Aspen affordable housing HOAs face capital reserve issues
October 6, 2009
ASPEN – Homeowners within the Aspen-Pitkin County Housing Authority will face challenges in the future as their properties age and heavy investments will be required for upkeep.
That’s why the authority has hired an attorney to help homeowners associations weed through the complicated processes of building capital reserves and how to collect assessments.
Of the 80 or so HOAs in the housing authority’s inventory, most don’t have adequate capital reserves to pay for major repairs and renovations to their buildings.
Just one example is at Centennial condominiums, where the owners of the 92 units are facing an estimated $3 million repair bill. The HOA’s capital reserve will cover nowhere near that, and the city government is now contemplating helping them with a special taxing district.
There are many more HOAs that will face the same situation unless they act now, said Housing Director Tom McCabe.
“It’s their biggest investment, and it’s smart that they take care of them so a special assessment down the road doesn’t break their back,” he said. “Homeowners cannot duck their responsibilities.”
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Molly Foley-Healy, an attorney with HindmanSanchez P.C. in Denver, along with Loura Sanchez, managing partner, will present information at their third and final seminar on Wednesday about how HOAs can collect assessments and build their capital reserves.
“This particular seminar will focus on the obligation of homeowners to pay assessments, the obligation of boards to collect assessments, the importance of governing documents in collections, and the legal options available for collection of delinquent assessments,” said Cindy Christensen, housing operations manager.
The authority contracted with HindmanSanchez for $2,400 to hold six seminars, as well as review HOAs’ covenants, conditions and restrictions.
“They are helping us understand as a community the rights and responsibilities of homeowners,” McCabe said, adding the analysis should be complete and given to the housing office by the end of this month. “It brings these issues forward faster than they would otherwise.”
Foley-Healy said she is creating a “frequently asked” document concerning HOAs, like their obligation to pay assessments, and issues surrounding insurance and maintenance of common areas.
As a result of the first two seminars held, McCabe said he has noticed that homeowners’ interest in controlling their own destiny has peaked, and they are asking more intelligent questions.
Foley-Healy said about 70 people attended the last seminar. The seminars are geared toward homeowner association board members but individual owners can attend.
A citizen-based task force called the Housing Frontier Group is expected in the near future to make a request that the housing authority hire an outside firm to have all the capital reserves for HOAs in its inventory assessed.
Wednesday’s seminar will be held twice; the first session will run from 11:30 a.m. to 1:30 p.m., and the second will be held from 5 p.m. to 7 p.m. Both sessions will be held in City Council chambers at City Hall, 130 S. Galena St.
Each attendee will be provided with a model collections policy that can be customized for their association.