewed.

SPEAKER_06

And don't use ChatGPT for that. We just did that yesterday. Okay. Uh really quick, yeah. But do you find have you had to handle any insurance claims related to special assessments?

SPEAKER_09

Um, of course. Um, but for insurance, we talk about special assessments, I think, a little differently, right? They have to do with um covered perils that have occurred. So a claim has occurred and they don't they have a shortfall that they're charging back to the unit owners. Um, because then there's also special assessments for maintenance, which isn't an insurance issue, but we have seen DO claims with regard to um people upset that they're being charged special assessments for maintenance.

SPEAKER_06

And I I apologize, I asked the question a little bit wrong there. Dawn, have you seen any um special assessment litigation where people are suing the association in regard to the special assessments? Is this I know discrimination is a big one. How about special assessments? Does it do boards need to be extra careful about this one? Absolutely.

SPEAKER_07

In fact, what Deb and I do a lot of times before we even bring a client into our practice is to review financials, not just to determine the crime infidelity limit, but to see what their health is, because that is an indication whether there is potential for litigation, including uh delinquency rates as well as liens and foreclosures. So all of the items that were listed before the voting, the um resolutions, all of that can contribute to why someone would litigate in the event of a special assessment. And sometimes the bottom line is people will use that as a stalling factor in order not to pay.

SPEAKER_06

All right. So, Tom, get everybody excited about the importance of selling the special assessment. I mean, I think it should be like a story that should start as soon as the board knows it may be coming up. What do you think?

SPEAKER_03

I agree. I think it's very important and lay that foundation and get ready for it.

SPEAKER_06

I um don't like to use my board too much as an example, but I would say we had a huge special assessment here. We have quite a few. I think they've done an excellent job of telling a story beforehand. And this is um why this kind of topic was important to me because I was just so impressed with the job that they did. They started months and months in advance, kind of educating that we had these problems, right? We had these engineering aspects. And they would talk about it a little. They did talk about assessments, and they gradually got us there. And it wasn't an act of dishonesty or anything, it was an act of communication in bits in a process that I thought worked out really well for the community. Um, so let's this, I feel like this is an important subject. So I will start with Cynthia and go the other way around if I if I mess up. Pre-announcement communication. I I have about nine parts of this, Cynthia, but do you think that's where we should be starting?

SPEAKER_08

Oh, absolutely. As early as possible, you should be starting this talk. And I love what you said. You know, it doesn't necessarily have to start with a, okay, everybody, we're assessing a hundred thousand dollar special assessment. It starts at the very beginning. Okay, we've had a reserve study or we had an engineer evaluate this, these are the things we're seeing, and moving forward from there, very important.

SPEAKER_06

And transparency, um, Dave, I thought was important in this also. I thought they did a good job of that.

SPEAKER_05

Yeah, I thought so too. I think that um, no, I think that um I I'm resistant sometimes into into dealing with that issue because that to me is more like a political kind of thing where my job is to tell boards how to legally effectuate something and not necessarily, well, you should have an open forum or a web page or something. I mean it's um I don't know, I sort of focus more on the on the former, not the latter.

SPEAKER_06

You know, Corey, it was totally a political situation, and they would invite um, but not in a bad way. They invited engineers here, they invited other people that would could educate the community and the community could ask questions. It was 100% political. Is being political wrong?

SPEAKER_02

No, it's part of the process. Um, and I and I think what Dave was trying to get at was, you know, as as legal counsel, we counsel on the legal aspects. Um, you know, how how to um you know frame it politically is is not technically our job. Um, however, you know, in representing association associations, we've seen that the better explain the process, the more people. Will come on board. You identify the issue, you you share the panel of experts, the engineers, the contractors, whoever, um, who are who are tasked to fix the issue, share their bids, explain the cost, um, and then at that point you figure out how you're gonna pay for it through special assessments, loans, loans paid through special assessments, uh, or if there's reserves or leftover cash from previous years. And um as as long as you know, as long as they understand the process and you're not starting out with, you know, here's a bill. Um, some you know, people are more prone to uh, you know, be uh be willing to pay it.

SPEAKER_06

And audience, we're gonna talk about whether you should borrow the money or do a special assessment. So we're definitely gonna hit. I'm gonna skip show multiple financial scenarios. I'm gonna go back to Tom on that one. Explain consequences of doing nothing. Uh, John, that was a big part of what they did also. Um, they clearly outlined that you have to fix these things or A is gonna happen or B is gonna happen.

