November 3, 2025 • 35 mins
How one HOA Board managed a $2M Special Assessment with strategy, transparency, and teamwork.
✅ Is a Reserve Study right for you? 👉 https://www.reservestudy.com/
A small 18-unit HOA faced a $2 million special assessment that could have divided the community. Instead, their HOA Board turned it into a story of planning, transparency, and perseverance. Terri Rene and her team tackled severe exterior damage, owner resistance, and financing challenges while keeping their community united. This episode breaks down the real steps they took: assessing damage, budgeting under pressure, preparing for non-payment risks, and maintaining communication at every stage.
Chapters
00:00 How did this HOA Board handle a massive special assessment?
01:13 Who is Terri Rene and what makes her an HOA Board Hero?
05:11 How did the $2M special assessment come about?
07:28 What compromises did owners make to fund this project?
09:17 How did the Board plan for non-paying owners?
11:18 What led to the need for such a large assessment?
13:05 What did early inspections reveal about structural damage?
15:01 How did board turnover impact project leadership?
16:39 How did communication rebuild owner trust and support?
20:44 What strategies helped the special assessment finally pass?
22:49 Ad Break - Association Reserves
23:21 How did the HOA manage budgeting and owner voting?
25:50 What steps were taken to prepare for construction?
27:24 Was the project on budget and on schedule?
30:11 How will this project impact home values and the reserve fund?
32:59 What lessons can other HOA boards learn from this experience?
The views & opinions expressed in this program are those of the Hosts & Guests, intended to provide general education about the community association industry. The content is not intended to provide specific advice or recommendations for any individual or organization. Please seek advice from licensed professionals.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Terri Rene (00:00):
We needed to consider that there would be a
certain percentage of owners whowould be unable to make the
payments. And we had talked alot about, how are we going to
handle that? Because you can'tgo into a contract commitment
without the money that you needto pay the contractor. We needed
to discuss that. And I told themthat, you know, while I hoped
(00:23):
that everyone could afford it,we may have one or two, a 10%
was sort of my rule of thumb tothink about. We're not going to
collect so let's do the planningand be prepared for that, even
though they aren't necessarilysaying that right now,
Announcer (00:43):
a regular highlight of the HOA insights podcast is
our board heroes feature, wherewe dedicate one episode each
month to celebrate theremarkable efforts of HOA board
members to us a board hero isone of the 2 million elected
volunteers who deserverecognition for excelling in a
role that often goes unnoticed.
Today, we're excited tospotlight one of these
exceptional board heroes andshare their inspiring story. If
you match our definition of aboard hero, or know someone who
(01:06):
does, please reach out to us.
Our contact details and those ofour sponsors are provided in the
show notes. Welcome
Robert Nordlund (01:13):
back to HOA iInsights
Common Areas. I'm RobertNordlund, and I'm here today for
episode number 130 with anotherone of the board heroes, we're
proud to celebrate. Terry Reneehas been a board member off and
on for 15 years, and is one ofthe original owners at her 38
year old, 18 unit condominiumassociation in the beautiful
(01:34):
Pacific Northwest. As a regularpodcast listener, she reached
out to me, taking me to taskwith how many aspects of being a
board member we had not yettouched on the podcast,
including and get your fingersready, such things as people
skills, networking, negotiating,arbitrating, facilitating,
training, coaching, mentoring,cash flow analysis. I've got a
(01:58):
list here the association's rolein mortgage qualification for
prospective buyers. And just aside note here, stay tuned for
Episode 133 coming up in just afew weeks, maintenance, planning
and board performanceevaluations. And that's probably
not a complete list. Clearly,not a person who is shy about
(02:18):
sharing her opinion. But so ofcourse, I thanked her for the
list, and of course, then askedher to join me on the program so
she could tell her story. Andthe story that she's about to
tell is going to be huge, andthat's because she's going to
talk about $100,000 specialassessment for homes that were
(02:41):
in the range of $300,000 invalue, and they passed that just
last year. So stay tuned. We'regoing to hear from Terry Moore
about that story in just aminute. But first, I hope you
enjoyed last week's episodenumber 129 with regular co host
and insurance expert KevinDavis, seeing the world through
his eyes as a leader in thecountry's largest DNO insurance
(03:02):
provider. We talked about theadditional risks and challenges
faced by an aging population ofassociations, and every day,
every association is getting aday older, like sand in an
hourglass. Those challenges aregoing to be evident as we get to
Terry's 38 year old Associationstory. So this is real. Now, if
(03:23):
you missed that episode withKevin or any other prior
episode, you can find them onyour podcast website, on our
podcast website, Hoainsights.org, on your favorite
podcast platform, or on ourYouTube channel, but better yet,
subscribe to the podcast inorder to get every episode
delivered right to your phone ormobile device. Those of you
watching on YouTube can see themug that I got here from our
(03:47):
merch store. I like the cartoonthat spoke to my heart. And you
can browse through that merchstore from our Hoa insights.org
website or the show notes, andyou'll find we have plenty of
free items there, like boardmember zoom backgrounds and some
specialty items for sale, likemugs, but I'd like to give you a
mug for free. So go to the merchstore, download a free zoom
(04:11):
background. While you're there,look around and find the mug
you'd like. And if you're the10th person to email me at
podcast, at reserves day calmmentioning episode 130 mug
giveaway. We'll ship that mug toyou free of charge. Well, we
enjoy hearing from you, and mostepisodes are in response to a
topic you've recommended. Sostay in contact, like Terry has
(04:34):
done, letting us know whatquestions you have, criticisms,
constructive criticism, ortopics that you like to hear
more about. So leave a voicemailat 805-203-3130, leave a comment
on the YouTube video or send usan email at podcast at reserves.
Day calm, but back to today'sepisode. Yeah, the numbers I
(04:57):
said were right. Uh, Terry, um.
Let's start out by telling ouraudience exactly how big of an
assessment you passed in 20 $24per unit, and how much the units
were worth and how much yourpersonal share was Well,
Terri Rene (05:11):
thank you, Robert, for having me on your show. Our
owners approved a $2 millionspecial assessment for a large
exterior renovation project thatworked out to be an average of
100,000 per unit, but it variedsubstantially from this based on
different allocations of ownerinterest. The average market
value was close to 300,000 perunit. Yeah, my share 150,000 I
(05:37):
happen to own two of the units,so I'm getting the lion's share
of everything
Robert Nordlund (05:42):
here. Let me slow you right down there,
because, okay, here you are.
Were you the board president atthe time, or just a board
member? I had
Terri Rene (05:50):
been off and on the board for a number of years, and
as my career budded, I needed tostep back. The board was very
consuming business. I wasn'tpaying attention for a good
period of time there about 10years. So during that time,
things evolved or devolved,evolved. Look at it
Robert Nordlund (06:12):
well, but for the special assessment. During
the time of the specialassessment, were you the board?
President,
Terri Rene (06:18):
yes. President and Treasurer, yeah.
Robert Nordlund (06:21):
Okay, so I find it interesting that, okay,
you're here and you're pitchingthis big special assessment, and
you are effectively bellying upwith the largest bill your own.
