Same I would love to know!
Dear Pay Dirt,
In June, after years and years of renting, I finally saved up enough (and improved my credit score enough) to buy a small condo. It’s wonderful, two-bed, two-bath. The location and price were exactly what I wanted. The condo fees to the management company were low and the whole monthly payment was less than what I was paying in rent. I was able to get back to saving money and even splurge a little on myself and my son.
However, in September, the condo association announced a “special” assessment for the roof. It caught multiple people, myself included, completely off guard (there had been about four other condos bought this year). My portion of it is almost $600 a month for five years, bringing this affordable place much higher than what I was paying on rent. In fact, if it had been for the fees when I was looking, I would have passed. I was informed during the inspection that it looked like the roof had another two or three years to it. I have an option of making a lump sum payment but that is way out of my price range. It was also announced that because of the way the roof and the building are shaped while two-thirds are getting done now (neither over my direct apartment), likely by the time we finish paying off this assessment, they’ll just do another. This was after I was told by the owner that they hadn’t had any special assessments for years.
I understand that if this was a house all the roof costs would fall to me, but I feel like I might have had better options. I had no say in who was chosen or what price was going to be charged (this was all done before I moved in). In the past few months, I’ve used up all my savings and am now back to cutting back on all the “fun things” even if it makes life more difficult. The whole reason I bought the place was to cut down on what I was paying! Someone suggested taking the lump sum from my 401(k) and then paying it back. I’m not sure how I feel about that. And I don’t think I have enough equity in my condo to pay for a home equity loan. What are my options here? Do I cut my losses and try to sell it even though I won’t then have enough money to buy anything in my area? Do I borrow from my 401(k)? Do I just spend the next 10 years not enjoying much of anything?
—Now Not Saving
Dear Pay Dirt,
I am a recently divorced mother of a 14-year-old who is struggling with his mental health. We are at the point of investigating hospital-based interventions (intensive outpatient, partial inpatient, etc.), the cost of which could be as much as $15,000-$20,000 out of pocket if I don’t run it through insurance.
I work for a very small family-owned company and their insurance plan is self-funded. This means the company pays directly out of pocket for any claims incurred. Because of this, they see all actual costs. I’m not sure about the level of detail they get (e.g. the provider, services provided, etc.) but they very definitely see each person’s total claim costs. While I’m fairly certain it’s illegal and very certain that it’s immoral, I know for a fact that the controller looks at these costs and actively advocates terminating our older employees with high healthcare costs. I worry for my job if I were to submit this level of claims, especially if they’re able to tell that it’s for mental health, which can be chronic and need ongoing care, rather than an isolated catastrophic illness or injury.
My parents are very comfortably retired and each year gift their three children the $10,000 maximum cash gift that is allowed before triggering taxes. Half of that has already been given and spent this year. I expect the other half at Christmas and had it earmarked to take the pressure of monthly bills and start rebuilding my non-existent post-divorce savings. I am thinking of asking them if they’d be able to pay for his hospital services, which I’m certain they can do comfortably. My question is whether or not they can do that without it being considered a gift for tax purposes. To be clear, they’d be paying upfront for services, not gifting me money to pay the already accrued medical debt. (Even if I do eventually decide to run it through insurance, the out-of-pocket costs will still wipe out my savings.)
—I Wish I Could Worry About My Son Instead of Money
and
Dear Pay Dirt,
I am in my early 30s and facing many of the same problems as other millennials—student loan debt and an impossible housing market. I currently rent a room in a townhouse and am in graduate school so my loan payments are deferred, but I am also accruing more debt for my master’s degree. I am ready for a place of my own but feel overwhelmed at the thought of taking on a mortgage, and unsure of where to start. At the same time, my mother is considering selling her house, which is in a very desirable neighborhood in our city, to buy a new place with her boyfriend. Her house is small, only has one bathroom, and is livable but needs a lot of work done. We think that if she sells it, it’s likely that someone would tear it down and build a large house on the property, which is what has happened to many of the older houses in that neighborhood. I would love to buy her house and borrow extra in order to renovate it. How would we even go about doing this?