SPEAKER_04

Yeah, I I so I think that the this is a really critical issue in New York is uh we don't have the money for that. Um and just you know, my response is um if you're in court they don't and it's an accident or something um devastating that happens, that's not a defense that you you know we didn't have the money. You have the ability to come up with the money with with the special assessment process. Um so there there is no defense to um for everyone here is on a fixed income. That that's not a defense. So you you need to take your you know your long-term repairs and your short-term emergency repairs seriously, and you not having the money is not a defense.

SPEAKER_06

Correct. Um, well, you know it's correct, but the reason I'm mentioning that is that's the legal aspects. Um, one thing I like that they did also is they didn't throw it out there where we have to do this. We, we, we. They did a great job of why, why, why first before they started getting out there and saying, we have to do it and you're gonna have to put up with it and things like that. And you know, Sean, the last one I have is separate a motion from fiduciary obligation, I think, which is John kind of brought up, which was a great segue. But I will tell you, it was rough on the board anyway, though. I don't don't sit back and think everybody was like, this is terrific. They were immediately accused of this being all their fault. You know, it was it was a rough process, it did not go easy. But they separating a motion from fiduciary obligation, it was almost impossible in some aspects, but I thought it was critical. What do you think about that?

SPEAKER_01

Yeah, I mean, it it it really comes down to dollars and cents. And and the way that it really resonates with most homeowners is to help them understand how it affects them directly. And the ways that it affects them directly is that it can significantly you know decrease their property value. It can make it so that um lenders shy away from or or simply will not you know make loans uh for people to purchase uh those units, and it might make it impossible to get insurance. And so these are things that are potentially catastrophic. And and it become, you know, you you lay out a case like that, it becomes harder and harder for any reasonable person to uh dispute it or deny it, you know.

SPEAKER_06

Deb and dawn, can you make a note of that about the insurance? Because I do not think I have that as one of my talking points. So if you guys can remind me about that, I would appreciate it. Really quick, someone from the audience wrote in, I had, and I am skipping some questions, so I'll try to get to them, audience. I had an association invite a local well-known realtor to do their info meeting and explain the potential benefits of property values for getting work done and the potential negative impact of values if the work was not done. I don't know. I think that sounds absolutely terrific. Anyone on the panel have uh any concern about that? I mean, I think it sounds a great way. People definitely want their property values. So, really quick, avoid blame, avoid panic language. Panel, anybody got an idea of what a panic language would be? Uh I'm throwing you on the spot here. Cynthia, anything? I'm trying to think of something off the top of my head. Sky's falling. Yeah.

SPEAKER_08

Yeah. I mean, you know, uh, we're gonna have to shut down the building if we don't have this repaired in the next 30 days, something like that. I mean, that would be a pretty serious issue, but it's possible.

SPEAKER_06

I gotta admit, I'm a little I'm a little on the fence on that one because they did use some panic language. And I thought that also worked out well. Um, anybody on the panel think I'm I'm wrong on that? Okay. But they were careful. Um, they didn't want to make it sound like the building was a piece of junk and it was gonna collapse. Avoid minimizing the issue and also avoid surprises. Excellent, excellent. Okay, so Tom, we're gonna go and well, you know, Tom, you've been involved with a lot of special assessments, right? Really quick, any other talking points do you think that should have been hit in regard to selling it?

SPEAKER_03

No, everything that was discussed or talked about, I think tried on. Get everyone involved, communicate properly, and be an open book.

SPEAKER_06

Okay, so someone has watched a previous live stream, so I appreciate it so much. And they were asking me one time, Ray, you had mentioned about the importance of public relations. Well, that was like my opinion. Um, I'm gonna start with Corey on this and go the other way around. You know, Corey, sometimes boards can't communicate well. And if you're gonna have a multi-million dollar special assessment, is it wrong to maybe think about having somebody help out with the story plan?

SPEAKER_02

No, I don't think it's wrong. Um, it's gonna save you a headache. Uh, remember you're a volunteer on the board. Um, and if everyone's calling you and sending you emails, uh complaining because they don't understand or they've heard rumors about a special assessment, uh, and you have a day job, you're not gonna get your work done because you're gonna be dealing with HOA business all day. So uh communication is key. If you need help with it, um, it's it's probably worthwhile.

SPEAKER_06

You know, Don, I could go to you on this one before I kind of drop it here. I think boards overassume their ability to communicate well, and um also they just don't want to admit the fact that they can't do it. And let's you know, if you have a marketing background or something, you may be good at that, but it's it's very common for a board to be terrible at it and not realize it. And I think it could have disastrous effects. Do you agree?

