Despite grumbling from residents about being assessed thousands of dollars to pay for Wilma repairs, many don't want their associations to set aside more reserves in the future.

Article Courtesy of  The Miami Herald

By AMY SHERMAN

Published January 8, 2006

Thousands of South Florida residents who have already spent money out of their own pockets on hurricane repairs are now facing another expense: an assessment or higher maintenance fees from their homeowners association.

Some residents grumbling about writing yet another check for hurricane damage question why their developments' reserves, insurance or the Federal Emergency Management Agency isn't covering the full tab.

While experts interviewed say planned developments could do a better job of beefing up their reserves or insuring their properties, many say after a major storm such as Wilma there isn't any way around raising the costs for owners.

Depending on the amount of damage that won't be covered by insurance or reserves, one-time charges per owner range from less than $100 to more than $10,000 to pay for debris cleanup, roof and sprinkler repairs, replacing fences and other costs. Condo associations are also often responsible for damage to units such as walls or balconies.

The biggest cost in many developments is clearing away downed trees. Cities can now get reimbursed from FEMA to haul away debris even in gated communities, but some associations had to spend their own money to cut down the trees, stack them in piles and remove stumps.

Most associations don't have insurance to cover landscaping.

''No insurance company out there provides landscaping insurance, or if they do it, its exorbitant,'' said Rad Diaz, vice president for Miami Management in Broward, which manages condo and homeowner associations.

Some associations already have sent the bills to owners while others can expect a bill during the next few months.

The Becker & Poliakoff law firm is working with more than 1,700 association clients in Broward, Miami-Dade and Palm Beach County to determine how they should raise money to pay for repairs. Their choices: one-time assessments or spreading out the pain over several years by borrowing money from a bank or the U.S. Small Business Administration.

''There is no single planned development I'm aware of that has not had to raise money post-Hurricane Wilma for repairs,'' attorney Gary Poliakoff said. ``There are a lot of benefits to common ownership. The downside is you must pay your share of common expenses no matter how high the expenses might be.''

It's not practical to set aside enough reserves to prevent an assessment, Poliakoff said. Most associations vote not to set aside reserves, Poliakoff said.

Often retirement condos and owners with less money want to waive reserves, says Virgil Rizzo, state condo ombudsman.

''These older people 70 years old don't buy green bananas so why are they going to vote to put money aside for a rainy day?'' says Rizzo, who is fielding dozens of calls a week from residents griping their assessments.

DIFFERENT LIABILITIES

Sunset Lakes in Miramar has enough in reserves -- $500,000 -- and insurance to cover the tree damage and other repairs. The monthly maintenance fee for the homeowners will only rise about $9, including $2 to replenish reserves.

''We wanted to do everything we could to avoid a special assessment,'' said Mike Smith, treasurer of the board.

But residents at Country Club Tower of Coral Springs have been charged a $2,000 assessment per household because the $400,000 in damage is less than the association's insurance deductible. About half the residents have insurance that will help cover the assessment, said association president Dan Mason.

Mason figures he has spent about $400 over the years on the part of his insurance that covers assessments which is now more than paying for itself since it covers his full assessment.

There's been some grumbling among residents about a $368 assessment at SilverLakes, a development of 5,300 single family homes in Miramar and Pembroke Pines.

Residents say it doesn't make sense that they should have to pay by March because they don't believe all the work will be done by then and people are still recovering from their own damage, said Miramar Mayor Lori Moseley, who lives in SilverLakes.

OWNERS `NOT THRILLED'

''I'm really not thrilled,'' said Alanna Mersinger, facing about $3,000 from her own pocket for repairs to her own home on top of the assessment. ``Why didn't the master association have a contingency fund. Hey, where was it? Why didn't the contingency fund cover something like this? My husband is just a teacher and I am only a sub, so this is a killer. Our city picked up the debris so did I pay for that also? Twice?''

With the promise of FEMA reimbursement, Miramar and other cities did haul away debris from gated communities. But it's up to the association to cover chopping down trees, stacking the wood and removing stumps.

Mersinger shouldn't put away her checkbook yet. A letter from the board of directors warned that owners may face additional assessments to replace trees.

Some residents also say the association rushed too quickly to hire vendors to clean up the debris and should have shopped around for a more competitive price.

''We didn't have time for that,'' said Al Giunta, association president. ``You're lucky to get contracts, the demand is so great.''

Reserves and insurance just can't cover the more than $1.8 million in losses to the landscaping, irrigation pumps and other expenses, Giunta said.

''We never had a hurricane in Broward County in 40 years so you can't plan for these things,'' he said.

HARD HIT

At Hawaiian Gardens in Lauderdale Lakes, one of the hardest-hit condo communities, some buildings are charging one-time assesments while others are raising monthly maintenance fees.

David Barclay's building borrowed $55,000 from the bank, which translates to an extra $35 to $60 in maintenance fees for each resident spread over five to seven years. Residents in one-bedroom units now pay $120 in maintenance a month.

The higher fees will start in a couple of weeks even though many residents can't live in the building, which needs new walls in most of the units.

FIXED INCOMES

Most of the residents are on fixed incomes, many of them elderly, and they will be hit hard by the higher fees combined with rising electricity and insurance costs.

Many residents couldn't afford a one-time assessment, Barclay said, which is why the board chose to spread out the payment.

''They are not happy, of course, but they have to realize we did have a catastrophe,'' he said.

``Had residents decided in the past to have a reserve account, we would not have to ask for any money. Every year residents do not want maintenance fees to increase therefore we are stuck having to ask for money to do anything in the building. We keep zero money in reserves.''