[Hobie]

At least put the property in a trust.  It is a cakewalk for your kids to deal with after you are gone vs. probate.  Probate forces a judge to try to figure out your intentions.  And your kids will have to pay an attorney to deal with it.  Ain’t cheap… especially if it gets complicated or contested.   Do anything to avoid probate!

Trusts are easy to change during your lifetime.  One thing to consider are the future spouses of your kids.  They can be a problem if, say your 3 kids are equal co-owners of a property.  What happens if at that point your own kid passes and the other kids become partners with a ‘disliked’ spouse.   The trust can spell out and clarify the what-if’s.  How well do the kids get along with each other and handle their own finances now?  How about setting up some kind of college fund for future grandkids?  Trust can do that.

Personally, I feel it is better to spell out as much as possible your wishes.  It does make it easier for the siblings to proceed when you pass.  ie.  must sell the house within X years, favorite art piece goes to X and it also designates someone to be the ‘boss'( trustee)  to oversee its execution.

Might be worth $3k if the atty really knows family dynamics and asks those kind of questions during pre-interview and you have a million questions.  Otherwise a $1500 atty to write it up if indeed you have a very simple estate.

And, don’t forget to fund the trust.  ie.  re title the property into the trust name.  Otherwise it is not valid.

[Hobie]

So glad to hear from AN and Coronita again!!    Not necessarily people moving not being able to buy.  Just like EP did, people are simply cashing out and moving to cheaper area.  They have extra money to help their kids buy a home.  Plus the public education system is also driving people away.

[Hobie]

Tenant does have renters insurance ( required in my lease ) in which I could pay the deductible and it would cover the relocation expenses.  However,  I was wanting to keep tenant happy.    My plan is to cancel rent for the affected days plus pay hotel, daily meal per diem.

[Hobie]

You say the building has some issues.  What are their reserves?  This might be the reason the bank is concerned re rent/owner ratio.  Even if you pay cash, if the whole complex needs a roof or plumbing, etc. you might be in a situation where there is not enough owners liquid enough to pay for it.  ie. special assessment.

[Hobie]

.

[Hobie]

So true SDR re grandparents and high entry vehicles. Minivans are perfect for that age plus the little kiddos. Good post. He is exactly on point as this is a real issue when (grand) parents get older.

[Hobie]

Flu: Very funny re trophy wife post! So true!

[Hobie]

Ahh yes, your post only brings back memories that I should have purchased Price Club back in the day. I still have my original Price Club Card!

[Hobie]

Is your search just for investment or are considering moving to a space with more room for your family? If kiddos, are you looking at the schools?

[Hobie]

There are a lot of new grads trying to get started with a family. Even with dual incomes the high cost of housing in SD is tough for them to get started.

Alternatives out of state are looking good as they can swing a house on one income so the other spouse can be a stay at home parent.

I appreciate EP’s continued input.

[Hobie]

[quote=Coronita]I think credit card companies are going to have a field day.[/quote]

Followed by a Government bailout. Anyone know the average credit card balances over the last year? Lots of people must be floating more credit card debt as they don’t have the cash flow to keep up with current cost increases.

[Hobie]

Most likely the 10% should be in your original CCR’s. That is the amount assessments can be raised without 2/3 +1 majority of members. ie. just a board meeting vote.

If they have done reserve studies in the past, then there should have a separate reserve account. 2 Accounts, operating and reserve.

Self managed associations are not a bad thing, but may not be up on the, ‘big picture’. My suggestion would be to take a look at what was included in your old reserve study and there will be a dollar amount for each year to be in the bank. Open a new bank account for that amount and separate operating expenses from reserve expenses.

Sounds like no one really cared that much and simply paid for some things outside of a common area expense. ( deck repairs )

If you are businesslike and present the facts that you are underfunded for common area upkeep, you can probably up the monthly assessments to be more in line with actual future replacement costs.

Definitely do not need to spend $ on legal or management. Just show other owners they have ‘overlooked’ some area and we are going to deal with it now.

[Hobie]

Reserve studies are just estimates. In these times of inflation and high construction costs you would be prudent to get an more accurate estimate for roof replacement. Then approach the board and decide if there is enough reserves to cover it when it is deemed necessary. Depending on the roofing material, guessing flat roof with tar and asfault, you may be approaching its end of life.

Technically, the reserves should be funded to pay for replacement per the reserve study without a special assessment.

Have you been using the same reserve study people? Maybe it is time to use someone new and ask for a full in person (level 1??) review and do not provide them with anything from past review companies. Reserve study folks tend to base things on past reviews. Easier for them.

Sounds like you actually have a well run association. Nothing wrong with pointing out some areas that need a bit more $.

Final thought. Yes, annual budgets are net zero. You are actually supposed to collect and spend and not make a profit nor incur a loss. In practice some years you may go over budget just because. Trees need more trimming, pool equipment gets abused or doesn’t last as long as expected. I’m looking at you pool pumps and filter cleanings!!

Termite tenting is often overlooked and may not be in reserve study. Some think this should be covered in operating account. Several thousand dollar cost, I think should be reserved for.

Nothing wrong with beefing up the reserves. Not only roof, but spa refinishing is getting expensive. So, it sounds prudent to up the assessments a bit earmarked specifically for reserves. People tend to be more compliant if they feel they are getting a benefit.

I didn’t mean moving up dues every year. That pisses people off. Do a one time increase. Not huge but back it up with data ;). Better to keep assessments same (politically) for several years.

[Hobie]

40 year old complex with maybe a couple of original owners on Board. A couple of owners who paid for their own deck maintenance. Does everyone pay their dues?

I say you are revving up to be shunned by your neighbors. Management co’s are no magic pill. Same with updating CCR’s for such a small association.

Those who have already paid for their own units repair will resist paying a special assessment to fix everyone’s else deck. Yes,they are legally bound, but unless you find an atty to work pro bono, the association does not have any $ to enforce. And the newer owners who paid will be pissed if there is not enough collected to fix their unit- and you will become the villin!

Keep in mind, having a reserve account funded to 60-70% or greater will really be helpful if you someday want to sell. So many condos are underwater with people not paying dues that reserves are seriously underfunded and makes it hard to sell if major repairs are being deferred.

Rather than make them spend a bunch of the reserves, look at this as where you can do your own thing (unfeddored). ie. fix your own deck and when you sell, the reserve account looks good, there are not legal actions pending, and your monthly assessments are low.

Recent appreciation is paper profits and what you are proposing affects cash flow of each owner today.

However, if you work with your other owners, you might get them to increase the dues and put together your own plan of increased maintenance.

[Hobie]

Time is of the essence. Either sign up with gzz or send a certified letter demanding a refund and stop order. ( for non-performance since date signed contract ) If they order the product, you are poxed.

[Author]

Posts