116 3rd St SE
Cedar Rapids, Iowa 52401
Cedar Rapids condo owners given short time to pay big bills
City tells another condo association to restore siding or face legal action
CEDAR RAPIDS — Realtor Kirk Brunscheen had an offer on a three-bedroom condominium he was selling by Jones Park in southwest Cedar Rapids. But then the agent found out the condo association had levied an $18,000 special assessment due by January.
“That pretty much killed the deal for everybody,” Brunscheen said.
The Parkridge Owners Association, which governs a complex of 43 1970s-era condominiums off 29th Avenue Drive SW, last month assessed condo owners between $10,000 to $18,000, depending on the size of their unit, to pay for replacing a crumbling retaining wall. The initial cost of the project was $600,000.
The board last week lowered the special assessment, with owners of the largest condos asked to pay $12,300 after a lower estimate for a block wall rather than poured concrete one to replace decades-old railroad ties.
“The railroad ties that were used to build the original wall are rotting away, causing the portion of the wall that is holding up the garages to fail,” according to a May 22 letter from the volunteer board to condo owners. “If this is not replaced soon, the association will be liable for damages caused to the neighboring properties, which could amount to more than it would cost to repair the wall.”
The group looked into getting a loan for the work, but “we were denied or asked to come up with a large down payment as well as proof of monthly payments,” the letter states.
Several residents who spoke with The Gazette said they don’t know how they will come up with such a large sum in just a few months. If they don’t, the association could put a lien on their homes.
Brunscheen, who is helping his brother sell the condo, said they plan to cover the assessment with proceeds from an eventual sale, but some other neighbors who only recently purchased condos “are screwed.”
DeAnn Carlson, the Parkridge Owners Association president, confirmed the special assessment in an email to The Gazette, but said she could not elaborate.
More associations
The Parkridge situation highlights the challenges of living in a neighborhood where some functions — such as maintaining structures or treating wells — have been outsourced to homeowner associations, often led by volunteer boards with little experience and high turnover.
The number of homeowners associations in the United States skyrocketed from about 10,000 in the 1970s to more than 358,000 in 2022, according to the Community Associations Institute, a membership organization for associations and industries that support associations.
More than 74 million Americans — and about 290,000 Iowans — live in neighborhoods with associations, and these neighborhoods represent about 30 percent of housing stock, the institute reports.
In condo associations, individual owners own their unit and have joint ownership of common areas, such as lobbies or swimming pools. Often the association is responsible for maintaining the exterior of the buildings. In a homeowners association, each owner owns his or her house and yard and the association maintains areas with common use.
Both groups often are governed by owners elected to serve on a board. Some large associations have paid administrators. Associations usually charge monthly or annual dues and levy special assessments for bigger projects not covered by cash reserves.
“Generally speaking, some local governments are interested in new developments being developed as community associations,” said Daniel Brannigan, the Community Associations Institute’s senior director of publishing.
Developers might propose an association because, with it, the city might allow higher density of homes, he said. Association covenants often allow a developer to retain control of house color, lawn maintenance an other aesthetics while the rest of the units are being built. Associations also may provide for amenities, such as a pool or a park, that aren’t open to the public.
“Some municipal governments are pushing things off to community associations that would have been things the municipality would have done, like trash pickup, street paving, snow removal, lighting and stormwater maintenance,” Brannigan said. “It saves the local municipality some financial responsibilities.”
Cedar Rapids intervenes with Lexington Green
Even as cities offload some of their duties to associations, officials still may have to get involved when there are conflicts or delays.
Assistant Cedar Rapids City Attorney Elizabeth Jacobi sent letters June 16 to Lexington Green Units 2 and 6, two condo associations near 42nd Street NE, telling board members they have 120 days to finish installing siding or risk legal action.
The siding was torn off or damaged by the Aug. 10, 2020, derecho, and some walls have been clad just in green drywall for months.
“Because the properties are not protected from the elements, the condition of the properties not only contributes to neighborhood blight, it poses an increasing threat to health and safety concerns if not promptly corrected,” Jacobi wrote. “Moreover, residents of the units and neighbors alike are reasonably upset with the conditions.”
Jacobi asked the association boards to provide information to the city about contractors hired, work permits secured, agreements in place, disputed terms and a timeline.
Several Lexington Green Unit 6 owners talked with The Gazette in August 2021 about their frustrations with the board, which signed a contract with a public adjuster who was to collect a fee of 10 percent of all insurance payouts. Since that time, there have been disagreements about which repairs are necessary and which might be upgrades not everyone wants.
“It’s at a stand still and nothing is getting done,” condo owner Don Steger, 76, said last week. “The city has said ‘we want them sided’. This greenboard stuff all over is a distraction.”
Condo board president Al Ehler said in an email Friday he did not want to comment until after the board had resolved issues with the contractor and insurance company. Steger said there is an association meeting this week and he hopes for a status update.
What is required with disclosure?
Some Parkridge residents said they were surprised by the special assessment, but association president Carlson told a resident’s mother in a July 24 email the board talked about the project at the association’s annual meeting last October.
“It has been needed to be repaired for years and no one has taken measures to get it fixed,” she said. “When I became president last year, it was brought to my attention.”
The group sought several estimates for the work, which involves moving utilities and demolishing garages bolstered by the retaining wall. The board added a 10 percent cushion — $60,000 — for inflation, according to a breakdown provided to members.
Associations are not required to preemptively disclose special assessments or big projects that might require a special assessments in the future, said Patrick Ford, an attorney who works in real estate law at the Leff Law Firm, in Iowa City.
“The HOA wouldn’t have any obligation to say anything to a buyer unless a buyer specifically asked about it,” he said. However, “if the seller knew about it, It could be a disclosure problem for the seller.”
Often buyers will put a clause in a purchase agreement requiring the seller to make disclosures about the HOA, including the amount of dues, Ford said. “That gives the buyer a lot of protections,” he said.
Association members have responsibility to attend meetings and read minutes to know what is happening in their neighborhood, Brannigan said. The institute has free online resources, including budgeting tools for HOA boards, tips for hiring contractors and guides to drought-resistant plants.
“Being a homeowner in a community association is the most local form of democracy as possible. It’s neighbors governing neighbors,” he said. “If you don’t like how the community is being run, then run yourself.”
Before buying in a homeowners association
Potential buyers should hire a lawyer to do a title examination, which will ensure there are no liens on the property and let you know if its part of a homeowners association.
If there is an HOA, ask to see the group’s finances to make sure it has cash reserves for major projects, like roof replacement. If the complex has an elevator or pool, there should be money for repairs or replacement.
Read the association’s declaration of covenants and bylaws, which will outline important details such as whether you can have pets and how common areas are maintained. These records also will outline what share of properties may be rental units.
Iowa Code Chapter 499B says association board meetings are open to members and the board must give members notice of meetings at least seven days in advance. The law also states “official records of the board of administration must be open to inspection and available for photocopying at reasonable times and places.”
Comments: (319) 339-3157; erin.jordan@thegazette.com
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