And so you are, you are stickingyour nose right in it and saying
that, Hey, folks, I believe init enough to put 150 grand into
(06:44):
this. A lot of you are going topay less, but that really
exposes you as a believer, andyou are believing hard if it's
going to cost you 150 grand.
Terri Rene (06:54):
Yeah. I mean, everybody has different
abilities, financialcapabilities, and so I feel
blessed that I was able to dosuch a thing. Make no mistake,
there were compromises I had tomake, and that's something that
I had to really explain toowners when we were doing this,
was that everyone, no matterwhat your financial status in
(07:17):
this is, is affected you'remaking compromises. You're
making choices. Things arechanging in your life. It's a
life changing amount of money.
Robert Nordlund (07:28):
Oh, yeah, that's clearly, and we're
talking before the program. Itsounds like it's a beautiful
place, water waterfront, orwater view,
Terri Rene (07:38):
yeah, waterfront, one of the buildings has all the
water view. There's a buildingin the back with more cityscape
Park views, still nice, but
Robert Nordlund (07:49):
people bought there because it's a beautiful
place to live, and it wasprobably priced appropriately
for their budget, and they fellin love with the place they buy
the place just like the averageI think homeowner buys a home
because they think this is whereI want to live. And to find out
that not just the Oh darn I needa new roof or Oh darn I need a
(08:14):
water heater. We're talkingabout, oh darn we need a whole
lot of money here, right?
Terri Rene (08:21):
You and I were talking before the show, people
come to associations for a lotof different reasons, and we
certainly had some owners whowere trying to make profit flip
a unit. There were some rentalshere. There's different
motivations, purchasing, butdefinitely the location and the
(08:42):
views peaks interest for allpurchasers.
Robert Nordlund (08:48):
Yeah, yeah.
Okay, well, good. You know thatit's nice to be able to drive
home from wherever you go andyou say, I'm home. I like it
here, and that's just awonderful thing. Hey, tell me
when it came to the reality ofwe're going to jump around a
lot, because I have so manyquestions when it came to the
reality of 100,000 ish specialassessment, were there some
(09:12):
owners that just bailed anddumped and sold and left?
Terri Rene (09:17):
Yeah, that was something that I had to take
into consideration in workingwith the board to develop a
strategy for such a largespecial assessment, we needed to
consider that there would be acertain percentage of owners who
would be unable to make thepayments. And we had talked a
lot about, how are we going tohandle that? Because you can't
(09:38):
go into a contract commitmentwithout the money that you need
to pay the contractor. We neededto discuss that, and I told them
that, you know, while I hopedthat everyone could afford it,
we may have one or two, a 10%was sort of my rule of thumb to
think about, we're not. Tocollect. So let's do the
(10:01):
planning and be prepared forthat, even though they aren't
necessarily saying that rightnow, let's plan it that way.
Robert Nordlund (10:09):
Okay, did you end up getting 18 people paying?
Terri Rene (10:14):
No, we had a couple units. We have unpaid
assessments, or we're
Robert Nordlund (10:21):
going down different Yeah, so it came true,
all right, so we're not good,good job of estimating. Will
that be something that you havestarted the is it in the pacific
northwest of the is it theforeclosure process? So they'll
hopefully get the associationsmoney out of it,
Terri Rene (10:40):
right? So it runs range from payment plans to
foreclosure, and you go throughthat process with your
attorneys, and it's somethingthat you have to wade through
over a great period of time, soI'm not at liberty to discuss it
that range of detail.
Robert Nordlund (10:57):
Good, okay, good for you, because it I've
tried to not say what state wehaven't said what body of water
we're trying to be careful as wedance through this topic here.
But okay, so we've got $100,000ish special assessment. How does
that come about? What led tothat? This
Terri Rene (11:18):
is my story. So I'm an original owner. So watched
this thing develop since my late20s, when I was rather naive. I
think we all are home ownershipgoes and I didn't sign blindly.
I read all the contracts, butfor decades, a majority of our
owners didn't want to raiseassessments and supported
(11:41):
inadequate board budgetproposals. I would include
myself in that at a young age. II didn't have a concern about
it, so I wasn't, like,rejecting, yeah, that's a future
problem notion, right? For quitea while, then we were a brand
new building, I mean, startedout so you kind of like, you're,
not concerned about a lot ofthings, correct? There was a
(12:04):
trend of repeated water leaksover time, though, through
windows, doors and decks. Andwhen the signing was 30 years
old, and the board advocatedadding 20 more years to its
useful life, a few discerningowners, including myself, time I
wasn't on the board, insisted onhiring a building consultant for
(12:25):
invasive inspection.
Robert Nordlund (12:26):
So at this point in time you're not on the
board, you're just an owner whoappreciates 30 years is 30 years
if it's 38 years old. Now that'seight years ago. So this is
before Champlain tower south andso you and some other owners, we
Terri Rene (12:42):
use that as an example of what you know, worst
case scenario. Yeah, we talkedabout it when it happened. We
were going through pros of thiswhole thing,
Robert Nordlund (12:53):
yeah, but so eight years ago, you and some
other owners convinced the boardto spend some money and get a
thorough or a substantialevaluation.
Terri Rene (13:06):
Yeah, they did samples of the building, seven,
seven areas, and random andtargeted to try to get an
understanding of the conditionof the building. They found
hidden damage to the wallshooting and recommended siding
window and sliding doorreplacement, or did not accept
this recommendation and sawadditional opinions to justify a
(13:29):
continued patch and repairstrategy. Okay?
Robert Nordlund (13:32):
Now again, this is not a surprise. This is a
story as old as communityassociations, new owners, new
building. Future deteriorationis not our problem. Let's just
go, go, go, go, go. And then theboard gets some bad news, and
the board, again, I want to sayclassically, says, Oh, it can't
(13:54):
be that bad. They must be crazy.
There's got to be a differentway. And you know, your story is
your story.
Terri Rene (14:00):
Things began to deteriorate rapidly, and our for
becoming unsafe. Tower boardsold their units during a peak
real estate market in 2020, ah,good owner finally elected to
the board, and that changed
Robert Nordlund (14:16):
everything.
Okay? So I'm gonna slow youdown, so the board that had been
resisting says, Oh, gee, we dosmell trouble here. They started
to get the flavor of it. Therethey go. Finally, so you and the
other owners convinced the boardto get a structural or moisture
evaluation, and the truth ofthat started to come out. And
(14:37):
the board said, we're not up forthis challenge. We're not for
this financial problem, andliterally sold and left. Hoa,
okay, but what is it? Changepresents opportunity. I see that
in business, and you saw that atyour association, where you have
five leaders go and all of asudden, that creates an
opportunity for you forleadership. Whoa. Orange. Okay,
Terri Rene (15:01):
good, good, good.
They did a good job of keepingme out of there, even though I
was trying to help them, I geton. I, you know, made myself
available, and they wereresisting. They were very, very
big opponent here. But it tookseveral more years before we had
a board majority ready to committo a special assessment of this
size for owner pool, there wasquite a bit of board turnover,
(15:21):
and at one point we were down toone board member, me and I
rebuilt.
