Upcoming Assessment? Does the Board Know What It's Doing?

July 20, 2015 — We're in the middle of the purchase process and just learned about an upcoming assessment. We're concerned that the board doesn't know what it's doing.

In co-op and condo circles, "assessment" has long been considered a dirty word. But, in reality, it is the cleanest way to fund a project. For the most part, an assessment has a clear start and end date. The funds are meant for a specific project and based on a specific budget. As a shareholder or unit-owner, you know what you are paying for and how long you have to pay for it. There is comfort in knowing and being able to plan for a finite end date to both the project and the cost.

The alternative methods of raising the funds are through common charge contributions or borrowing. While I'm a big proponent of building a reserve fund through common charge contributions, I feel this is a long-term solution in capital planning. The danger in longer-term solutions is that the people making the decision – the board members – aren't always there for the duration. Boards change and, when that happens, so do strategies and agendas. With any long-term planning, you have to hope that board members and their successors have the same fiduciary discipline and similar financial goals.

Assessments are clear in what they are meant to address, leaving little room for misunderstanding and misinterpretation.

A.J. Rexhepi is director of operations & development at Century Management.