SPEAKER_07

I do agree, and I think that a lot of people are very worried about how they're going to be uh the opinion of their neighbors will be and whether they're going to be harassed at home. And a lot of people want to keep it close to the best. And to be very frank with you, because volunteers are not professionals, it can be a very difficult situation for them to even tackle. And because it's not a full-time job, the lack of um participation or availability sometimes, timing of it all can further exasperate the issue.

SPEAKER_06

All right, Tom, I'm gonna put the attorneys on the spot here. I have no idea what they're gonna answer. What do you think they're gonna say, Tom, if I ask them if they think it's appropriate to ask the attorney how to sell a special assessment? Because I would imagine attorneys have seen this process, but they're not there, like Dave said, and I don't blame them. They're there for legal work, not public relations. But what do you think our attorneys are gonna say? And what do you think about that?

SPEAKER_03

Half are gonna say they should be involved, the other half are gonna say no. All right, let's I I personally think they should be involved.

SPEAKER_06

Okay, and do you think I'm gonna ask them, do you think the board should be willing to pay for that?

SPEAKER_00

Yes.

SPEAKER_06

Okay, interesting. That's a different aspect. I did not think Deb, what do you think the attorneys are gonna say?

SPEAKER_09

I'm gonna say that they should definitely be involved in the process, but I don't know about the selling of it.

SPEAKER_06

Okay, I meant as far as selling goes, helping the board tell a story. Basically, but they're getting out. I'm I'm admitting if they're getting outside the legal aspects, they're getting more into public relations, but they may or may not know. Dawn, really quick, what do you think before we we poll them?

SPEAKER_07

I I think it's gonna be a mixed back, primarily because it tends, right? Um is it a situation that involved a potential legal matter or could evolve? It's very delicate, it's precarious, all the other factors. Sorry about that.

SPEAKER_06

That's okay. All right, so let's take that all away from them so we really put them on the spot. And let's start with Corey. Corey, really, let's do this one quick. What do you think? Are you comfortable with that?

SPEAKER_02

I I I I I like being involved. Um, I think it goes a lot smoother. Um, but I also understand that you know our primary job is is to give the legal guidance. Um, but from from experience, like you said, I think it goes much smoother.

SPEAKER_05

Dave. Um, I I I think Don's use the word delicate is apt. Uh I I when when these things come up for me, I try to get the boards to tell me ahead of time, like what it's their community, what works best for your community. You know, sometimes when a lawyer stands up and does all the talking, it's obnoxious. Uh and it shows weakness on the part of board members. Uh sometimes when the lawyer is not talking and a board member's talking, uh, it shows the board's not prepared and hasn't you know relied on professionals. It's very, very delicate. But ultimately, I think I think it's it's usually better for lawyers to be more actively involved than than less actively involved. But I don't think board should automatically assume that lawyers need to talk and do stuff. And I see this like even in like letters, right? Well, you know, a board will say off topic, we want to make a change with our with X company, we need you to send a letter. Like, why does a lawyer have to send a letter? Do you are you planning on suing these people? Like, why does a lawyer have to be involved? It just raises all kinds of weird dynamics. So I think boards have to be sensitive to that.

SPEAKER_06

You know, Cynthia, let me let me let me uh be clear in the situation that I don't want the lawyer to do the talking. I want the lawyer to help the board formulate a public relations plan and change my wording if you need to, Cynthia. Do you think that's appropriate for a lawyer?

SPEAKER_08

Yeah, I do it all the time, right? I'm an advisor for the nonprofit communities that I'm that I work with. If they send me a special assessment meeting notice to review, absolutely I go through it and help soften that language or give them some guidance on tips that I have seen be successful at other meetings that I've been to. And I think that just makes us look like a team, right? Like I'm not having to take it over, but I'm standing beside them and I'm there for that guidance if they need it. Uh, but yeah, I do that all the time.

SPEAKER_06

So, John, I'm talking about like, hey, at this meeting you start talking about this, and at the next meeting you talk about that, and you come up with a whole game plan. Is that something you feel a board should be comfortable asking and paying an attorney for?

SPEAKER_04

Yeah, so uh I I agree with what Tom initially said. Uh it you shouldn't, I think an attorney could help. Um Cynthia just mentioned it. Um we, you know, yeah, we you didn't go to law school to figure out how to write special assessment notices, but we we often have um experience doing it and and probably could really assist in in the process. But um you also want to double check the governing documents to make sure you're not you're not doing something that violates a governing document. So having having attorney involvement is good. How deep you go, I I agree with the other comments too. You don't really you really you should rely more on your property manager than your attorney to for that.

