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Article Courtesy of News & Insights
By Allaire Conte
Published September 24,2025
Just before we moved in together, my fiancee got a notice
from the owner of the condo she subletted. The building, located just feet from
the boardwalk in Brighton Beach, Brooklyn, was going through a special
assessment to update the building’s sagging balconies. It was a significant cost
and the condo's owner would need to raise the rent to pay for the additional
fees.
Instead of renewing her lease, my partner moved out and the owner sold the unit.
But for the years since, every time we’ve gone to the beach we’ve walked past
her old building to watch as construction began and then stalled, leaving
hundreds of now balcony-less doors boarded shut from the outside, exposed and
ominous.
Homeowners who go through a special assessment often assume that the repairs
will begin and end promptly. But as my fiancee’s former building shows, projects
can be significantly delayed, leaving owners out thousands of dollars with
little transparency.
Why do HOAs collect cash, then stall?
Repairs paid for by a special assessment are vulnerable to the same setbacks
that can happen to any other construction project: contractor delays, permitting
snags, and drawn-out negotiations over the scope of work. Add in the potential
for board turnover or conflicts among members, and it’s a wonder anything gets
done on time.
A less common, but still possible, reason is that associations mismanage or
underbudget assessments, leaving projects stuck in limbo. Or emergencies—such as
storm damage or burst pipes—can force HOAs to dip into reserves that were
supposed to fund long-planned projects.
“The end result is homeowners’ dollars stuck in HOA coffers while roofs continue
to leak or roads continue to crumble,” says Joe Ellul-Turner, a real estate
professional and founder of Darscover.
The risks to homeowners
When special assessments stall, homeowners are often the ones left holding the
bag.
First, there’s the financial drag. Homeowners often have to pay assessments
upfront or in installment plans, even while repairs remain unfinished. That
leaves cash sitting idle, unable to build interest, be reinvested, or offset
other rising expenses. A lagging assessment can even take a chunk out of your
equity, in a powerful one-two punch to homeowners.
“The association is still spending their money, but no work is being done. The
owner is still on the hook for the full cost, but no progress is visible,” says
Shane Lucado, a practicing lawyer for more than 25 years and founder of
InPerSuit. “Try explaining that to a prospective buyer: why $18,000 has been
prepaid, but the roof looks as if no work has been done.”
Then there’s the reputational risk. Delayed projects can damage an HOA’s
standing with lenders, buyers, and existing residents.
“Any lender going through the underwriting on a condo project is going to notice
and then either hold the closing or decline altogether,” Lucado adds.
Then, there’s the invisible threat of inflation. Material and labor costs rise
over time, and the longer these projects linger, the more likely it is that HOAs
may have to return to residents with a new, higher assessment to finish what was
started.
“What was a good assessment for a project in year one was no longer keeping up
with the costs in year three, leading to additional assessments,” Ellul-Turner
explains.
It’s a compounding problem: financial purgatory today, more expenses tomorrow.
What can owners do?
Homeowners don’t have to sit quietly and hope for the best, says Lucado. The
first step is demanding transparency.
Ask for detailed financial statements. Review board meeting minutes. Understand
where the money is and why the project isn’t moving. HOAs are legally required
to maintain records, and owners have the right to inspect them.
“Mismanagement does not have to be criminal to be actionable,” Lucado adds. “If
your HOA board can’t provide transparent records or at least a specific
timetable, you have hit the first red flag. You’re not looking for perfection,
only documentation.”
And when boards refuse to cooperate? “If they start stonewalling at that level,
you might as well start sniffing around for legal remedies,” Lucado says.
Regulatory and legal context
Homeowners aren't alone when taking on their HOA for a stalled assessment. They
have three types of oversight at their disposal: internal HOA governance, state
oversight, and the courts, says Lucado.
“A review of your governing documents may reveal covenant clauses that require
strict deadlines for the start of the promised project. If the HOA board fails
to comply with the covenants, and they violate the state statutes as well, the
homeowners can go to court and request mandamus and injunctive relief or
financial restitution,” Lucado explains.
And states are starting to strengthen their oversight, too.
“Several states, such as California, Florida, and Colorado, have made homeowner
rights to the HOA financials stronger over the past few years, with penalties
imposed against boards who stonewall,” Ellul-Turner says. “HOAs are now required
by some jurisdictions to give annual reserve studies and make them available to
members, curtailing the ability to hide behind ambiguous planned projects.”
Together, these tools signal a shift: Boards are being held to higher standards,
and homeowners have more avenues than ever to demand accountability when
projects stall.
Buyer beware: red flags in HOA documents
For buyers, the risks can start before they even close. Ellul-Turner advises
prospective homeowners to sift through HOA meeting minutes, budgets, and reserve
studies.
Warning signs include vague timetables, large payments without a clear contract,
chronic delay in repairs, or a pattern of special assessments rather than
long-term reserve funding.
Leadership instability is another signal.
“Excessive board turnover [is] usually an indicator of governance failure,”
Ellul-Turner says. And, he adds, “the HOA [should] maintain fidelity insurance—a
safeguard against potential misappropriation of funds received.”
For would-be buyers, spotting these red flags early can mean the difference
between moving into a well-run community or inheriting a costly, drawn-out mess.
It's something I think about every time I go to the beach and see my fiancee’s
old building. Sometimes I look up at her old window and wonder what the new
owner thinks—more than two years after moving in, still staring out at
scaffolding where a balcony should be. |