Annual Assessment Time!

As the New Year rolls through our neighborhoods, replacing sparkling lights with Broncos flags, with newly resolved joggers in the street and dead trees curbside, many people will also be facing another seasonal inevitability: the arrival of an annual assessment bill from their homeowners or condominium owners association. Assessments aren’t a mortgage payment, nor are they a tax or water bill, but—to the unprepared—they can bring the same sinking sensation and budget-busting problems.

This leaves many association members wondering what assessments are for. In a condominium, they are an obvious part of the deal. Assessments are needed by a condo association for things like repairing the roof, mowing the lawn, or shoveling the walks. In a single-family-home neighborhood with a homeowners association, the association’s role is similar, but less obvious.

Basically, an association will help protect individual home value. These days, this is more important than ever in Idaho. Homes in neighborhoods with nice amenities, such as pools and parks, have a better chance to sell. If an owner has an efficient, active association, it can be a great selling point and help keep their home value stable. However, these amenities and activities cost money to keep up.

Even in a neighborhood with minimal common areas and features, the association’s role is crucial. The association may be fighting to keep those newly bank-owned properties down the street from becoming weed-choked eyesores. It may be trying to keep a neighbor from using her property in a way that will drive down your home value and scare off potential purchasers. Without assessments, an association will wither up and die.

An owner in an association may think that the property value-enhancing reasons for paying assessments don’t add up this year. Maybe they ran up the Amex bill for Christmas, or perhaps they got off on the wrong foot with their board last year… Despite any of these situations, consider a few significant reasons this owner may need to review their title documents and re-evaluate where paying your assessments should fall on their budget priority list.

An association is obligated to collect assessments, along with doing its other duties; even in a tough economic climate, an association must keep doing its job. The bottom line is, if an owner doesn’t pay their assessments, his neighbor will have to pay more in order for the association to continue functioning. Also, there are legal enforcement mechanisms written into most declarations of covenants, conditions, and restrictions. Not all of these are simple fines or loss of privileges like a pool key. Most associations have the right to take a delinquent owner to court to collect their assessments, adding all court costs and lawyer fees to their total bill. Under Idaho law, a board also has the right to lien the property and even foreclose on it. While this is very rare, the law underscores how important assessments are.

So, whether an owner keeps up on association requirements and knows their CC&Rs like the back of their hand, or they have never attended a neighborhood meeting or even read the documents recorded on their home’s title, they must pay attention to assessment bills and pay them promptly. If an owner owes a large sum and is unable to write a check for the amount in full, it is highly beneficial for both parties to at least set up a payment plan with their association. Once done, the owner will have a healthier community and a happier new year! For more information on assessments or to speak with a lawyer knowledgeable in all aspects of HOA legal issues, visit idahohoalaw.com.