Robert Nordlund (15:31):
I need to absorb that. Okay, so how many
five board members at theassociation out of an
association of 18? Okay, strongsized board. I've heard of
smaller associations have boardsof four or three, but you had a
board of five and the board'sgone. You get new board members.
(15:52):
You have some board membertransition, some short term, I
don't want to say short termfailures, but yeah, short term
transitions. And so for a periodof time, it's only you and
you're holding on tight, tryingto keep the ship from sinking.
Terri Rene (16:07):
I stand on task. I rebuilt the board from scratch,
being careful to recruit adiverse group of owners ready to
tackle the issues. First thingwe did was hire a new management
company, since our priordysfunction had burned through
two companies. Okay? Nosurprise, our new board faced up
to the realities of a crumblinginfrastructure, and they were
(16:27):
determined to deal with ownerfear and shock with empathy and
understanding. Nonetheless, anowner petition was circulated to
garner support for rejection ofthe special assessment.
Robert Nordlund (16:40):
This is no surprise. When associations are
going through turbulent times,often the management company
gets tossed out in the wash,either because they're not on
board or they're not helping, orfrom the management company
side, they say this account isnot worth the trouble. So that's
(17:00):
no surprise. And then, just asthat board started to smell the
reality of the upcoming costs,sounds like the homeowners now
are starting to smell thereality of this situation, and
they are now calling for a RE isit a recall petition, or what
Terri Rene (17:16):
they were just being, you know, activists and
attempting to swell, you know,swell ground. I don't know how
what the rec term is, it
Robert Nordlund (17:26):
groundswell, groundswell of opinion in on
their side to try to change yourminds.
Terri Rene (17:31):
It became clear that we would have to double down our
efforts to convince our ownerswe needed their support.
Communication increased and theboard spread out to speak one on
one on one with the owners,multiple to owner town halls,
and we paraded in experts likeour master building inspector,
your company's Pacific Northwestpresident, and our new
(17:52):
management company CEO.
Robert Nordlund (17:54):
Okay, again, I'm going to slow you down
there. I think this almostbecomes a case study in how to
do it well, because we talk somuch about how important
communication is. And I attendeda, yeah, attended a presentation
from a board member at a Cainational trade show. We ended up
(18:15):
having him as a podcast guestwho his whole message was a
building problem requiring aspecial assessment is not a
financial problem, it's acommunity communication problem.
And he talked about buildingpolitical capital, and I think
you sensed that. And I hearwords like, we increased
communication. You know, Terry,it's got to be tough when
(18:37):
there's only 18. And so you knowwho everyone is. It's almost
like you have a Do you have apersonal relationship with them?
I
Terri Rene (18:47):
made it my business to know who they were and and to
get on a personal basis with asmany as would open and invite
that some were not willing to doso, and I respect that. Yeah, I
spent time before all thishappened, trying to communicate,
(19:07):
but the board shut it down. Theywouldn't allow me to present
facts. I got five minutes at anannual Association meeting
because they had to give youtime to talk to the owners. And
I brought in big posters withpictures to show you know where
all the leaking was occurring,and talked about the inspectors
(19:28):
report with them, and justpresented the facts because I
felt that they deserved to knowthe truth, And that porn was
deliberately squelchingcommunication to keep that truth
from them.
Robert Nordlund (19:44):
Yeah, well, and then also it's maybe even beyond
a truth versus fiction thing.
It's a human factors thing. Wehad a client that had balcony
problems, and literally,balconies were unsafe. And the
couple have had to bedemolished, and their special
assessment vote failed becausepeople couldn't believe that
(20:05):
this was real. And then theboard chose to move the debris
from the balcony removal up towhere the guard house was. So
every day, when every ownerdrove in and out, they would see
the rotted wood that was in thetwo balconies that had been
removed, and they wereconfronted finally with the
(20:27):
reality that and that unsettlingfeeling that, oh, that could be
my balcony next, and I don'twant to be standing on it when
it goes and they, you know, thatwas that not written
communication, not spokencommunication, but that was what
you say, eyeball communication.
Yeah.
Terri Rene (20:44):
We did that as well.
We did a lot of tours with thosewho would entertain the idea
that maybe I should take acloser look. I brought in
pictures from the inspectorreport, because a lot of people
wouldn't read a 3030, pagereport. Anyhow, so I brought
some of the worst pictures inand talked about them in that
five minute little spiel. Butyeah, I think it was important
too to get the hands on. Iwelcomed people to cut. Hey, I
(21:08):
tried to encourage them. Youshould go out and take a closer
look. It's hard to find thedamage, even though we had vinyl
siding, which hides a lot. Soyeah, in the end, the special
assessment barely passed,
Robert Nordlund (21:24):
yeah, but you again, you did all the right
things. You got your committeeof experts. So it wasn't just
you. I got to ask, and we needto take a break, but let me ask,
how was your health, and didanyone key your car or slash
your tires? Or did it ever getpersonal? Or were people at
least civil about it?
Terri Rene (21:45):
The nastiest things that happened were just words.
What do they say? Stones, sticksand stones break my bones. Words
can never hurt me. Okay, so Ijust have tough up, the tough of
my skin up to that. I was calledsome nasty things in the board
meetings, those associationmeetings, there was some cruelty
(22:07):
with regard to what you mightcall bullying.
Robert Nordlund (22:11):
Might call Yeah,
Terri Rene (22:13):
I'm thankful that everyone was civil enough. Now,
things has changed in this pre,this post covid world, where I
think a lot of us are a lot moreparanoid about that kind of
thing happening. People'semotions run so high, more
terrible things are happening inthis world. And I'm so thankful
that that's not my neighborhood,that's not my people. We're not
(22:37):
putting up with that.
Robert Nordlund (22:39):
Okay, okay, good. Okay. Well, again, it's
time, so let's take a quickbreak now, time to hear from one
of our generous sponsors, afterwhich we'll hear more from Terry
on this special assessmentchallenge.
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Robert Nordlund (23:21):
we're back.
Well, just before the break, wetalked about how the special
assessment barely passed. AndTerry, you were telling me about
how the law is a little bitupside down, or let's not go
into that, but the situationthat you had was the board was
able to pass it, yet you had tocall for a vote of the owners to
(23:42):
see if they objected. Was that acorrect characterization?
Terri Rene (23:49):
Yeah, to me, it was very important. The first step
was for the board to againcommunicate with the owners,
bring it to a vote of theowners. Don't sit on it and do
nothing in our state, you haveto have the owners reject your
budget, and so you bring thisvote to them, and hopefully they
don't reject
Robert Nordlund (24:09):
it. You move on. If you were a betting
person, would you have bet thatyou had successfully convinced
enough people and that was goingto fly? I felt like I was
flipping coin. Interesting. Andagain, we're talking about 18
unit associations. So we'retalking the difference between
eight and nine and 10 or 11 ofthe 18 unit owners here. So wow,
(24:34):
that's, that's thin margin.
