Megan Blanda knew her San Clemente condominium complex was aging, but she assumed monthly fees of more than $500 were keeping up with maintenance and upgrades.
So when she received a notice this year from the homeowners association that she would have to pay a one-time, $26,000 emergency assessment to replace the roofs, Blanda was shocked — and angry.
“They can’t throw a $26,000 bill at us because the roof has been neglected all these years,” said Blanda, 42, a behavioral therapist for children with autism.
Megan Blanda is among some residents at Vilamoura fighting the special assessment. “They can’t throw a $26,000 bill at us because the roof has been neglected all these years,” she said of the HOA board.
(Myung J. Chun/Los Angeles Times)
It’s a situation that experts say is becoming increasingly common as California’s condos age, the state’s insurance crisis worsens and homeowners associations comply with new safety standards for balconies, leading to unanticipated costs that many condo owners cannot afford.
The fees may be creating a ripple effect on California’s expensive housing market, where first-time buyers increasingly are being squeezed out, including by recent interest rate hikes.
Some say the possibility of being slapped with the fees is a factor in buyers’ waning interest in condos, which have long been a relatively affordable option, at the same time that construction of new condos has continued to lag across the state.
Defenders of the emergency fees, which can be levied by HOA boards to address health and safety hazards or unforeseen expenses, say that longstanding infrastructure issues must be addressed, even if residents don’t like the price tag. Some point to the 2021 collapse of a high-rise condo in Florida that killed 98 people, caused by the building’s flawed structural design and decades of corrosion, as a worst-case scenario.
Many condo owners and HOA boards also are facing higher insurance costs as companies pull out of the state amid increasingly destructive wildfires.
“We have a lot of condo complexes in California which were built during the early 2000s during that building boom … and those are the ones that are aging right now,” said an attorney specializing in HOA law. Above, the Vilamoura at Rancho San Clemente.
(Myung J. Chun/Los Angeles Times)
“We have a lot of condo complexes in California which were built during the early 2000s during that building boom … and those are the ones that are aging right now,” said Michael Kushner, an attorney specializing in HOA law who typically represents homeowners. “The years catch up, and suddenly you’ve got these things falling apart or rotting.”
In the last few years, Kushner said he’s heard about more emergency assessments surpassing $20,000 per unit, often because of long overdue upgrades. Updated balcony inspections, required by state law after a 2015 balcony collapse in Berkeley killed six people, have resulted in many expensive repair jobs, he said.
In 2017, Kushner worked with condo owners in another Orange County community facing an $18,000 assessment, which at the time “was like unheard of.”
Now, “massive” fees are increasingly common, he said, pointing to the one at Blanda’s community in San Clemente, which was first reported by ABC-7 News, as well as another report from the outlet about a $49,000 fee at a Torrance condo community.
Kushner often counsels residents about how they can fight back and ensure fees are assessed fairly and legally, pointing to concerns that the emergency exemption is overused.
HOAs should plan for maintenance by increasing monthly fees and paying into reserve funds, rather than hitting owners with a huge emergency assessment, he said. He also has seen boards lump together a bunch of costs under one emergency issue, when he argues that the assessment should be used to address only a specific emergency.
But homeowners associations often struggle to find the money for major repairs, especially if monthly fees haven’t kept up with inflation or allowed for saving, said Jacquie Berry, owner and founder of a company that reviews HOA documents and finances.
Most HOA board members are homeowners and often avoid raising the monthly fees, which can be unpopular with their neighbors, even as reserves for repairs dwindle, Berry said.
“They don’t want to be bad guys,” she said.
Blanda and a growing group of neighbors at the Vilamoura at Rancho San Clemente have banded together to oppose the surprise fee and initiated a recall election to try to unseat the HOA board.
But James R. McCormick, an attorney representing the homeowners association, said that if the roofs aren’t replaced, leaks could cause major damage, particularly as a strong El Niño is expected to bring drenching storms this winter.
McCormick acknowledged in a statement that maintenance on the condo complex’s roofs “should have been planned for and performed in prior years.” He said a recent report pushed the HOA board to act quickly, in the residents’ best interests.
The report, which McCormick said was written by an independent expert, found that “without replacement, the roofs will continue to have leaks that could cause catastrophic interior damage.” The original tile installation was “sloppy and several of the tiles are cut short, allowing water to enter” the buildings, and the roofs’ waterproofing membrane is “deteriorated and no longer watertight,” McCormick said in the statement.
Blanda and others in her community are trying to recall the HOA board and repeal the assessment.
(Myung J. Chun/Los Angeles Times)
Blanda and several neighbors argue that the roof replacement is not an emergency but routine maintenance — which, they argue, wouldn’t allow for the project to be funded by an emergency assessment. They were told that the condo complex’s roofs would reach the end of their useful life last year, but the HOA board failed to proactively prepare for that, she said.
The 198-unit complex was built in the 1990s, with three-bedroom units recently listed for about $1 million.
“It was foreseeable,” said Blanda, who has lived in the community for about 20 years, first with her mom and now with her husband.
Blanda and others running for seats in the HOA board recall election have secured an estimate for a weatherproofing plan that they say would cost residents about $400 each and ensure the roofs’ safety during the expected stormy winter. They would begin planning to replace the roofs in the future.
The group running to replace the board considered suing the HOA but worried that the litigation could drag on for years. Residents already have begun paying the one-time special assessment, many through a plan that comes out to about $2,000 a month — on top of their usual HOA fees.
The HOA board also has sent lien letters to residents, which The Times reviewed, warning that missed payments could escalate as far as foreclosure.
Beverly Albright, who is 81 and on a fixed income, said she doesn’t have the $26,000. Her children already have had to pitch in financially, and she’s looking into borrowing money.
“I don’t know how I’m going to make it through,” she said.
McCormick said in his statement that the HOA board worked hard to find the most cost-effective bid for the roof project, which came to a total of $5.2 million, and that delays could increase the price tag. He pointed out that the board recall will cost the cash-strapped HOA even more money.
“The unfortunate reality is that this recall process will not change the status of the roofs or otherwise obviate the need for immediate roof replacement,” he said.
Berry, the HOA compliance specialist, recommends that condo owners check their HOA’s financial reserves and get involved in decision-making, as Blanda and her neighbors are doing.
“The biggest thing they can do: look at the budget, go to the budget meeting, ask questions,” Berry said.
