Replacement Project Q&A
We write today to provide context and detailed information on our recent flooring and soft goods replacement project for Spy Glass. We hope you’ve had the chance to stay in a completed unit. We are pleased with the results and have received many positive responses from owners. We’ve also received a few questions regarding the process, its costs and how the special assessment some unit owners received relates to overall building reserves.
Question: Why is it that I received a special assessment when the budget from the exterior HOA shows that the building has reserves? Why weren’t these monies used?
Answer: This is a great question and goes to the heart of the ownership and management structure at Meadow Lake. The reason is that these are the reserves of the external HOA, not available for MLDC to use to maintain the internal aspects of your unit. Per the governing documents, Meadow Lake Development Corporation (MLDC) is tasked directly as “Managing Agent” with maintaining the internal aspects of the units. The documents also create HOA boards, like traditional condominium boards, to oversee the common elements, which are external to the actual units. These budgets are for the entire association and not broken down by unit. We understand that our governing structure is complicated. We posted the governing documents on our website and are happy to review them with you.
Question: Why is it that I received a special assessment when the budget I received from MLDC shows money going to the reserves? Why was this money not used?
Answer: This is due to delinquency of the unit. As delinquency occurs and owners do not make their maintenance fee payment, reserves are used to satisfy the shortfall of maintenance fees.
Question: Why do I have a special assessment while other owners I know have a smaller one or none at all?
Answer: This is the result of the governing document requirement that all maintenance fees and reserve funds be used at the unit rather than the building or association level. This means that each unit has different reserves and fees depending on how many owners are current and how many are delinquent. This produces seemingly inequitable results—results which are frustrating to MLDC as well as the owners. As a result, MLDC is working on a project to put a document refresh to an owner vote. One of the chief goals is to change the accounting requirement from the unit level to the level of a village. We feel this will provide for more flexibility, more stability and just and equitable results.
Question: Why did the HOA board not vote on the project?
Answer: Per the governing documents, the village HOAs are responsible for the external aspects of your unit ownership. The internal aspects of the ownership such as maintenance, repairs, bill paying, use coordination, etc. are the responsibility of MLDC as Managing Agent for the unit. The documents create a direct relationship between the unit interval owner and MLDC. We work diligently to manage your resort in compliance with its governing documents. We’ve posted these documents on our website and encourage owners to download and read them. We will mail a hard copy if you prefer.
Question: Under what authority did MLDC undertake this project?
Answer: Per the governing documents, available on the website, MLDC is charged with maintaining the units in a first-class manner consistent with the condition in which they originated. Real estate depreciates and things such as chairs, tables, couches and flooring wear out and require replacement. Sometimes it is efficient to do it one at a time, as when a dishwasher expires. Other projects such as flooring and couches are more efficiently accomplished in bunches. If MLDC is not remodeling the units or making material upgrades, such as changing Formica counter tops to granite, it is not required to undertake the expensive and time-consuming process of putting a project up for an owner vote. This serves owners by allowing MLDC to maintain your units in a first-class manner without the added expense of bureaucratic red tape.
Question: How do you manage replacement projects and associated costs?
Answer: MLDC works diligently to minimize owner expense and maximize owner value of each project. Over the years, we have learned that the best way to manage a project in the Flathead Valley is working with a local company to project manage subcontractors, insurance requirements, and planning and scheduling in conjunction with MLDC. The current company we use is Home Services of Whitefish (HSOW). HSOW identifies subcontractors to do the work and works with MLDC for final approval.
When purchase of case goods, such as furniture, is required we utilize Wright’s Furniture in Whitefish. Years of experience as taught us that this local company offers competitive pricing, excellent product and service in delivery and repair. In addition, they can warehouse the inventory during a large project. In terms of the project we just completed, their ability to warehouse all the case goods allowed us to purchase in bulk, save money and potentially avoid another tariff. They not only deliver to the door, but also remove the old furniture. We sold some of the old furniture, the funds of which we placed into unit reserves. Wright’s disposed of the unsold furniture for us.
As your Managing Agent, MLDC hopes that the above explanations address your need, as owners, for full clarification to these very important questions. Our goal at MLDC is to serve you, the owners, and to maintain a first class resort for you to enjoy as your Gateway to Good Times in the Flathead Valley.
Meadow Lake Development Corp