SPEAKER_06

Yeah, you know, I was thinking about the property manager, Sean, but you know, sometimes they're not qualified for it either. Um, you know, they're not not every property manager is a public relations expert. But Sean, let wrap us up here. Commentary.

SPEAKER_01

Yeah, I mean, most attorneys that have been doing this kind of work for a while have guided communities through this process and so can bring that experience and perspective and and and value to uh guiding helping their client get across the finish line. And you know, that's at the end of the day, that's one of the things we're good at or supposed to be good at is persuasive communication and helping people see complex issues and boiling them down so that they're easier to understand and more straightforward. So absolutely it's something that the attorney should be involved in. Now, having said that, I've seen clients hire a professional uh PR firm for special assessments, and and depending on how big of a community it is and how big the issue is, I'm not saying that's not a bad idea either, but most of the time that's what people expect from their attorney. That's what they're paying for, so that's what they ought to get.

SPEAKER_06

As an owner, for me, I would not be against the association hiring a public relations firm to educate the me properly, meaning I don't want my time wasted, right? To have a bunch of board members up there that just don't know how to communicate it. If they want to pay someone who can communicate it honestly, I'm all for it and paying for it within reason. And whatever I want should be the most important thing, Cynthia, in the entire world.

SPEAKER_08

Everybody knows of course, right? We all know that, right?

SPEAKER_06

Okay. With that being said, let's talk about whether you should be borrowing money or doing special assessments, or maybe they're the same thing. I realize that I may not know. Tom, situations where loans make sense. I have about five talking points here. Do you want me to fly through them really quick and then you can run with it? Okay, large capital projects, roof replacements, and high-rise buildings, multi-phase infrastructure, disaster deductible spikes in communities with high delinquency rates. Why, you know, this is my research. It doesn't mean anything. Why is that stuff there? Does it make any sense?

SPEAKER_03

It makes sense. First of all, if they have a high delinquency rate, say over 10% of the total number of units, they're not going to get a loan. No bank will give them a loan for that. Uh, if you have an emergency disaster, uh, typically uh an association won't give a loan, they may give a line of credit for that. Um, we always hold on a second, Tom.

SPEAKER_06

I just want to make sure I understand what you're saying. So I have these down, I don't want to confuse the audience and misrepresent information here. I have this down in a situation where loans make sense, but you're telling me it's the opposite, correct?

SPEAKER_03

For this is 100% wrong. No, no, no. For those particular two, it's just not going to be conducive for the association to get a loan if they have a high delinquency list, it just won't happen. Because how are you going to pay that money back? That's ultimately what it comes back to. And typically, most banks have a threshold of 10% of the total number of units, 60 days or more. So if you're coming in there with a 20% delinquency, a bank isn't gonna give you a loan for that.

SPEAKER_06

See audience, why you should never just take your information off. That's what I always say all the time, because that's where I like to get my stuff, and I like to do it that way so people see also. And you also said, Tom, disaster spikes, and I'll go to the insurance people on that. That's also not a good reason to get a loan.

SPEAKER_03

No, I mean, uh, we get called all the time. Can you can you uh provide a loan for our insurance? Insurance is part of an operating expense, no different than a disaster. You're not gonna be able to get a loan for a disaster that comes up. You have to plan for it and go through the communication cycle that we went through previously that we talked about.

SPEAKER_06

Okay, let me jump back to you, Tom. Let me jump to Deb really quick on this point and then Dawn. Deb Tom mentioned disaster deductible spikes, not a good reason to get a loan. Um, what do you commentary?

SPEAKER_09

Uh yeah, I mean, we are seeing an increase in insurance premiums and increase in insurance deductibles. And as far as I know, banks are not willing to um provide loans for that. Um, here in my office, we do finance agreements through a finance company to help them, but then they're being charged finance charges. But no, banks are not loaning money to associations who don't have proper funding to handle these increase in deductibles or premiums.

SPEAKER_06

All right, so Don, these are two scary ones then for associations in particular.

SPEAKER_07

Yeah, now to speak to disasters, I think the other aspect is that from the homeowner perspective, not understanding that their homeowner's insurance or HO6 coverage may be applicable to some of these common assessments that occur. So not reaching into your actual pockets, but having a discussion with your homeowner's carrier is really important. And then communities with high delinquency rates, very upfront, they're just such a poor risk ultimately for even insurance care. They're more apt to have a claim because of unfavorable conditions that are currently in existence. So carriers may put higher deductibles because it's almost of a, you know, we don't want to provide insurance, but we have to, and and this is where we're at. So the more important factor is for what are they working towards? We want to know, Deb and I want to know a story of how are they going to fix this? What is their communication moving forward? Are they not going to fix it? Because if not, I mean, ultimately, that's just gonna be a situation with a special assessment that's probably gonna lead to litigation.

