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|User Info||Another Piece of the Housing ScrewJob; entered at 2023-01-23 11:26:00|
Registered: 2010-08-20 San Diego, CA
I live in a PUD (similar to a condo) in California, which has essentially no laws on establishment or use of cash reserves. Our boards for more than 20 years have plundered the reserve for pet projects repeatedly and, when I questioned one such use in an annual meeting, a board member responded, "We didn't have enough money in the operating account, so we added it to the reserve study so that we could use money from the reserve account."|
For many years the board was reluctant to raise monthly dues and as a result was unable to keep up with termite damage to wood siding, damage which was exacerbated by not painting for 25 years. Making it worse was that the the worker hired by the board, because he was the low bidder, replaced siding without checking for termites in the structure beneath the siding, so new siding was quickly destroyed from beneath. Needless to say, none of the board members was checking his work. The result was a $1.3 million special assessment to replace all siding in the community.
The board was replaced with mostly new members, and things promptly got worse. The siding project had not included fascia, which also had not been painted for 25 years and which also was was found the be rotten and termite damaged.
Rather than finding out what it would cost and hiring a contractor to do it after making an assessment to cover the cost, the board just embarked on doing the project under its own supervision (with the board president, who is a retired school teacher, in charge), and "added it to the reserve study so that we could use money in the reserve account." The project has taken more than three years and is not yet complete. No one knows how much it has cost, including the board. Our reserve account has been drained to zero.
Meanwhile, streets that are badly in need of repair have not and will not be repaired. Exterior stucco which is badly in need of painting cannot be repainted because we do not have the money to do that. Etc.
But we have shiny new fascia boards, which may or may not be properly installed.