MMT HOA Minutes – November 19, 2018

Marymoor Trails Homeowners Association
Board of Directors Meeting
November 19, 2018

6:30PM – Special Budget Ratification Meeting
6:45PM – Executive Session BOD Meeting

 

A special Budget Ratification meeting of the Marymoor Trails Board of Directors was held at Morris Management. Following this, the regular Board meeting took place.  Board members attending were:  Michael Niksa, President; Van Chesnutt, Landscape; Linda O’Hara, Secretary; and Tim Hollingshead, Morris Management.   Josh Gibson, Treasurer, was unable to attend.

 

Budget Ratification Meeting

Washington state law requires that homeowners be given an opportunity to disapprove any proposed budget and dues increase for the coming year. Disapproval requires a 51% “no” vote by homeowners. All MMT homeowners were notified in advance and invited to this special meeting. We did not have 50% in attendance; therefore the 2019 budget was approved.

 

Homeowners’ Forum

Following the Budget Ratification meeting, the Board proceeded into regular business.  Two homeowners were in attendance; both seeking clarity as they have been unable to sell their units.

 

  • Rental Cap – The MMT rental cap is currently set at 15% of units, the maximum suggested by banks. Resident purchased a 3-story unit two years ago; says his mother cannot climb the stairs and requests a hardship exemption. Resident suggested that lifting the rental cap would increase property values – ideally allow as many rentals as possible, that this would make the property very valuable especially with the new mortgage rules after the last economic crash.  Every member of the board disagreed citing bank preferences when considering home loans, appraisal factoring high percentages of renters as a depreciating element, and an understanding that the rental cap adds to the value of the property for folks who wish to live here.

Owner wants to understand the reason for having a rental cap at all.  Tim explains that it is in the original Declaration documents, which were set up at the time the Association was formed. These are really hard to change. It can only be changed by amending the Declaration with 60% of owners voting yes. Owner wants the rental cap changed because his mother cannot climb the stairs, and he cannot rent the property, and believes problems selling are because of the rental cap and high monthly dues. The board deferred to Tim on whether a hardship exception is permissible with our Declaration as a cursory review implied that it was not. Tim will check with our attorney to review the rental caps and policies.

 

Outcome: The Board moved to wait to hear from Tim and the attorney regarding the rental cap.

 

  • Special Assessments vs Dues Increases — Resident claims he is not getting value from his property. Says dues of nearly $600/month are making his unit unsellable.  Resident says we should instead have a special assessment once every 5 years and keep monthly dues very low – in the range of $100 per month – that this would increase our property value.  The Board said our reserve study strongly recommends we fund known upcoming needs by regular monthly dues and that we intentionally took a careful approach this year for a significantly more accurate reserve study.  The Board added that we kept our dues increase low (3%) last year and took a middle-of-the-road approach (5.5%) this year, and that dues could have increased 7.8% if we had funded everything fully.  In 2018 and going forward the board has cut cost in several ways and plans to continue this effort into the future.  The Board cited some associations — not ours — have had $50,000, $75,000 and $85,000 special assessments to fund painting, siding, roofing, etc. Tim also advised that special assessments are broadly disliked by residents at his other communities and that Morris Management collects a percentage oversight fee for running any special assessment.  Our practice is pay-as-you-go, funding known upcoming maintenance (decks, asphalt, painting, alarms, roofing, siding, fences) with monthly dues, as recommended by reserve studies.

 

Resident countered the Board’s policy of pay-as-you-go citing the potential special assessment for Building B. The Board re-iterated that the reserve study is a tool for long-term predictable expenses and that foundations (the issue with building B) aren’t an item with a predictable, expected failure rate.

Outcome: The Board moved to continue the practice of funding normal expenses with dues and avoiding special assessments per the recommendations of our hired professionals at Morris Management and Reserve Study Group.

 

  • Bldg B Project Overview and Resale Certificate — Resident asks if it is possible that Bldg B issues will all be covered by regular monthly dues, rather than by special assessment. This is a valid question, and we do not know the answer, as we do not know what that amount will be. The resale certificate must disclose to any potential buyer all known issues that may impact a property. Tim is reviewing the MMT resale certificate with our attorney to reflect Bldg B slab work, current foundation monitoring, and the fact that we will not know status for several months, when measurements are taken again.
  • The owner requested that we remove the disclosure or place some sort of maximum value on the resale certificate, so they can negotiate with potential buyers. Board defers to Tim on this. Tim has consulted with attorney and found we can give an estimate of the range we might need, but we cannot take anything out as it represents a liability that we must disclose to a potential buyer.
  • The Board gave an overview of Bldg B project to homeowner. Two slabs have cracked; one foundation is 3” lower in one corner. The slab can settle and crack without any relation to the foundation. We have inserted foam fill under the slab to address slab cracking and fill in the underlying soil settling. The soil study was not promising, but the foundation is very deep (a good thing) and is being monitored. Monitoring will be updated in six months. Money already spent on Bldg B was not allocated for it — it was borrowed from other projects like future roofing, siding, and fencing. We have saved money in other areas and have raised dues to help cover. We really don’t know if it is stable or continuing to settle, if this is an ongoing project or not. In a normal year, the association can absorb approximately $30,000 if we must for unexpected expenditures such as this. If monitoring turns out promising, we may be able to just absorb costs in the existing budget. If it does not, we may have to pay up to the worst-case scenario. We will not know the complete answer until 2019 or later. The Board continued to assert that we are not professionals on foundations, project management, special assessments, or legal matters and are deferring to the professionals we hire to make the appropriate decisions in this issue.

Outcome: The Board moved to have Tim amend the resale certificate language, with the attorney’s review, to include a price range estimate per unit based on the worst-case scenario provided by our project manager at Improcon to help the residents in negotiations while selling their homes.

 

Treasurer’s Report — Reserve account is $146,000.   Checking account is $45,000.

Maintenance Report – Michael — Nothing to report.  All work complete for the season.

Landscape Report – Van — All work complete for the season — M and N drainage done.

 

Next Meeting:  There is no meeting in December.  The next Board meeting is January 14, 2019, at the residence of Linda O’Hara, Unit #133.  The Annual Meeting of Homeowners will be held on February 25, 2019 at Morris Management.