SPEAKER_06

Okay. So attorneys, but so these two are off. And before I go back to Tom, really quick, if there's no commentary, that's great too, because we've got 20 minutes left. But really quick, Sean, any commentary in regard to the the commentary we've heard about disasters not being good for loans, uh, deductible increases and high delinquency. Sean, any commentary? John, Cynthia, Dave, or Corey? Any legal aspects? Okay. Tom, are any of these right? Okay. Situations where loans make sense, large capital projects. What do you think about that one?

SPEAKER_03

Well, I think loans make sense all the time. So loans capital project, I mean, do you want to write a check today or do you want to have it amortized over 10 or 15 years? That's the whole benefit of a loan, spreading it out over time for the unit owners. You know, you pay $25,000 up front, or you're gonna pay $200 a month for the next 10 or 15 years. That's a true advantage of a loan.

SPEAKER_06

How about roof replacements and high-rise buildings? I don't know why that's on there, but it is.

SPEAKER_03

Um, it varies depending on the geographical location of the association.

SPEAKER_06

And then last what infrastructure repairs would be the same as roof replacement, right?

SPEAKER_03

Correct. I mean infra. It could be plumbing. Um, just hit a huge loan in Chicago, um, $14 million to replace your risers. That's infrastructure. What about elevators? You go down the list of what needs to be done.

SPEAKER_06

So for loan factors, Tom, I had owner affordability, impact on resale, loan convention. I can't pronounce that. What is that? Convenient restrictions? Confidence. Sorry, I think and then impact on future boards, total cost of capital. I'm gonna go to the lawyers on this one. Man, I don't should these play a role in whether or not you take a loan? Tom, from the finance part?

SPEAKER_03

Definitely. I mean, it's it's on, you know, if if an association comes and they're gonna have to pay that loan back, how are they gonna pay back? Well, they're gonna have to special assess. Well, if everybody's gonna be special assessed a hundred thousand dollars and the units are only worth 80, a bank is gonna have a problem with that because people can walk away from their mortgage. So it's all about the balancing of the financial aspect, if it and how long they're gonna take to pay it back.

SPEAKER_06

Corey, commentary on where we're at right now.

SPEAKER_02

Yeah, and one thing that people don't realize is that the the way the security or the collateral for the lender is the lien assignment rights, the ability to special assess if the board doesn't. Um, and so that's one of the risk factors. Um, when we're talking about earlier, if if if own if there's a high delinquency rate showing people can't afford it, um, then you know it's gonna make it harder for the loan uh for the to be processed by the bank.

SPEAKER_06

Okay, I have to do a little uh housework here. So if you're watching the recorded version of this, you need to do a CU check-in. Um we're putting these out for CEU recorded versions. And right now you need to put need CUs. So if you didn't know that and you cut out early and you think you're gonna get your CUs, you're not unless you do this. So if you're not for this audience, you're fine. I know how long you're here for. This is for those that watch the recorded version. But you won't hurt anything if you put it in, don't worry. But these are once again for when we put out the recorded versions in there for C A M I C B. I need to have the CU checked in here. Um, so I'm gonna jump over to John on this. John, before I can I move on or any commentary on what we've discussed so far?

SPEAKER_04

No, you can move on.

SPEAKER_06

Okay. Uh Dave, commentary? Yeah, I'm with John. Okay. You're always with John, I notice.

SPEAKER_05

I like usually it's usually a good uh Good choice.

SPEAKER_06

Yeah. Okay. Wow, that was nice. Um Cynthia.

SPEAKER_08

I'm good.

SPEAKER_06

All right. Well, everybody hopped on the John bandwagon. Everyone knows John is terrific. Everyone hopped on the bandwagon. Okay. Tom, so we just kind of went over when borrowing is smarter. Do you want to summarize that before we dump in jump into some other aspects here?

SPEAKER_03

Well, again, I think it's smarter because I just had a conversation with someone in Florida. They need to repair their elevators. Everybody's gonna get hit with $20,000. How many people can write a check for $20,000 versus amortizing that over uh 10 years, 120 payments? It's more convenient, more conducive to spread out over time. And people still have the option, if they have $20,000, to write a check up front. So you have the best of both. You can pay it all or pay it over time.

