You should have a reserve account and hopefully have enough money in there to pay for it.
If you didn't maintain one you need to do an assessment of each owner to come up with funds. Depending on your state law, your governing documents, and the amount of assessment you may need to have owners approval before you can proceed.
You may be able to get a loan. Tehy don't require board members personal guarantee. Depending on the financial situation of your association it might be very hard or very easy to obtain financing.
Most well managed Condo Associations have a reserve fund to cover large planned expense like roads, roofs, painting and other major maintainence issues.
I know some Associations have arranged for a loan if they are unable to pay for the repair in full. Owners are assesed a portion of the monthly repayment. When the loan is paid, all owners go back to paying regular maintainence. Other Associations insist owners must pay cash or get their own loans and pay the assesment within 90 days. There should be a provision in your condo docs that deals with this issue.
Last year we were faced with a deliema of fixing our parking lot.
We went to 3 different banks, one of which we had a loan with previous for our roof,and paid it off. We were turned down. Little did we (the new board) know that since the previous sec/tres fondled our money incorrectly and did not handled things in order we got the boot to the loan.
So we talked it over (the board) along with now a management service and assessed (15) of our owners for one year at the rate of $65.00 each. This put money back into our account and also got much money back from a deliquient home owner at a sale.
People please be aware that if your board is not running properly it will come back to haunt you.
When people are behind and the books are not properly kept and or money is missing, this is a red flag for a loan.
I thank God everyday for our management service who has turned us around.
So beware before going for that loan. And make sure there is enough money in reserves for the big items on your list.
Good luck with the loan and if not the assessment if the only other way to go. Smiling now, but a year ago we were frowning!
We are a 30 unit condo built in 2003. So far we have about $95,000 in our reserve fund. We just finished the job of sealing all hot-top surfaces at a cost of $7500 which we took from operating expenses.
From our monthly condo fee of $340. we put $29.00 into the reserve fund.
We just did a loan to move up completion of road and roofing project since they were failing at a great pace than our reserves were planned for. You must have your finances in order and make sure your delinquencies are kept low with collection and lien measures. It was a great option for us as without it we would have had to increase assessments $50/mth and still had to reduce the roof completion thereby increasing our repair costs and dissatisfaction of our co owners. We did need a majority co owner approval and that took some time to educate and get so plan ahead.
I would stay away from a loan unless there is absolutely no alternative. Why pay that interest and bring a third party into the process (who will probably want to be involved in decision making). And another unplanned or insufficently funded issue may show up down the road and if you are paying a loan you will be really in a mess. How would owners feel about a one time special assessment? You don't give the cost estimate or say how much you have in reserves. It would appear you have a reserve fund but it is not sufficient to cover the cost. Or paving was not even part of the reserve plan. Another "lessons learned" for readers of these blogs. Thank you for sharing.
We had several paving companies evaluate our lots. We ended up resurfacing some areas and not others. In a few areas we only resurfaced partial strips, instead of everything, and it has worked out fine. Perhaps you can do only your worst areas this year to avoid the loan/assessment altogether.
It is unfair that we are considered private property and are responsible for maintaining the streets (snow removal, street repairs) yet we pay taxes in our communities and get no services. Everyone advising you to set up a seperate reserve account that you fund monthly is totally correct. I would also check your state condo laws, you may be required by state law to maintain a certain percentage of your annual budget in reserves to limit assessments to the owners, our state requires this. We totally repaived our property a few years ago, we had to do the worst areas first then the remaining part the next year, the project was funded by our reserves and it cost over $100,000.00 with no special assessment to owners. We put $2000.00 a month in reserves. We thought about a loan but did not want all the issues a third party would bring.
Kathy--- There are many 'unfair' things about living in a condo society, but that was our choice. We do have excellent fire, police and library services available. Although we pay for landscaping and snow removal services from our monthly fee, the streets, driveways and sidewalks are attended to immediately after any snowfall and the lawns are cut and shrubbery trimmed as needed.
Many people go into a condo or HOA acting like they are tenants rather than owners. Too bad that most owners will force the few responsible owners to do everything. As a Realtor, I try to discourage anyone from purchasing a condo. Too much risk when your investment relies on perhaps 200 other owners doing the responsible thing and paying their fair share.