Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Saturday, July 3, 2021

How Home Owners Associations, HOAs, condominium buildings function, order and pay for repairs - by Mary Cummins

Home Owners Association, HOA, condominium, mary cummins, los angeles, california, real estate appraiser, funds, repairs, regulations, laws, legislation, cooperative, board of directors, corporation
Home Owners Association, HOA, condominium, mary cummins, los angeles, california, real estate appraiser, funds, repairs, regulations, laws, legislation, cooperative, board of directors, corporation


People have been asking why didn't the Miami, Florida Champlain Towers South Home Owners Association  just do the recommended repairs before the building collapsed instead of wasting time arguing about it. It's not that easy. I'll explain how HOAs work. 

Condominium buildings and Cooperatives are owned collectively by the owners of all the individual units combined. Each owns a percentage based on what percentage they own of the total building. A Board of Directors controls the Home Owners Association which is a corporation made up of the condo owners. They each get a vote according to their percentage ownership of the project. If someone owns two units or a large top floor penthouse, they may have more votes or voting power than someone who just owns a small condo. 

The HOA must vote to approve major special assessments and expenditures beyond the normal monthly HOA dues or repair funds. You need money to pay for repairs especially $15,000,000 worth. 

In this case the Board didn't realize the building could soon collapse. The Board is made up of condo owners who would definitely care if their condo could collapse and be worthless or they could die. If the engineer involved thought the building could collapse, he would have reported it to Building and Safety. If Building and Safety inspected and agreed the building could collapse, they would have red tagged it stating no one is allowed in or around the building and it may have to be demolished (like they just did with the remaining part of the building as of 07/04/2021). If they thought it just needed some repairs, they would have yellow tagged it ordering the repairs. 

The HOA would have to agree to pay for, order and make repairs or people can't live in their condos. If most vote for the special assessment, it passes. If a condo owner doesn't pay, the special assessment will become a lien against their condo unit. HOA may then need to get a loan to pay for repairs if many owners refuse or just can't pay the assessment. HOA loans aren't cheap or easy. It would also be difficult to sell a condo with a huge looming special assessment or needed repairs. If you're an elderly person on a fixed income, bought your condo cheap many years ago and have no savings, you may not be able to afford the assessment. Some owners sold because they couldn't afford the assessment. They are the lucky ones today. 

I'm sure many HOAs are completely reviewing their maintenance and repair schedules, HOA dues and repair funds after this horrible disaster. So are regular apartment and office buildings. I'm sure cities, counties and states are also reviewing regulations and protocols so another tragedy can hopefully be averted in the future. 

Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the California Department of Fish and Game and the USDA. Mary Cummins is also a licensed real estate appraiser in Los Angeles, California.


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