Okay, all right, let's talk moreabout where you're at now. So
that was 2024 and you warned methat we may hear construction
noise in the background. So it'smoving forward now,
Terri Rene (24:48):
right? So we hired our building, we hired a
building inspector, and had themupdate the. Association on the
condition of the building, theyprovided us with a rough order
of magnitude budget so we couldestablish the amount for the
special assessment and then goforward if we could get it
(25:10):
funded. I mean, we can moveforward without the thing
passing, right? So once itpassed, then we were able to
move forward with hiring anarchitect and engineering
services contract and gettingthe building inspection company
that we had did projectmanagement as well. So hiring
(25:32):
them to do that get us multiplebids, competitive bids, go
through the bidding process andaward a construction contract,
which we've now been through,that that took a good year to do
all of that, right? Your stokeof work, all that stuff, very,
very involved and detailed,right?
Robert Nordlund (25:50):
So is that 2024 and now 2025 they're actually
starting to make noise.
Terri Rene (25:56):
We weren't on a fiscal year. This thing was
established, you know, separatefrom our fiscal budget. I did
not want to mix it with regularbudget issues, so, so I made it
its own issue. We had a separatespecial budget Association
meeting to pass that thing. Andthen our our assessments were
(26:18):
due, like in August. 1, we gavethem any months advance. We were
trying to make it as easy aspossible, but still. So it's a
little bit off of that. But wedid get the contract awarded. We
probably spent a portion of2023, even, kind of preparing
for some of this stuff. With allthe inspections that were going
(26:39):
on, you're right in your scopeof work, you're starting to
define things, right? And thenin 2024 Yeah, I'm working with
architects and engineers andgetting drawings and hardcore
specifications. We usedAssociation, American Institute
of Architects, AIA, okay, yeah,contract form. So we went
(27:01):
through all that, and we're now,yeah, we're, we're four months
in for four months intoconstruction and an eight month
suction project.
Robert Nordlund (27:11):
Got it okay. So you're, you, you're halfway in,
and got to ask, are you onbudget, on schedule? Has all
that preparation set you up forsuccess in the project. The
Terri Rene (27:24):
preparation definitely helped us. We are on
budget, and I would credit thatto our preparation. You have to
have contingency funds as a partof your budget plan. So we are
on budget. We are not onschedule. There was more
structural damage and gypsumsheathing that happily replaced
than anyone would have guessed.
We replaced 60% of our wallsheathing. It was water damaged
(27:46):
to that extent, and we we hadsomething like 40 studs and a
whole bunch of rim joists toreplace. So there was
considerable structural work,and that increases your
engineering costs as well,because you can't plan for that
sort of thing. So it puts usoff, but off schedule. I'm still
(28:08):
hopeful we're on a tight rope,but I believe that we're on
track, on budget.
Robert Nordlund (28:16):
Okay, we're recording this. The episode will
play later, but we're recordingthis early September, so four
more months, September, October,November, December. So it's
going to be some winter months,but hopefully by then you'll
have it wrapped and
Terri Rene (28:31):
right. The painting may have to get pushed out to
spring if that schedule delay,it was like a five week
justified schedule delay for thestructural work, 100,000 bucks,
you know, it was a big chunk. Sothat could ultimately be what
happens is the painting getsshoved into the spring because
(28:53):
of this, but we'll see they'retrying to stay on track.
Robert Nordlund (28:55):
Good. Okay, and I'm not sure if you said it
clearly, but you hired a you hadthe professionals in advance,
but you now also have aconstruction consultant
overseeing the project, so it'snot on your shoulders. Yeah, it
still falls on by show. Yeah,you're still the owner's rep, I
guess. And
Terri Rene (29:15):
that's right, I'm out there every week. We do
progress reviews and I look forcontract compliance. No one else
is going to do that for you. Ifyou don't do that, they will do
what they want to do what theythink is best, and that doesn't
always represent the customer'sneeds.
Robert Nordlund (29:33):
Yeah, my daughter has an upcoming medical
procedure, and my wife will beat her side, because you need to
have an advocate, and you're theadvocate for your association,
because no one cares, like anowner or a parent just can't get
around that human factor. Let'stalk about some other human
(29:54):
factors. Okay, you're carrying aheavy burden. What does the end
look? Like, let's talk aboutfinancially. What's Do you have
any sense of if this is going todo a boost in home values, or is
this going to just stabilizehome values, keep them from
tanking?
Terri Rene (30:12):
Well, I believe that it will increase the value of
our property. When you reside orRe Roof, you get that investment
back pretty much 90% somethinglike that, or what we put in,
the value will reflect that. Andthere's already interest in the
community. You know, inpurchasing some of these units
(30:33):
that as they go up for sale, youmay have one or two that's
garnering interest because ofthe fact that this is going to
look like a brand new and it isgoing to be essentially a brand
new building all over again. Butafter that big special
assessment, our associationreserve balance is still
underfunded. We're about 50%fully funded, and we want to be
(30:55):
70% of the minimum thingrequired to maintain, repair,
replace building components tobefore shares down as can be
done. Our roof is scheduled fora placement in four years. So
we're pressure,
Robert Nordlund (31:09):
yeah, so you just emerge from the big siding
and window and sliding door anddeck project, and then you're
going to have a roof project injust a few years. Yeah, it never
stops. Deterioration is ongoing.
You have to get used to that.
But okay, I'm glad that you havean expectation or a gut feel
that the property values aregoing to be strong. I hate to
(31:31):
feel what would have happenedhad the board continued to let
it slide. Would have been mold.
It would have been moisture,interior damage, all those kinds
of things, right?
Terri Rene (31:42):
Well, we would have gone into insolvency potentially
as well. You can't run abusiness that way, and you start
getting business partners thatsee that, and they're leaving,
and you're not going to have aboard to support you anymore. No
one who's good enough to runyour business is going to stay
in a failing business, they'regoing to go look for a business
(32:03):
that they can be successful in,right? Owner? Don't support
that. It's to me, it spells theend of the association,
Robert Nordlund (32:11):
right? It is a, you want to say a housing
development, but yes, it is anonprofit business. Terry, this,
I found this captivating. Ithought it was just a special
assessment story, but it's anumbers story, it's a political
capital story, it's a couragestory, it's a commitment. Yeah,
it's a commitment story, youstood up for what needed to
(32:34):
happen, and you're going toemerge with a healthier
Association. And it's boardmembers like you that we just
absolutely love celebrating onthis show, so I'm looking at the
time, and we're we're past time,but I want to say thank you,
Terry, for taking the time tojoin us on today's program. Any
final thoughts, words of wisdomto share on your board member
(32:55):
experience, or what's what'snext for you? What can you share
with our audience today?
Terri Rene (32:59):
Thank you again for having me on your show, Robert,
I think that board should leadby example. We hold at least one
special meeting every year toevaluate our performance and set
goals, and we continue to learnhow to improve our business. I
also want to shout out to mysister, Corey. She's an
association board member inFlorida. So I'm Corey,
Robert Nordlund (33:25):
great, you know, I just want to say one
more thing is that you keepsaying, improve our business.
And I think there's too manyboards that fail to see their
association as a business. It'sa neat place, it's a nice place
to live. There's a socialaspect, but indeed, it is a
business, and you'vedemonstrated that very clearly
(33:45):
by example. Well, we want topublicly acknowledge Terry for
performing a thankless job.