SPEAKER_06

Cynthia, can I tell you something mean that I'm thinking about? Sure. You know why I don't like loans? Because if you live in an association where people just kick the can down the road and they're ready to kick the can, I'd rather have I'd rather do the special assessment because I can't stand the fact that they didn't make any repairs on a building for 40 years and then they got away with it. But I guess in the whole scheme of things, that's just what association life is. They get they do they get away with it, right? Because they're never gonna have to pay towards those repairs they should have done for 40 years. Do you think that's mean or do you think that's honest?

SPEAKER_08

No, I mean, I unfortunately that's what we see, right? They don't want to be the ones that are raising the assessments that need to be raised to put into reserves to to account for what's provided in that reserve study. So when the repairs are needed, they have the money. They're trying to be nice, but in the end, it's not it's not being nice. It's actually hurting everybody who comes in the future. If a consistent increase was made, they might never have to do a special assessment.

SPEAKER_06

Nice for them because they didn't have to pay. All right, situation blah blah blah blah blah. Let's compare assessment, immediate burden compared to a loan spread cost over time, Tom.

SPEAKER_03

I I think it's better to have a trend over time. Okay, that you benefit now.

SPEAKER_06

Sean, political backlash you could you're gonna get with an assessment, and a loan is a little more sneaky, it's less visible up front. What do you think of this one?

SPEAKER_01

Yeah, I mean, the political backlash can be managed if we do all the things right that we were talking about in the earlier part of the program, you know, planning ahead, open communication, you know, transparency, and and and really just frankly, uh candor is a big part of this. I mean, if you're at a spot where you need a large special assessment or you need to consider a big loan, then something has gone wrong. I mean, chances are it's because the assessments were not uh high enough going back some number of years or the reserve account was underfunded, and the and the board you know can't change what happened in the past, but really just needs to be frank and candid about that and put all its carts on the table. And that that way you can manage the political backlash.

unknown

All right.

SPEAKER_06

So I want to keep an eye on our time panel. So, Deb, I'm gonna ask the attorneys if they think political bad backlash is a bad term in our industry, um, because we're not supposed to be political, right? I'm just curious. Deb, what do you think they're gonna say?

SPEAKER_09

Um I actually think they would agree that that is what happens though, because you're on a board, so it's you're people are mad at you for what you're doing, so it is a little bit of a political backlash. So I I don't think that's a bad term to use.

SPEAKER_06

Don, what do you think? Very quickly.

SPEAKER_07

I don't think it's a bad term either. Oh, really?

SPEAKER_06

Okay, John, what do you think?

SPEAKER_04

Yeah, I mean it's it's it's not national politics, it's it's quasi politics, it's the local politics of you like you you are elected, right? If you want to get re-elected, you gotta consider what your constituents may want.

SPEAKER_06

Oh, okay. Cynthia, Dave, and Corey, do you agree? You don't have an issue with the term.

SPEAKER_02

Oh, right. Yeah, nothing nothing gets uh nothing gets people going to uh board board meetings more than saying there's gonna be a special assessment. That's true.

SPEAKER_06

I've actually heard boards tell me that's a good way just to get people there. Sort of rumor that you're gonna have a huge Tom's nodding his head. Oh, you're all nodding your head. That's kind of mean, but it does get people there. And I guess then they're happy, right? When they get there, they realize that it's not true. Uh assessment, no interest cost alone has interest expense, Tom.

SPEAKER_03

Accurate? Yes, and the amount of interest that you're paying is gonna be minimal.

SPEAKER_06

All right, but this is a big one, Tom. Assessment, risk of non-payment compared to predictable payment stream.

SPEAKER_03

It they really have no recourse because what do they do now for collecting their assessments? They have a process, and that's why a bank will look to see what your delinquency is, and if it goes above that threshold, then you're not gonna get a loan. But what happens now uh when they don't pay it, they're turned over to the attorney. It's the same process, nothing changes.

SPEAKER_06

So, Tom, do you think this is a valid this is a these are valid points for boards to consider, or you think it's an honest No, I think it's a valid point.

SPEAKER_05

Dave, what do you think? I think I'd go back to what Tom said, which is depends what the definition of minimal is. I mean, interest interest is usually pretty high to most people. I've I've seen um I've seen associations look, I don't know if this is correct, but anecdotally to me, it seems like you should never borrow money if you can pay it yourself. But if someone wants to loan you money at zero interest, you always say yes. So, you know, but I I think if you can if you can if you need to if you need to raise X amount of dollars and half of your people can pay an assessment immediately, you do that and you let and you borrow to cover the rest of the money, and you have those people pay the interest, maybe, you know, that kind of thing.

SPEAKER_06

Okay, and then the last one I have, Tom, is simple, simpler accounting for an assessment compared to more structured reporting for a loan. Is that true?

