Jan Buzzbee rightly asked a question about the costs of the Association taking over the responsibility for termite inspection and control:
Joy,I neglected to ask a question at the meeting of the 8th that I meant to ask. We talked about the termites and the siding at the meeting on December 8th indicating the change would be the association to take responsibility for the termite control and siding replacement. If the association is responsible for the siding, are we required to keep in reserves the amount necessary to replace the siding of the complex at a stated time period as we do the fences and roofs? Have we received a estimate of the cost to replace siding if we were required to replace the whole complex? I do realize there is economy in numbers, but it would be helpful to know the cost whether it would be a special assessment to all owners or an increase in our monthly dues. We talked about the termites and how each homeowners could be assessed an amount for the cost if we needed to treat, whether it was tenting or some other method. Thank you for your thoughts on this.
This was the CC&R Revision Committee's reply:Based on comments received from the survey and discussed at length during the Town Hall meetings, the committee feels that the Board needs to get certified estimates regarding the costs of Termite Inspections and Treatment as well as other aspects of siding maintenance before this issue is brought to the membership for a vote. We were prepared in January to ask the Board to seek some competitive bids from termite companies as well as confirm information given to the committee by the consultant who oversaw our painting process, but this, too, was carried over to February.The background of the proposed change is the following:1. Our Association is in the minority on this issue; most Common Interest Developments and Townhouse Complexes have delegated the responsibility for exterior maintenance and termite control to their Associations. In that way, the membership can be assured that the work is done to standard and in a timely fashion.2. During the previous revision process in 2005, the Board was told that a reserve of $500,000 for siding replacement was required; subsequent investigation has shown that that figure would only be applicable if the Association were to do regularly scheduled full replacement of the siding similar to the roof replacement that must be done every twenty to thirty years - this is not a standard maintenance procedure! Instead, exterior maintenance and siding repair would be done on an 'as-needed' basis because of pest or environmental damage, so the repairs would be covered by the annual operating budget or a reserve that is set up specifically for termite inspection and repairs. Any event that required wholesale replacement of the siding, such as a fire or earthquake, would be considered catastrophic and come under a different category, hopefully covered by insurance.3. Understanding that the membership wanted some sense of the costs involved for termite work, the committee did get preliminary estimates of $30,000 for termite inspection and exterior repair of all units and the common buildings; the warranty for the work would be three years, so the cost would be amortized at $10,000 per year. The repair work would not include painting, but the Association has sufficient paint in reserve that could be used by a handyman to complete the work. These estimates are the ones that need to be validated as discussed above in item 2 under Project Status.4. Any interior damage repairs would be the responsibility of the individual homeowner, but a special price would normally be offered by the contactor to do the work as part of the project.5. The Board needs to do an update of the reserves study with this project in mind, so we can know if there is money in reserves that would cover the initial termite program, but, if not, the cost could be covered by a monthly dues increase of $10 per unit. We will document the financial details in the ballot.6. The above numbers do not include tenting. If tenting is required for certain blocks, the cost will most likely be covered by a special assessment of ALL Homeowners. Again, financial details will be provided with the ballots.7. If the membership does vote to return the responsibility for exterior maintenance back to the Association, provisions will be made to make sure that any documented maintenance that should have been done by individual owners this year will be completed at the owner's expense.
Rich Bortolussi wrote:
ReplyDeleteJan raises a good point.
Many years ago the board, along with attorney and Community Management rep, discussed the issue of siding and responsibility. As there were no reserves ever set aside for siding, and the cost would obviously be huge to replace all siding or even a building section of units, it was decided to have each owner be responsible for their own unit.
IF, we are moving back to the Associattion responsible for all outside siding, one must consider having reserves for this, which increases the monthly dues considerably, OR assessment to every homeowner equally to cover costs, as occurred when the 1989 earthquake knocked down chimneys... we were all assessed monthly amount to cover the replacement cost even though you did not have a fireplace at your unit. I remember if costly $1000.00 per unit and this was just for chimney replacement.... what would it be to cover cost of siding??? !!! Yikes.
Jan's point is a good one. It isn't just deciding if responsibility goes to the Association (which is us --- the homeonwers... ), need to draft and put into the rules how the monies will be created or how the payment for replacement works so each homeower knows what it really means to them cost-wise.
Happy Holidays to all..
Richard Bortolussi
Susan Buchholz wrote:
ReplyDeleteThank you Richard and Jan for bringing this up. To my understanding, the situation that Richard describes below is the very reason that the Board changed the responsiblity for the siding to the homeowners. Because either each homeowner's monthly dues would go up, or they would be charged a very large assessment fee. The money for the Reserves needed to come from one of these sources; and neither was agreeable to the general population. It is very important that these cost considerations be spelled when it comes time to vote. And personally, I think I the responsibilty should stay where it is.
Rebecca Davis wrote:
ReplyDeleteI agree with Susan. I think the responsibility for siding should remain with the individual homeowners. My reasoning is that, while an earthquake is an act of providence, siding is, to some extent, a matter of maintenance. I'm assuming that if I don't stack wood near my house, and keep an eye on matters in general, I can probably catch a problem before it becomes huge. If this is the case, I don't want to pay for someone else's negligence. Or am I making invalid assumptions?
P.S. For what it's worth, although I have a chimney, I think it would be unfair to expect my neighbors to pay for its repair. They chose to buy places without chimneys.
Joy Maguire wrote:
ReplyDeleteActually, Rebecca, you made reference to not expecting other unit owners to pay for your chimney repair, but indeed that is exactly what happened after the earthquake - ALL 100 Homeowners paid $1000 each to repair all of the chimneys; the case went to Court and was decided in favor of a common assessment for all since the chimneys are part of the shared roof structure.
That was what Rich was referring to as well.
Regarding the need for reserves, it's hardly likely that all of the siding in the entire complex would need to be replaced all at once. Maybe it would be better to survey the homeowners to find out what the actuals have been over the last five years (or whatever time period makes sense) so that a more realistic reserve estimate could be made.
ReplyDeletePersonally I agree with Doug King about it making more sense that the responsiblity should be the Association's, for all the reasons he stated.