Well, digging deep through theyears sounds like a beautiful
place to live, and now she'screated a better place for all
18 owners to live there at herAssociation. We're glad she's
been there on the board theright person at the right time
with a guiding hand to keep itphysically and operationally
(34:06):
sound. And we hope you gain someHOA insights and some
encouragement, maybe someinspiration from Terry's
observations and experiencetoday that helps you bring
common sense to your commonarea. And remember, if you match
our definition of a board hero,or know someone who does, please
reach out to us. We love havingboard heroes on our program. Our
contact details are provided inthe show notes. Thank you for
(34:28):
joining us, and we look forwardto another great episode next
week.
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We needed to consider that there would be a
certain percentage of owners whowould be unable to make the
payments. And we had talked alot about, how are we going to
handle that? Because you can'tgo into a contract commitment
without the money that you needto pay the contractor. We needed
to discuss that. And I told themthat, you know, while I hoped
(00:23):
that everyone could afford it,we may have one or two, a 10%
was sort of my rule of thumb tothink about. We're not going to
collect so let's do the planningand be prepared for that, even
though they aren't necessarilysaying that right now,
Announcer (00:43):
a regular highlight of the HOA insights podcast is
our board heroes feature, wherewe dedicate one episode each
month to celebrate theremarkable efforts of HOA board
members to us a board hero isone of the 2 million elected
volunteers who deserverecognition for excelling in a
role that often goes unnoticed.
Today, we're excited tospotlight one of these
exceptional board heroes andshare their inspiring story. If
you match our definition of aboard hero, or know someone who
(01:06):
does, please reach out to us.
Our contact details and those ofour sponsors are provided in the
show notes. Welcome
Robert Nordlund (01:13):
back to HOA iInsights
Common Areas. I'm RobertNordlund, and I'm here today for
episode number 130 with anotherone of the board heroes, we're
proud to celebrate. Terry Reneehas been a board member off and
on for 15 years, and is one ofthe original owners at her 38
year old, 18 unit condominiumassociation in the beautiful
(01:34):
Pacific Northwest. As a regularpodcast listener, she reached
out to me, taking me to taskwith how many aspects of being a
board member we had not yettouched on the podcast,
including and get your fingersready, such things as people
skills, networking, negotiating,arbitrating, facilitating,
training, coaching, mentoring,cash flow analysis. I've got a
(01:58):
list here the association's rolein mortgage qualification for
prospective buyers. And just aside note here, stay tuned for
Episode 133 coming up in just afew weeks, maintenance, planning
and board performanceevaluations. And that's probably
not a complete list. Clearly,not a person who is shy about
(02:18):
sharing her opinion. But so ofcourse, I thanked her for the
list, and of course, then askedher to join me on the program so
she could tell her story. Andthe story that she's about to
tell is going to be huge, andthat's because she's going to
talk about $100,000 specialassessment for homes that were
(02:41):
in the range of $300,000 invalue, and they passed that just
last year. So stay tuned. We'regoing to hear from Terry Moore
about that story in just aminute. But first, I hope you
enjoyed last week's episodenumber 129 with regular co host
and insurance expert KevinDavis, seeing the world through
his eyes as a leader in thecountry's largest DNO insurance
(03:02):
provider. We talked about theadditional risks and challenges
faced by an aging population ofassociations, and every day,
every association is getting aday older, like sand in an
hourglass. Those challenges aregoing to be evident as we get to
Terry's 38 year old Associationstory. So this is real. Now, if
(03:23):
you missed that episode withKevin or any other prior
episode, you can find them onyour podcast website, on our
podcast website, Hoainsights.org, on your favorite
podcast platform, or on ourYouTube channel, but better yet,
subscribe to the podcast inorder to get every episode
delivered right to your phone ormobile device. Those of you
watching on YouTube can see themug that I got here from our
(03:47):
merch store. I like the cartoonthat spoke to my heart. And you
can browse through that merchstore from our Hoa insights.org
website or the show notes, andyou'll find we have plenty of
free items there, like boardmember zoom backgrounds and some
specialty items for sale, likemugs, but I'd like to give you a
mug for free. So go to the merchstore, download a free zoom
(04:11):
background. While you're there,look around and find the mug
you'd like. And if you're the10th person to email me at
podcast, at reserves day calmmentioning episode 130 mug
giveaway. We'll ship that mug toyou free of charge. Well, we
enjoy hearing from you, and mostepisodes are in response to a
topic you've recommended. Sostay in contact, like Terry has
(04:34):
done, letting us know whatquestions you have, criticisms,
constructive criticism, ortopics that you like to hear
more about. So leave a voicemailat 805-203-3130, leave a comment
on the YouTube video or send usan email at podcast at reserves.
Day calm, but back to today'sepisode. Yeah, the numbers I
(04:57):
said were right. Uh, Terry, um.
Let's start out by telling ouraudience exactly how big of an
assessment you passed in 20 $24per unit, and how much the units
were worth and how much yourpersonal share was Well,
Terri Rene (05:11):
thank you, Robert, for having me on your show. Our
owners approved a $2 millionspecial assessment for a large
exterior renovation project thatworked out to be an average of
100,000 per unit, but it variedsubstantially from this based on
different allocations of ownerinterest. The average market
value was close to 300,000 perunit. Yeah, my share 150,000 I
(05:37):
happen to own two of the units,so I'm getting the lion's share
of everything
Robert Nordlund (05:42):
here. Let me slow you right down there,
because, okay, here you are.
Were you the board president atthe time, or just a board
member? I had
Terri Rene (05:50):
been off and on the board for a number of years, and
as my career budded, I needed tostep back. The board was very
consuming business. I wasn'tpaying attention for a good
period of time there about 10years. So during that time,
things evolved or devolved,evolved. Look at it
Robert Nordlund (06:12):
well, but for the special assessment. During
the time of the specialassessment, were you the board?
President,
Terri Rene (06:18):
yes. President and Treasurer, yeah.
Robert Nordlund (06:21):
Okay, so I find it interesting that, okay,
you're here and you're pitchingthis big special assessment, and
you are effectively bellying upwith the largest bill your own.
And so you are, you are stickingyour nose right in it and saying
that, Hey, folks, I believe init enough to put 150 grand into
(06:44):
this. A lot of you are going topay less, but that really
exposes you as a believer, andyou are believing hard if it's
going to cost you 150 grand.
Terri Rene (06:54):
Yeah. I mean, everybody has different
abilities, financialcapabilities, and so I feel
blessed that I was able to dosuch a thing. Make no mistake,
there were compromises I had tomake, and that's something that
I had to really explain toowners when we were doing this,
was that everyone, no matterwhat your financial status in
(07:17):
this is, is affected you'remaking compromises. You're
making choices. Things arechanging in your life. It's a
life changing amount of money.