Neither one of us is wealthy, and my mom needs to get as much money as possible for her house but also isn’t interested in pouring money into it before selling. This is all complicated by the fact that my mom still owes money on the house, and also has parent PLUS loans that my sister and I will need to take on so that my mom can retire. I also want anything we work out to be equitable to my sister, but I don’t know exactly what that would look like—my sister lives in another state and has a house, and is fine with whatever we do as long as my mom gets what she needs financially to be comfortable. Where should we start to figure out if it’s possible to do this in a way that would benefit all of us? I grew up in this house and would love to turn it into my own place, but I’ve also watched my mom struggle to pay for everything and keep up with maintenance and repairs, and I’m terrified of getting in over my head.
—Treading Water
My answers and more over on slate
Also people that have owned condos - people are soliciting costs of roof repairs in the comments because we think this LWer’s HOA is suss
9 Likes
YIKES. The roof thing is why I roll my eyes when people say renting is throwing away money.
6 Likes
Exactly! When I was thinking about buy circa 2015-2016 and looked at a few condos (it’s really the only things in my price range) one of them was smaller standalone houses built on a collection of lots and had a $350 HOA run by a professional management company - with no parking spot, no common spaces, and it didn’t cover maintenance for the exterior of the buildings. All it covered was some landscaping and insurance on the grounds.
Seemed like the HOA management company was a really good scam to earn money, really.
4 Likes
Do they say anything about the number of units anywhere? That seems awfully high for condos in a single building which is what I take from ‘roof shape’…even laid out the way my association is, with a couple dozen buildings with only a few units apiece, I haven’t seen roof replacements run that high. Of course, I’m also in a place where 30-year roofs don’t always make 10 and it’s generally a matter of which hailstorm triggers the insurance claim, so I’m probably slightly biased. Unfortunately I’m travelling for the holidays and the drive my HOA stuff is stored on isn’t network accessible, but I can try to dig it up when I get back if that’s helpful.
1 Like
It doesn’t I was trying to wrap my head around it with the information available. Let’s go with the most expensive situation I can imagine and say this is a listed building in New York City, and part of the cost of repairs is paying to block the sidewalk, permitting, and for special masonry people for old brick where the roof conflicts with the facade. But if five people moved in last year… unless there was 100% turnover, let’s say it’s a 10 unit building. And perhaps actual repair costs are slightly lower overall and the condo association is charging slightly more than actual costs to spread it payments vs lump sum.
That would still be over $300K to repair PART of the roof…and having NO reserves to cover what is usually an anticipated repair. It just seems hard to understand. I guess there’s a realm of possibility where it is believable (like if it is in a natural disaster zone or a super special roof), but I’m hardcore suspicious of this condo association. I have a feeling the HOA president has a roofer in the family.
I hope there’s a viable seller disclosure case or a title insurance claim possibility for the LWer because this sounds suss as hell.
4 Likes
I also was wondering like roof replacements are probably expensive in a massive tower, I would assume there would be far more units and therefore the cost per unit would be lower. Maybe if a bunch of units are unsold and the builder still owns them and maintains control of the HOA?
But that’s hard for me to believe if the tower has been around long enough for a roof replacement, and through the wildness of the 2020+2021 housing market they would have such a high unsold rate.
2 Likes
I’m currently renting in a condo building and just learned that they’re adding a mind-boggling $75,000 assessment per unit to fix drainage issues. Thank goodness it won’t affect our rent! The building is an industrial conversion, 35+ years old, with about 90 units. I don’t know all the details, but it seems like major repairs can blindside condo associations/HOAs because it feels all-inclusive, but infrequent major repairs can throw the whole plan off. In a single family home you have the same repair expenses long-term, but at least a little more control/independence on when & how to invest in maintenance.
On another note, I followed a maze of Slate links from this column and ended up at a recommendation to put your toddler to sleep in a memory foam dog bed. No judgment but it did crack me up 
.
