Residents of condominium and home owner association properties are often surprised when they get a notice of a "special assessment." Special assessments come about because of the need for emergency expenditures arising after a catastrophe, or because the management of the property did not properly budget for repairs and replacements.
This article from Realty Times outlines the budget process; something that should be understood by you, the #homeowner.
HOA Pencil Sharpening: Crunching the Numbers
Now is the time when most homeowner associations count last year's costs and crunch next year's numbers hoping to squeeze blood out of a turnip. Often it's so dry, there isn't even any turnip juice left much less any O positive. But crunch you must. Here are some of the ways to make the cash flow more freely.
Adjust by Inflation. This is a no-brainer. Check the area Consumer Price Index - CPI and raise all budget items by at least that amount. An exception is utilities which often enjoy a larger rate increase based on the utilities the utility companies expect not to sell added to the cost of maintaining antiquated power generation plants plus a fudge factor they hope to slip by the utility rate commission (a bit of budget humor).
Add a Contingency. A contingency is 5-10% of the total budget which is used to either cover all those things you forgot to include or could not foresee.Continue to the full article for more items. Hope you find it helpful.
For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
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