Robert Nordlund (07:28):
Oh, yeah, that's clearly, and we're
talking before the program. Itsounds like it's a beautiful
place, water waterfront, orwater view,
Terri Rene (07:38):
yeah, waterfront, one of the buildings has all the
water view. There's a buildingin the back with more cityscape
Park views, still nice, but
Robert Nordlund (07:49):
people bought there because it's a beautiful
place to live, and it wasprobably priced appropriately
for their budget, and they fellin love with the place they buy
the place just like the averageI think homeowner buys a home
because they think this is whereI want to live. And to find out
that not just the Oh darn I needa new roof or Oh darn I need a
(08:14):
water heater. We're talkingabout, oh darn we need a whole
lot of money here, right?
Terri Rene (08:21):
You and I were talking before the show, people
come to associations for a lotof different reasons, and we
certainly had some owners whowere trying to make profit flip
a unit. There were some rentalshere. There's different
motivations, purchasing, butdefinitely the location and the
(08:42):
views peaks interest for allpurchasers.
Robert Nordlund (08:48):
Yeah, yeah.
Okay, well, good. You know thatit's nice to be able to drive
home from wherever you go andyou say, I'm home. I like it
here, and that's just awonderful thing. Hey, tell me
when it came to the reality ofwe're going to jump around a
lot, because I have so manyquestions when it came to the
reality of 100,000 ish specialassessment, were there some
(09:12):
owners that just bailed anddumped and sold and left?
Terri Rene (09:17):
Yeah, that was something that I had to take
into consideration in workingwith the board to develop a
strategy for such a largespecial assessment, we needed to
consider that there would be acertain percentage of owners who
would be unable to make thepayments. And we had talked a
lot about, how are we going tohandle that? Because you can't
(09:38):
go into a contract commitmentwithout the money that you need
to pay the contractor. We neededto discuss that, and I told them
that, you know, while I hopedthat everyone could afford it,
we may have one or two, a 10%was sort of my rule of thumb to
think about, we're not. Tocollect. So let's do the
(10:01):
planning and be prepared forthat, even though they aren't
necessarily saying that rightnow, let's plan it that way.
Robert Nordlund (10:09):
Okay, did you end up getting 18 people paying?
Terri Rene (10:14):
No, we had a couple units. We have unpaid
assessments, or we're
Robert Nordlund (10:21):
going down different Yeah, so it came true,
all right, so we're not good,good job of estimating. Will
that be something that you havestarted the is it in the pacific
northwest of the is it theforeclosure process? So they'll
hopefully get the associationsmoney out of it,
Terri Rene (10:40):
right? So it runs range from payment plans to
foreclosure, and you go throughthat process with your
attorneys, and it's somethingthat you have to wade through
over a great period of time, soI'm not at liberty to discuss it
that range of detail.
Robert Nordlund (10:57):
Good, okay, good for you, because it I've
tried to not say what state wehaven't said what body of water
we're trying to be careful as wedance through this topic here.
But okay, so we've got $100,000ish special assessment. How does
that come about? What led tothat? This
Terri Rene (11:18):
is my story. So I'm an original owner. So watched
this thing develop since my late20s, when I was rather naive. I
think we all are home ownershipgoes and I didn't sign blindly.
I read all the contracts, butfor decades, a majority of our
owners didn't want to raiseassessments and supported
(11:41):
inadequate board budgetproposals. I would include
myself in that at a young age. II didn't have a concern about
it, so I wasn't, like,rejecting, yeah, that's a future
problem notion, right? For quitea while, then we were a brand
new building, I mean, startedout so you kind of like, you're,
not concerned about a lot ofthings, correct? There was a
(12:04):
trend of repeated water leaksover time, though, through
windows, doors and decks. Andwhen the signing was 30 years
old, and the board advocatedadding 20 more years to its
useful life, a few discerningowners, including myself, time I
wasn't on the board, insisted onhiring a building consultant for
(12:25):
invasive inspection.
Robert Nordlund (12:26):
So at this point in time you're not on the
board, you're just an owner whoappreciates 30 years is 30 years
if it's 38 years old. Now that'seight years ago. So this is
before Champlain tower south andso you and some other owners, we
Terri Rene (12:42):
use that as an example of what you know, worst
case scenario. Yeah, we talkedabout it when it happened. We
were going through pros of thiswhole thing,
Robert Nordlund (12:53):
yeah, but so eight years ago, you and some
other owners convinced the boardto spend some money and get a
thorough or a substantialevaluation.
Terri Rene (13:06):
Yeah, they did samples of the building, seven,
seven areas, and random andtargeted to try to get an
understanding of the conditionof the building. They found
hidden damage to the wallshooting and recommended siding
window and sliding doorreplacement, or did not accept
this recommendation and sawadditional opinions to justify a
(13:29):
continued patch and repairstrategy. Okay?
Robert Nordlund (13:32):
Now again, this is not a surprise. This is a
story as old as communityassociations, new owners, new
building. Future deteriorationis not our problem. Let's just
go, go, go, go, go. And then theboard gets some bad news, and
the board, again, I want to sayclassically, says, Oh, it can't
(13:54):
be that bad. They must be crazy.
There's got to be a differentway. And you know, your story is
your story.
Terri Rene (14:00):
Things began to deteriorate rapidly, and our for
becoming unsafe. Tower boardsold their units during a peak
real estate market in 2020, ah,good owner finally elected to
the board, and that changed
Robert Nordlund (14:16):
everything.
Okay? So I'm gonna slow youdown, so the board that had been
resisting says, Oh, gee, we dosmell trouble here. They started
to get the flavor of it. Therethey go. Finally, so you and the
other owners convinced the boardto get a structural or moisture
evaluation, and the truth ofthat started to come out. And
(14:37):
the board said, we're not up forthis challenge. We're not for
this financial problem, andliterally sold and left. Hoa,
okay, but what is it? Changepresents opportunity. I see that
in business, and you saw that atyour association, where you have
five leaders go and all of asudden, that creates an
opportunity for you forleadership. Whoa. Orange. Okay,
Terri Rene (15:01):
good, good, good.
They did a good job of keepingme out of there, even though I
was trying to help them, I geton. I, you know, made myself
available, and they wereresisting. They were very, very
big opponent here. But it tookseveral more years before we had
a board majority ready to committo a special assessment of this
size for owner pool, there wasquite a bit of board turnover,
(15:21):
and at one point we were down toone board member, me and I
rebuilt.
Robert Nordlund (15:31):
I need to absorb that. Okay, so how many
five board members at theassociation out of an
association of 18? Okay, strongsized board. I've heard of
smaller associations have boardsof four or three, but you had a
board of five and the board'sgone. You get new board members.
(15:52):
You have some board membertransition, some short term, I
don't want to say short termfailures, but yeah, short term
transitions. And so for a periodof time, it's only you and
you're holding on tight, tryingto keep the ship from sinking.
Terri Rene (16:07):
I stand on task. I rebuilt the board from scratch,
being careful to recruit adiverse group of owners ready to
tackle the issues. First thingwe did was hire a new management
company, since our priordysfunction had burned through
two companies. Okay? Nosurprise, our new board faced up
to the realities of a crumblinginfrastructure, and they were
(16:27):
determined to deal with ownerfear and shock with empathy and
understanding. Nonetheless, anowner petition was circulated to
garner support for rejection ofthe special assessment.
