Special assessments happen. No matter how well managed an association is, things happen and money reserves can be exhausted, making special assessments necessary. Since it won’t do your community any good to pretend your HOA is above special assessments, we encourage you to focus on these tips to make the process simple and understandable for residents.

You may need a special assessment to cover the cost of new boilers, roofing, fresh paint, or to cover a damage left by severe weather.  Let’s get started on how to best manage these financial decisions without inciting lots of anger and major objections.

  1. Before issuing a special assessment, read your governing docs. Since special assessments can make people emotional, your HOA needs to make sure everything is done by the book and you’re legally within your rights.
  2. Work with residents, according to CC&Rs, to pass special assessments. Remember in most cases homeowners have a chance to reject the special assessment, but only if done correctly and within a certain time frame. Communicate and document that process in detail. That way no one can come back and argue the special assessment blindsided them.
  3. Do your due diligence, and make sure that the project you need funds for is necessary. Nothing will upset homeowners faster than paying extra money for frivolous projects.
  4. Act on behalf of your fiduciary duty to follow the law. Most HOA governing documents and some state laws require a certain amount of money in reserve. It is in the community’s best interest to request a special assessment instead of taking a loan. This doesn’t mean your board should be careless with the reserves; a special assessment to replenish funds should only be used in emergencies, like after a flood for example.
  5. Communicate, communicate, communicate. If residents feel like the HOA is acting on behalf of their best interests, your board will receive less push-back on special assessments. The best way to do that is to really communicate with residents the need and reason for a special assessment. If they understand the reasons, they will be less likely think the board has been irresponsible with their existing dues.

By focusing on the above tips, your board will hopefully encounter less push-back or resentment. Special assessments happen in almost all communities, but how the community reacts to it is based heavily on how the board handles the process. If you have questions on how to implement a special assessment or need help with your HOA property management, contact Spectrum; we are happy to help!