2 Likes
I agree with that…but this is a roof replacement. This is literally what the HOA reserves are supposed to be for. The $35,000 for a roof PER unit means they have nothing in reserves.
6 Likes
It would be bad management and bad planning but not surprising! And board members are usually not building professionals, so it’s entirely possible they wouldn’t have caught this either.
3 Likes
I love how confidently it was recommended too
Yeah, our HOA reserves study each year outlines things like expected roof replacement and other things. We were provided all HOA materials during escrow but people seemed surprised we wanted everything and it took longer than it should have to send it in over.
Even with a well-run HOA our costs have gone up $100/month since moving in to less than two years ago. There have been some unexpected street repairs, pools repairs, etc. The price of our landscaping company went up and the water company raised rates substantially.
FWIW my condo association is 70 townhomes in 7 distinct tracks of homes so the set up of doing some roofs first and then others later would definitely make sense here. But, I agree the cost is too high. And if this was decided and signed off on before she bought then it definitely should have been disclosed. Otherwise she should have been able to vote on a special assessment?
2 Likes
Well, I think they said “condo fees were low”, which suggests to me that they were artificially low for years and actually don’t have any reserves. My aunt lived in a smallish complex for decades and their fees were really low and basically major maintenance got deferred for a long time… and a few years after she moved in they got hit with a big special assessment because they needed to replace all the roofs and also repair water damage that had been caused by the leaking/faulty roofs. I think it was like 20k, and that was 10 or 15 years ago. (It was roof replacement plus exterior wall repair. A number of people in the complex (not her) could not afford it and could not get the funds (I’m not privy to what they tried) and had to sell.)
I’m not saying there isn’t something suss about the HOA and also I didn’t read any comments on Slate, but I’m just saying it’s also possible they don’t have any reserves.
I caution anyone looking into a condo that really low fees are a warning sign, not necessarily a good thing.
6 Likes
I’m wondering if there’s a possibility there’s a professional management association for the HOA, or the building is still majority owned by the builder? THINGS FEEL SUSS HERE
2 Likes
This is a great point. We backed out of buying a condo with low fees once we realized how much deferred maintenance there was. It was a smaller complex and one person owned 55% of the units as rentals so he essentially controlled the whole building.
My HOA has a lot of drama but ultimately it’s well run by people I mostly trust. That’s definitely not universal unfortunately.
2 Likes
Even if there’s no reserves for an expense that is predictable - I’m still curious about how the $36K per unit was arrived at. I was trying to puzzle through what the scenario is. All we know is the price, it isn’t the full roof, and that five new owners moved in this year. So we assume >6 units.
What do we think could cause a roof to cost this much?
maybe it includes extra for reserves?
3 Likes
My HOA is run by a management company (…which of course increases the fees) but we still have owners on boards and committees. Not sure if it’s a CA thing that we’ve voted on special assessments? We didn’t get a say in the fees going up another $35/month starting in Jan 
3 Likes
Yeah I don’t know about that - 36k seems like a lot. Then again, 10 (ish) years ago it cost us about 10k to replace part of roof (on a house) in the Bay Area, so 
I don’t know the going cost of roofs in HCOLs (if it even is in an HCOL).
2 Likes
That seems insane. That’s, what, 36,000 per unit?!
When we had our condo, I think the special assessment for the roof was $200-something a month for 2 years. This was in, what, 2014-ish though.
This just in from my condo management office:
Residents are not permitted to feed any type of wild animals including but not limited to birds, seagulls, ducks, hedgehogs, opossums, raccoons, feral cats, or any other non-domesticated animals that are not registered with the Management Office. Residents/Owners who are found in violation will be subjected to immediate fines in accordance with Article II, Section B of the Community Rules and Regulations, per the amendment adopted at a duly called meeting of the Board of Directors on the 26th day of January, 2021.
Who’s feeding the possums?! And how dramatic was the board meeting when this rule was passed?
11 Likes