Robert Nordlund (16:40):
This is no surprise. When associations are
going through turbulent times,often the management company
gets tossed out in the wash,either because they're not on
board or they're not helping, orfrom the management company
side, they say this account isnot worth the trouble. So that's
(17:00):
no surprise. And then, just asthat board started to smell the
reality of the upcoming costs,sounds like the homeowners now
are starting to smell thereality of this situation, and
they are now calling for a RE isit a recall petition, or what
Terri Rene (17:16):
they were just being, you know, activists and
attempting to swell, you know,swell ground. I don't know how
what the rec term is, it
Robert Nordlund (17:26):
groundswell, groundswell of opinion in on
their side to try to change yourminds.
Terri Rene (17:31):
It became clear that we would have to double down our
efforts to convince our ownerswe needed their support.
Communication increased and theboard spread out to speak one on
one on one with the owners,multiple to owner town halls,
and we paraded in experts likeour master building inspector,
your company's Pacific Northwestpresident, and our new
(17:52):
management company CEO.
Robert Nordlund (17:54):
Okay, again, I'm going to slow you down
there. I think this almostbecomes a case study in how to
do it well, because we talk somuch about how important
communication is. And I attendeda, yeah, attended a presentation
from a board member at a Cainational trade show. We ended up
(18:15):
having him as a podcast guestwho his whole message was a
building problem requiring aspecial assessment is not a
financial problem, it's acommunity communication problem.
And he talked about buildingpolitical capital, and I think
you sensed that. And I hearwords like, we increased
communication. You know, Terry,it's got to be tough when
(18:37):
there's only 18. And so you knowwho everyone is. It's almost
like you have a Do you have apersonal relationship with them?
I
Terri Rene (18:47):
made it my business to know who they were and and to
get on a personal basis with asmany as would open and invite
that some were not willing to doso, and I respect that. Yeah, I
spent time before all thishappened, trying to communicate,
(19:07):
but the board shut it down. Theywouldn't allow me to present
facts. I got five minutes at anannual Association meeting
because they had to give youtime to talk to the owners. And
I brought in big posters withpictures to show you know where
all the leaking was occurring,and talked about the inspectors
(19:28):
report with them, and justpresented the facts because I
felt that they deserved to knowthe truth, And that porn was
deliberately squelchingcommunication to keep that truth
from them.
Robert Nordlund (19:44):
Yeah, well, and then also it's maybe even beyond
a truth versus fiction thing.
It's a human factors thing. Wehad a client that had balcony
problems, and literally,balconies were unsafe. And the
couple have had to bedemolished, and their special
assessment vote failed becausepeople couldn't believe that
(20:05):
this was real. And then theboard chose to move the debris
from the balcony removal up towhere the guard house was. So
every day, when every ownerdrove in and out, they would see
the rotted wood that was in thetwo balconies that had been
removed, and they wereconfronted finally with the
(20:27):
reality that and that unsettlingfeeling that, oh, that could be
my balcony next, and I don'twant to be standing on it when
it goes and they, you know, thatwas that not written
communication, not spokencommunication, but that was what
you say, eyeball communication.
Yeah.
Terri Rene (20:44):
We did that as well.
We did a lot of tours with thosewho would entertain the idea
that maybe I should take acloser look. I brought in
pictures from the inspectorreport, because a lot of people
wouldn't read a 3030, pagereport. Anyhow, so I brought
some of the worst pictures inand talked about them in that
five minute little spiel. Butyeah, I think it was important
too to get the hands on. Iwelcomed people to cut. Hey, I
(21:08):
tried to encourage them. Youshould go out and take a closer
look. It's hard to find thedamage, even though we had vinyl
siding, which hides a lot. Soyeah, in the end, the special
assessment barely passed,
Robert Nordlund (21:24):
yeah, but you again, you did all the right
things. You got your committeeof experts. So it wasn't just
you. I got to ask, and we needto take a break, but let me ask,
how was your health, and didanyone key your car or slash
your tires? Or did it ever getpersonal? Or were people at
least civil about it?
Terri Rene (21:45):
The nastiest things that happened were just words.
What do they say? Stones, sticksand stones break my bones. Words
can never hurt me. Okay, so Ijust have tough up, the tough of
my skin up to that. I was calledsome nasty things in the board
meetings, those associationmeetings, there was some cruelty
(22:07):
with regard to what you mightcall bullying.
Robert Nordlund (22:11):
Might call Yeah,
Terri Rene (22:13):
I'm thankful that everyone was civil enough. Now,
things has changed in this pre,this post covid world, where I
think a lot of us are a lot moreparanoid about that kind of
thing happening. People'semotions run so high, more
terrible things are happening inthis world. And I'm so thankful
that that's not my neighborhood,that's not my people. We're not
(22:37):
putting up with that.
Robert Nordlund (22:39):
Okay, okay, good. Okay. Well, again, it's
time, so let's take a quickbreak now, time to hear from one
of our generous sponsors, afterwhich we'll hear more from Terry
on this special assessmentchallenge.
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(23:12):
whether you're a small HOA or alarge condominium association,
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Robert Nordlund (23:21):
we're back.
Well, just before the break, wetalked about how the special
assessment barely passed. AndTerry, you were telling me about
how the law is a little bitupside down, or let's not go
into that, but the situationthat you had was the board was
able to pass it, yet you had tocall for a vote of the owners to
(23:42):
see if they objected. Was that acorrect characterization?
Terri Rene (23:49):
Yeah, to me, it was very important. The first step
was for the board to againcommunicate with the owners,
bring it to a vote of theowners. Don't sit on it and do
nothing in our state, you haveto have the owners reject your
budget, and so you bring thisvote to them, and hopefully they
don't reject
Robert Nordlund (24:09):
it. You move on. If you were a betting
person, would you have bet thatyou had successfully convinced
enough people and that was goingto fly? I felt like I was
flipping coin. Interesting. Andagain, we're talking about 18
unit associations. So we'retalking the difference between
eight and nine and 10 or 11 ofthe 18 unit owners here. So wow,
(24:34):
that's, that's thin margin.
Okay, all right, let's talk moreabout where you're at now. So
that was 2024 and you warned methat we may hear construction
noise in the background. So it'smoving forward now,
Terri Rene (24:48):
right? So we hired our building, we hired a
building inspector, and had themupdate the. Association on the
condition of the building, theyprovided us with a rough order
of magnitude budget so we couldestablish the amount for the
special assessment and then goforward if we could get it
(25:10):
funded. I mean, we can moveforward without the thing
passing, right? So once itpassed, then we were able to
move forward with hiring anarchitect and engineering
services contract and gettingthe building inspection company
that we had did projectmanagement as well. So hiring
(25:32):
them to do that get us multiplebids, competitive bids, go
through the bidding process andaward a construction contract,
which we've now been through,that that took a good year to do
all of that, right? Your stokeof work, all that stuff, very,
very involved and detailed,right?
Robert Nordlund (25:50):
So is that 2024 and now 2025 they're actually
starting to make noise.
