As a homeonwer association attorney with more than
25 years of experience managing community associations, I have concluded
that the following are the most common causes of trouble for
associations.
- Inadequate
assessments and reserves over a long period of time
- Delinquencies leading to a loss of revenue
- The developer leaves
the association with an inadequate budget. Usually, expenses have been
materially under estimated resulting in the accumulation of inadequate
or no reserves.
- The developer failed to pay its assessments
during the marketing phase which goes unnoticed by its hand-picked
management company. By the time the association becomes controlled by
the buyers, it has inadequate or no reserves.
- Construction
defects are not adequately addressed resulting in higher than estimated
repairs and maintenance.
- Prior boards have made a poor choice of
hiring contractors resulting in wasted money.
- Prior boards have
failed to get legal advice before making important decisions leading to
costly errors.
- Prior boards have made poor choices in hiring
management companies who have provided poor advice to the board
resulting in expensive mistakes.
- Prior boards have made costly
errors in purchasing insurance converage for the association which has
resulted in not maximizing coverage.
- Prior boards have deferred
maintenance work which has resulted in more expensive, unnecessary
repairs.
- Poor management decisions have resulted in the loss of
existing insurance coverage and the need to acquire replacement
insurance coverage from a second or third tier company at substantially
higher premiums.
- Poor decisions have resulted in the association
paying expenses that should have been paid by an owner or owners.
Do any of these points apply to your association? If so, let us
assist you in developing a plan to turn things around.