Whole Building Refurbishment Is Best, But Only Piecemeal Is Possible

Pictures and information provided by the property manager

The BOD has been unable to collect the Special Assessment payments from all unit-owners in any building except for Building 19. Consequently, whole-building refurbishments (the most cost-effective strategy) have been stalled because of the lack of payments.

An alternative strategy to fund a building's refurbishment is for the BOD to borrow money from a bank on behalf of unit owners, and then pay back the bank with the money that unit owners pay in their Special Assessment. The current BOD attempted to secure that type of loan but were denied because the bank judged our community to be a bad risk because of too many unit owners with unpaid monthly and Special Assessments. 

At the same time, the whole community is in danger of losing insurance coverage, falling property values, and possible actions from the City code enforcement. Unable to fund the projects the way they would like to do it, the BOD has settled for a strategy that is at least possible, if not desirable. They have commissioned repairs to be done on buildings in a piecemeal fashion.  That is to say that various buildings may have only one or more sections of the building worked on, as a reflection of the amount of Special Assessment funding that has been collected for that building.

Coordinating such a dispersed construction effort is a challenging task.  The pictures reveal a color-coding system developed by the Property Manager to stay organized. Materials (purchased by the BOD directly so as to avoid Contractor's mark-up)  are stored in the clubhouse (for security reasons, as it has a security alarm). Equipment stored in the maintenance building are guarded by sensors and alarms, and each night the cherry pickers are used to block the maintenance building garage door. 

BOD Meeting July 6th, 2009

The Board of Directors met last night. They spent a good amount of time explaining to the owners of building 27 the complicated details of their finances. Apparently a building refurbishment loan with a premature repayment deadline had been renegotiated. The Board explained that the terms of the new loan were more favorable for building 27. They also explained that a loan default would have serious consequences for the entire Association because the once building-specific bank loans were "cross-colateralized" with other loans when the previous BOD purchased two units within the community.

There was much back-and-forth between unit owners and BOD members about the finances (when, how, and why decisions were made). In the end, a BOD member summarized the situation by stating the simple truth that we (the Association) owe the bank money and we simply must pay.

Apparently building 27 is not the only condominium facing financial problems. Keeping the financial records straight has always been a challenge here at TAJ. Every new BOD in recent history has expressed strong intentions to correct any problems in that area, and every BOD discovers, eventually, that our way of doing business is so complex that even well paid professionals have difficulty handling the work. By the way, it seems that the new accouting firm (Moody) is on top of our finances. Unfortunately, there are a lot of mistakes to correct from past years of poor accounting.