Terri Rene (25:56):
We weren't on a fiscal year. This thing was
established, you know, separatefrom our fiscal budget. I did
not want to mix it with regularbudget issues, so, so I made it
its own issue. We had a separatespecial budget Association
meeting to pass that thing. Andthen our our assessments were
(26:18):
due, like in August. 1, we gavethem any months advance. We were
trying to make it as easy aspossible, but still. So it's a
little bit off of that. But wedid get the contract awarded. We
probably spent a portion of2023, even, kind of preparing
for some of this stuff. With allthe inspections that were going
(26:39):
on, you're right in your scopeof work, you're starting to
define things, right? And thenin 2024 Yeah, I'm working with
architects and engineers andgetting drawings and hardcore
specifications. We usedAssociation, American Institute
of Architects, AIA, okay, yeah,contract form. So we went
(27:01):
through all that, and we're now,yeah, we're, we're four months
in for four months intoconstruction and an eight month
suction project.
Robert Nordlund (27:11):
Got it okay. So you're, you, you're halfway in,
and got to ask, are you onbudget, on schedule? Has all
that preparation set you up forsuccess in the project. The
Terri Rene (27:24):
preparation definitely helped us. We are on
budget, and I would credit thatto our preparation. You have to
have contingency funds as a partof your budget plan. So we are
on budget. We are not onschedule. There was more
structural damage and gypsumsheathing that happily replaced
than anyone would have guessed.
We replaced 60% of our wallsheathing. It was water damaged
(27:46):
to that extent, and we we hadsomething like 40 studs and a
whole bunch of rim joists toreplace. So there was
considerable structural work,and that increases your
engineering costs as well,because you can't plan for that
sort of thing. So it puts usoff, but off schedule. I'm still
(28:08):
hopeful we're on a tight rope,but I believe that we're on
track, on budget.
Robert Nordlund (28:16):
Okay, we're recording this. The episode will
play later, but we're recordingthis early September, so four
more months, September, October,November, December. So it's
going to be some winter months,but hopefully by then you'll
have it wrapped and
Terri Rene (28:31):
right. The painting may have to get pushed out to
spring if that schedule delay,it was like a five week
justified schedule delay for thestructural work, 100,000 bucks,
you know, it was a big chunk. Sothat could ultimately be what
happens is the painting getsshoved into the spring because
(28:53):
of this, but we'll see they'retrying to stay on track.
Robert Nordlund (28:55):
Good. Okay, and I'm not sure if you said it
clearly, but you hired a you hadthe professionals in advance,
but you now also have aconstruction consultant
overseeing the project, so it'snot on your shoulders. Yeah, it
still falls on by show. Yeah,you're still the owner's rep, I
guess. And
Terri Rene (29:15):
that's right, I'm out there every week. We do
progress reviews and I look forcontract compliance. No one else
is going to do that for you. Ifyou don't do that, they will do
what they want to do what theythink is best, and that doesn't
always represent the customer'sneeds.
Robert Nordlund (29:33):
Yeah, my daughter has an upcoming medical
procedure, and my wife will beat her side, because you need to
have an advocate, and you're theadvocate for your association,
because no one cares, like anowner or a parent just can't get
around that human factor. Let'stalk about some other human
(29:54):
factors. Okay, you're carrying aheavy burden. What does the end
look? Like, let's talk aboutfinancially. What's Do you have
any sense of if this is going todo a boost in home values, or is
this going to just stabilizehome values, keep them from
tanking?
Terri Rene (30:12):
Well, I believe that it will increase the value of
our property. When you reside orRe Roof, you get that investment
back pretty much 90% somethinglike that, or what we put in,
the value will reflect that. Andthere's already interest in the
community. You know, inpurchasing some of these units
(30:33):
that as they go up for sale, youmay have one or two that's
garnering interest because ofthe fact that this is going to
look like a brand new and it isgoing to be essentially a brand
new building all over again. Butafter that big special
assessment, our associationreserve balance is still
underfunded. We're about 50%fully funded, and we want to be
(30:55):
70% of the minimum thingrequired to maintain, repair,
replace building components tobefore shares down as can be
done. Our roof is scheduled fora placement in four years. So
we're pressure,
Robert Nordlund (31:09):
yeah, so you just emerge from the big siding
and window and sliding door anddeck project, and then you're
going to have a roof project injust a few years. Yeah, it never
stops. Deterioration is ongoing.
You have to get used to that.
But okay, I'm glad that you havean expectation or a gut feel
that the property values aregoing to be strong. I hate to
(31:31):
feel what would have happenedhad the board continued to let
it slide. Would have been mold.
It would have been moisture,interior damage, all those kinds
of things, right?
Terri Rene (31:42):
Well, we would have gone into insolvency potentially
as well. You can't run abusiness that way, and you start
getting business partners thatsee that, and they're leaving,
and you're not going to have aboard to support you anymore. No
one who's good enough to runyour business is going to stay
in a failing business, they'regoing to go look for a business
(32:03):
that they can be successful in,right? Owner? Don't support
that. It's to me, it spells theend of the association,
Robert Nordlund (32:11):
right? It is a, you want to say a housing
development, but yes, it is anonprofit business. Terry, this,
I found this captivating. Ithought it was just a special
assessment story, but it's anumbers story, it's a political
capital story, it's a couragestory, it's a commitment. Yeah,
it's a commitment story, youstood up for what needed to
(32:34):
happen, and you're going toemerge with a healthier
Association. And it's boardmembers like you that we just
absolutely love celebrating onthis show, so I'm looking at the
time, and we're we're past time,but I want to say thank you,
Terry, for taking the time tojoin us on today's program. Any
final thoughts, words of wisdomto share on your board member
(32:55):
experience, or what's what'snext for you? What can you share
with our audience today?
Terri Rene (32:59):
Thank you again for having me on your show, Robert,
I think that board should leadby example. We hold at least one
special meeting every year toevaluate our performance and set
goals, and we continue to learnhow to improve our business. I
also want to shout out to mysister, Corey. She's an
association board member inFlorida. So I'm Corey,
Robert Nordlund (33:25):
great, you know, I just want to say one
more thing is that you keepsaying, improve our business.
And I think there's too manyboards that fail to see their
association as a business. It'sa neat place, it's a nice place
to live. There's a socialaspect, but indeed, it is a
business, and you'vedemonstrated that very clearly
(33:45):
by example. Well, we want topublicly acknowledge Terry for
performing a thankless job.
Well, digging deep through theyears sounds like a beautiful
place to live, and now she'screated a better place for all
18 owners to live there at herAssociation. We're glad she's
been there on the board theright person at the right time
with a guiding hand to keep itphysically and operationally
(34:06):
sound. And we hope you gain someHOA insights and some
encouragement, maybe someinspiration from Terry's
observations and experiencetoday that helps you bring
common sense to your commonarea. And remember, if you match
our definition of a board hero,or know someone who does, please
reach out to us. We love havingboard heroes on our program. Our
contact details are provided inthe show notes. Thank you for
(34:28):
joining us, and we look forwardto another great episode next
week.
Announcer (34:37):
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(35:01):
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(35:22):
about the Community Associationindustry, you'll want to consult
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