Town Crier Articles

Funding a Shortfall: Annual Assessment v. Special Assessment
Posted on March 1, 2024 6:45 AM by Jack Espinal, Board President
Categories: NTRA Business
Homeowner associations (HOAs) are responsible for providing a variety of services to their members, as spelled out in their governing documents. How do we pay for these services?
The New Town Residential Association has only one consistent source of funding -- the homeowner assessments (commonly referred to as HOA dues) which are authorized by our Master Declaration and State law, and paid by each homeowner.  While our income is sometimes supplemented by project grants, some investment income, and closing fees, this additional revenue contributes only a very small portion of our budget.
Each year the Board develops a budget and generates projected Annual Assessments to be collected for both the General operating expenses (e.g. property management, trash removal, maintenance of streetlights and landscape, shared expenses with the New Town Commercial Association, legal and administrative expenses) and the specific Neighborhood expenses of our community (home landscaping, and various exterior maintenance and inspections provided solely to the Village Walk neighborhood.) Assessments also include a contribution to reserves to fund the replacement of amenities, emergency repairs, and other unforeseen expenses.
When expenses exceed the total amount of income collected by the Association, the Board of Directors has a limited number of possible options. They are:
  1. To increase the amount of the Annual Assessments in the following year.
  2. To reduce services and thereby the associated expenses for the Association.
  3. To borrow money to cover the shortfall in funding.
  4. To assess each homeowner a special assessment.
Our governing documents give the Board of Directors the authority to increase the Annual assessments and to assess homeowners a special assessment. In the case of Village Walk, there is additional specific language that allows the Board to use a special assessment to raise funds “for significant repairs, replacement or maintenance projects” if the Board finds it is in the best interests of the Association and the Village Walk Neighborhood to do so. Given the continued exterior construction problems in Village Walk, the Board has discussed the likelihood of a Village Walk special assessment since 2022, and is now proceeding to define how this would occur to be both fair to Village Walk owners and fiduciarily responsible to the Association.
It is a serious step for any HOA Board to contemplate a special assessment. A variety of factors need to be weighed including how quickly the funding is needed, what the range of expected expenses could be, payment options, and potential financial hardship situations. Paying a special assessment is mandatory for affected owners and nonpayment can result in serious consequences for both the owner and the Association.
Comment By: Dr. Virginia Eckroade
Posted on March 1, 2024 11:13 AM
Our fees are so high already. What will happen to them when all the required work. in Village Walk has been done?

BOARD RESPONSE: Prediction of the future is very difficult and that makes your question hard to answer. Once the NTRA Board of Directors has determined the level of repairs required and the associated maintenance costs, that information will be used to calculate the Village Walk (VW) special assessment. This special assessment is expected to be large and it will be used only to resolve the near-term VW maintenance issues and to begin rebuilding the VW Replacement Reserve Fund. This one-time special assessment may be spread over one or more years.

If the data the Board receives is correct and if the repair estimates are accurate, it is likely that the VW Neighborhood Assessments will stay at current levels and only be increased by the amount of future inflation levels. The Board desires to only collect the funding needed to perform VW’s anticipated repairs with a goal of keeping assessments as low as possible and still provide adequate and timely repairs and services. In the event that VW owners are assessed at rates higher than necessary to perform repairs, provide services, and adequately fund the VW Replacement Reserve, the NTRA Board will have the option to reduce homeowner assessments in future yearly budgets.

Last Edited: 03/03/2024 at 11:35 AM
Comment By: Paula Meehan
Posted on March 4, 2024 6:31 PM
What is the status of the following that should help alleviate the ridiculous increases we have been experiencing in dues at VW and what appears to be a special assessment coming?
* the return of money spent on roof repairs before it was acknowledged there was a construction issue? What is the exact amount that we are asking to be returned to the VW funds
* what is the status of asking for repairs on rooftops that have been an issue here as well as homes in Richmond built by Eagle Construction?
*what is the status of the siding repairs and the total amount spent and the status of Eagle Construction paying for these repairs?
I don't feel it is right to increase the dues before we know what are the actual cost and what eagle will be responsible for. if an owner pays these cost, sells their home and then the funds are return, the owner is then out all the money paid in advance. The painting is a good example of this, our home is 80% brick, the siding is supposed to last 8 to 10 years and we are paying for painting that i may never need. 50% of my siding has no exposure to the sun like the houses that are experiencing painting issues. Additionally the houses experiencing the problem are dark color homes.
Anyway, these are questions I am looking for answers before we just accept a special assessment without knowing all the details of the
Additionally, what are our options for a class action suit against Eagle Construction? There are just too many issues to look past now.

Last Edited: 03/10/2024 at 05:02 PM
Posted on March 10, 2024 5:04 PM

The NTRA and our attorneys are still in discussion with Eagle over the amount to be reimbursed for the roof repairs undertaken before Eagle Construction agreed to repair all Village Walk roofs. (Eagle had initially agreed to pay 70 percent of the NTRA’s independent inspection of Eagle’s roof repairs (about $6,000) with remaining reimbursement to be negotiated.)

Roof deck repairs are included in these deliberations.

Regarding siding, $37,055 has been paid for residing the building at the corner of Casey Blvd & Settlers Market. The building awaits painting ($29,425 bid) and the repair of 1 roof deck which is expected to cost $30,000+). It is also likely that siding repairs on future buildings will be more expensive due to an increase in the scope of work that was developed during repair of the first building.

As stated in the March Board Buzz, siding problems to date are due to material manufacturing defects. None of the siding repairs or painting will be paid by Eagle unless more construction defects are discovered.

The Association has paid for some necessary repairs to document whether there are construction defects (siding repair on 1 building, and on several rooftop decks). Also, roof deck repairs require fast response because these water leaks can invade a homeowner’s healthy living space. Such repairs cannot await lengthy legal negotiation and response. Dark-colored homes are not the only ones in Village Walk needing repairs and painting. Most buildings in Village Walk have already experienced siding and painting issues. Painting is normal maintenance provided by the NTRA as required in our governing documents.

From a cost perspective, negotiation with Eagle (which NTRA has and will continue to pursue where we have solid evidence of Eagle construction defects) is a much better course of action than pursuing an expensive lawsuit where it is not clear who would prevail.

Last Edited: 03/20/2024 at 05:06 PM
Comment By: Thomas and Glenys Frazer
Posted on March 19, 2024 9:02 AM
With regard to your above post stating "Every building in Village Walk has experienced siding and painting issues".Our property for one, does not have any problems with siding and painting as far as we are aware of as the property owners.
Built in 2019/2020,our 2 story mostly brick home has very little siding, only partially on the garage sides, a small section above the garage and a small section on the upper side wall, we also have no deck or balcony. The siding on these areas are JAMES HARDIE siding, this was confirmed by Eagle Construction and Northeast Construction, the contractor who put the siding on our property.
Our James Hardie siding does not appear to have any issues. The only painted areas are the front and back door, which don't appear to be needing painting yet. Thought this was important to clarify when it was stated, "Every building in Village Walk has experienced siding and painting issues".

BOARD RESPONSE: We have modified the response to say "Most buildings have already experienced siding and painting issues." About 30 homes in the Phase 2 section of Village Walk have been identified by Eagle as having James Hardie siding. It is also true that the front and sides of the 2-story homes are mostly brick, and that the small amounts of siding on these areas, as well as on the backsides (where the garages are located) is in fairly good shape. Of course, in the next few years there will still be a need for routine maintenance, including possible fixes for relatively minor, developing issues such as emerging rust on lintels above windows and doors on brick sides.

Last Edited: 03/23/2024 at 12:57 PM