SPEAKER_03

No, uh it's the same. Every you know, my balance is ten thousand dollars, divide that by 120 payments, and then go back to what Dave just said. People that want to prepay, they prepay that reduces the amount of a loan, which in turn reduces the amount of interest for the other people. Don, I think like simple accounting.

SPEAKER_06

Don, I think 30% of my slides were off today. So this may be a record. No, not at all. Dawn's such a good cheerleader, isn't she? It's not that bad. Okay, uh, loan factors, owner affordability, impact on resale, um, you know, confident restrictions, impact on future boards, total cost of capital. The cheapest option isn't always the lowest risk decision. Anyone does Cynthia, when I say it like that, does it help drive the point home or is it just annoying? Be honest.

SPEAKER_08

I mean, you always help drive the point home, right?

SPEAKER_06

Okay. Uh it could have fallout during election cycles. There's a recall risk, there's a manager turnover risk if you make life too miserable for everybody. I'm flying through these because I want to have special time for closing thoughts for everybody. Reputational damage if you if you publicize it wrong, you know, media exposure, especially in condos. Um, we had our decks done here and the news ran with a completely false story. And, you know, everybody got through it. Everything's fixed and repaired now and the building's in better shape, but it was aggravating. Will this destabilize the community? What is the delinquency threshold? Have we stress tested the numbers? What does our reserve study recommend? Okay. Now there was a lot we went over, but I'm giving the panel plenty of time for closing thoughts to fill in the blanks. I will start with Dawn.

SPEAKER_07

Living in a community association, especially if you're in a condo association that needs significant repairs, you have to understand there maybe come a time that there would be a special assessment. So hopefully the communication will be thoughtful and thorough. If not, please have a very exceptional director's and officers policy because you're going to need it.

SPEAKER_06

And you couldn't you couldn't get in cyber assurance today. You love Segwagging cyber insurance, you couldn't do it.

SPEAKER_07

Well, we could get in there. I I could go there.

SPEAKER_06

Well, okay. I shouldn't challenge you, I know. All right. Uh let me let me hit you with a question, Corey, and or you can do close to close. The problem with loan assessments given over time is people don't make the payments. That leads to higher delinquency rates and and having to refinance the loan.

SPEAKER_02

Corey, true or false? Partially true, partially false. Um, and and one of the things, and I'll I'll lead into that, but one of the things I think that we missed today was that the timing of when the work needs to be done is really important. If you need to raise money through a special assessment between the notice, the meeting, uh, and when the payments actually do, you know, months can go by as opposed to a loan. It's it's just a matter of you know, having the notices to approve the loan and getting the money from the bank. So if there's an emergency situation, the loan option um may be your best bet to get the money in the hands of the contractor first. And then, you know, and and and with regard to collections, whether it's a special you're doing a special assessment either for the project or a special assessment to repay the loan, the most important thing is if if don't let your collections get out of hand. It's easier to collect a little bit of amount of money than it is, then you know, a lot of money for when when boards sit on their hands. So get your collections to your attorneys as as quickly as possible, um, so it doesn't get out of hand. And I had one more quick um comment for closing. There's more than just two options. There's more than just a special assessment or getting a loan from the association. Individuals can also get personal loans. Uh, maybe they get better rates than the association would to pay the special assessment. Um, so a personal loan is also the third option.

unknown

Okay.

SPEAKER_06

Uh Dave, question and then closing thoughts. Um, we had a huge insurance increase because the master D requires us to caddy insurance. We did an insurance assessment which did not need a vote. I don't understand the question. Do you understand?

SPEAKER_05

Probably uh we'll probably caddy, I meant to write carry, but oh, okay. Um yeah, it's probably what uh yeah, this sort of ties into what I was gonna say, which was you know, boards are fiduciaries, politicians, yes, but fiduciaries overall. And it if they can't get the funding, either because the owners won't do it, owners can't do it, lenders won't provide it, it's a real problem. And frankly, you know, they they the board members may have to consider resigning. Like you can't you can't be on the board, in my view, and have an obligation to make repairs, but then just not do it because you don't think you can get the money. Um that that ends can end really tragically uh for people and for you on a personal level, if you've decided to be the the popular guy at the clubhouse by saying, I've been on the board for six years, I've never raised never raised assessments once, and someone's building falls down, uh, you know, it that's a real problem for you. So a board board members have to realize if they're unable to get the funding or unable to be leaders to get the funding, they have to think about maybe not being on the board.

SPEAKER_06

Uh Deb, I'll ask you that. Thanks, Dave. I'll ask you that same question for your closing thought, or you can do closing thoughts. We had a huge insurance increase because the master D requires us to carry insurance. We did an insurance assessment which did not need a vote. I guess that's a legal question still, Deb, or is it an insurance question? I don't know.

