LONG TERM SPECIAL ASSESSMENTS

By Darlys Walker 

Published November 4, 2015

       

Recently our CAM firm acquired a new client. Their previous management company had advised them to take out a loan, for pool repairs, in the amount of $300,000 and then to special assess the Homeowners over the term of the loan (5 years) for the repayment. What are your thoughts on this? The average special assessment amount per month is $60.00 or $720.00 per year. Over a period of 5 years the average unit owner would have paid $3600.

      

The $300,000 loan had a closing cost of $2500.00, an origination fee of $1200.00 and interest of $43,820 on a 5 year note. These amounts cost the average unit owner an additional $864.00. I would have advised my client to take one action but not both and it would depend on the profile of the unit owners.

  

This is a luxury community with the average selling price of $600,000. My recommendation would have been a one-time special assessment payable over two months. If this had been a community of homes in the high $100s to low $200s, I would have recommended the loan and would have suggested that the Board increase the monthly maintenance fees, incorporating the increase to cover the loan payment.

      

When considering special assessments versus loans, boards should be aware. Lenders and mortgage companies, look adversely at special assessments, for any reason. What is your experience or opinion?

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Darlys Walker, Founder and CEO of Condominium Concepts Management, Inc. (CCM), is recognized for her straight talk, subject matter expertise, and valued insights regarding real  

state management, leasing, and HOAs. Her company serves a diverse portfolio of properties, from 16-units up to 600 as well as large mixed-use developments.  

 

   From its beginnings in 2000, CCM has become a well-respected asset manager and now works with over 100 associations with 16,000 units served by over 300 employees. Darlys and her team deliver resources and responsiveness through six regional offices - in Orlando, Miami, Jacksonville, Charleston, Nashville and Atlanta.

  

   Darlys Walker is best known for her passion and precision, understanding that the only difference that matters in today's demanding marketplace is service delivery ... doing what is promised and what is right. She knows that every community serves two masters ... the property owner/developer and the resident/homeowner. "If we are not equally responsive to both, we are not doing our job," she states.  

 

   Her clients say it best: "Darlys really knows her stuff" ... "at the top of her profession and it shows in the caliber of her clients" ... "delivers quality resources that match up well with needs and expectations that are really rigorous."  

 

   She is a licensed Real Estate Broker in four states, holds an Associate's Degree in Marketing and has earned the Accredited Real Estate Manager designation from the Georgia Institute of Real Estate Management. Also she is one of few certified as a Lead-Based Paint Abatement & Removal Trainer in Georgia.

  

   Darlys Walker and her team have been selected to manage the condominium conversion process and day-to-day operations for many of the Southeast's most high-profile condominium communities including luxury high-rises, mid-rises and garden-style homes. Most recently she has been recognized as an expert in 're-versions' of communities from condominiums to leased homes, as well as repositioning projects. A visionary and a tireless perfectionist, Darlys demonstrates hands-on leadership, working individually with each client and staff associate to achieve defined business outcomes and satisfaction.  

  

  For more information about Darlys Walker and Condominium Concepts Management, Inc. please visit www.condominiumconcepts.com.

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