People want some of their HOA money back
Q: On May 1, I will be mailing my monthly homeowners association dues. This payment covers use of the gym equipment, pool, library, billiards, sauna and hot tub. It also covers special events such as meet and greets and other periodic lunch and learn workshops.
This will be the second month in a row that I am paying for these services with everything in our community center closed. There are no services offered, but HOA dues are still being collected.
Your Sunday column in the Review-Journal is always informative. Please advise if we the residents have any recourse in this matter.
A: Ultimately, this will be a board or a legal decision. This is not the case where the association made a decision to shut down the amenities and the events at your association. The shutdown was a result of the governor’s multiple directives. I do not believe the association has a legal obligation to credit the dollar difference to the homeowners.
Whether an association can offer credit will be dependent upon advice from its attorney and certified public accountant, as well as the financial status of the association.
I have seen a few letters to the editor, asking the same question or even where the writer was demanding a credit on their assessments. I would ask my readers to review their 2020 budget. R
egardless of the amenities not being used, associations still have operating expenses, such as the following:
■ Utilities (gas, water, electricity, rubbish, sewer).
■ Telephone system and internet systems.
■ Insurance polices.
■ Security systems and patrols.
■ Services: landscape, aquatic, street sweeping, lighting, gate companies. There also might be additional expenses for the recreational center and office as to cleaning and disinfecting.
■ Management fees (still collecting assessments, processing invoices, responding to emergencies, etc).
■ Payroll (even if you just have a skeleton crew).
■ Payroll expenses: state and federal taxes, unemployment fees, etc
■ Monthly funding of the reserves.
■ Potential loss of assessments and increased delinquency.
If an association — based upon the advice of its legal counsel and certified public accountant and based upon its finances — were to issue credits to the membership, the credit would be based upon the percentage of the amenity in relationship to the gross expenses.
If for example, the projected expense for the amenities were $1,000 per month and the gross projected expenses were $25,000 per month. The amenities would represent 4 percent of your assessment.
If your assessment was $250 per month, the credit would be 4 percent of that monthly assessment or a credit of $10 per month.
Barbara Holland is a certified property manager (CPM) and holds the supervisory community manager certificate with the state of Nevada. She is an author and educator on real estate management. Questions may be sent to holland744o@gmail.com.