SPEAKER_09

Um, yeah, I mean it's still a legal question because I don't know what does or does not require a vote. Um, what I do see here in New York a lot of times is we're doing what's called deductible resolutions and trying to push the master deductible back onto the unit owners when claims happen. Um, and some attorneys say you need votes, some attorneys say you don't, you can just do it by a rule and regulation change. But that all goes back to, again, their governing documents, which that allows them to do something like that. Um, but I wanted to kind of bring in that whole insurance thing. All of this information is very important to your insurance agent because we need to understand do you currently have a special assessment in place? Um, because insurance applications ask about it. We want to know the financial health of the community. We want to know that you're actually maintaining your buildings like you're supposed to. So if you know your roofs are 30 years old and you haven't been saving for the last 30 years, and now you have to special assess to um replace your roofs, underwriters take that into consideration when providing terms for the insurance coverage.

SPEAKER_06

And then Dr. Inglum, just to warn you, I'm gonna let you close this out with great words of wisdom that will last and make everyone feel good for the rest of the day. That's what we're looking for. Cynthia, I am I getting an answer to this question? We had a huge or commentary. We had a huge insurance increase because the Master D requires us to carry insurance. We did an insurance assessment which did not need a vote. Should I just drop this one or yeah?

SPEAKER_08

I mean, it sounds like that's their documents allowed them to do that. There's nothing wrong with that. That's fine. They found an alternative way to address it, but I think it comes down to what's in your documents. And and something I want to point out as well is talk to your attorney and see what options you have. I know there's a lot of documents in North and South Carolina that have very specific restrictions and vote requirements for associations to obtain loans and to pay those loans back. And so when you're considering are you going to do a special assessment or are you gonna enter into a loan, talk to your attorney well in advance and see your options for each and what requirements you have because you may not be able to do a loan, you might have to do a special assessment.

SPEAKER_06

Okay. Uh, John, question and closing thoughts in 30 seconds. What is the guidance of a manager with due diligence has been done to bring forth the SA by the documents, and the board refuses to comply and get sued? The manager has to go to court with the I can't read the rest of it from the system. Can you do that one or if you can't, don't worry about it. I'll get back to them.

SPEAKER_04

Um, yeah, not really. I think they're saying um, what if the board disregards the property manager's advice? I mean, we've dealt with that before and pirates and that may be grounds for the managing agent to uh terminate the contract. Okay, closing thoughts. Yeah, quick closing thoughts. Don't be so I I I found with special assessments that um communities um sometimes there's a tendency to exaggerate the fear of collecting. Um, you can collect special assessments just like you can collect common charges, and it's pretty much the same people that don't pay the common charges on the time will be the ones that don't pay the special assessments, and vice versa. So if you have a 97% collection, you'll probably have that on special assessments. So don't be overly scared about it.

SPEAKER_06

All right, Sean, I'm out of time. I want to leave time for Tom though, really quick. Can the boat at the board vote to obtain a loan to mill and pave the entire roadway without putting it out to a vote to the ownership? If you can't answer that one, Sean, it's fine.

SPEAKER_01

That is completely dependent on the governing documents. But as far as closing thoughts, um, one thing that's critical to consider that we haven't touched on yet is if you make a special assessment and the one of the units doesn't pay but is lost to foreclosure either from the association foreclosing on a lien or the or the uh bank closing on a lien, that assessment cannot be transferred to the next owner. It has to be, you know, that whole has to be made up by everyone else. Whereas a loan, um, over time, if those payments are put into the regular assessments, then future owners of those units are paying into that uh loan repayment. Um, where you know that's kind of a critical distinction between the two options. Excellent.

SPEAKER_06

All right, Tom, uh closing thoughts on today?

SPEAKER_03

Well, I deal with this every day. I don't think giving a loan for the association is that complicated. Um, you're getting buying power for everyone versus them trying to do it individually. But I think the key is two components. One, uh have a bank that specializes in association loans. And second, most important, what we talked about the first 15-20 minutes, lay the groundwork, get the attorney involved, get the the business partner involved, have a special meeting with everyone and communicate. And I don't think you'll have a problem. Every, I mean, every loan that I've ever been through is always gone according to plan because we gave good direction and have learned what professional and found what they need to do.

SPEAKER_06

All right. I want to thank everybody for being here. I hope to see people later for Feminist Theory and HOA governance. And thanks again. And I hope to see everybody soon. Bye, everybody. Thank you so much.