Special Assessment to complete Common House
From: Minnesota Malones (MikeJoToddmn.rr.com)
Date: Sun, 15 Aug 2004 18:31:33 -0700 (PDT)
We faced a similar dilemma at Monterey Cohousing when we didn't have enough money to cover the rehabilitation of the main building's kitchen after we completed the development of the new townhouses - because we had chosen to not build the additional units in the original plans, so we had fewer households over which to spread the development and rehab costs of the project. We did a combination of things to take care of it. (We had the additional problem that the person we hired to do the rehab of the kitchen walked out on us in the middle of the project-- a good lesson in why not to take the low bid from someone we thought was a friend, who didn't know what he was getting into and was over his head.) Anyway, we chose to complete as much of the project as we could with sweat equity, bringing in the licensed experts when we needed them (electrician, plumber, etc.) We did a special assessment of all units (for some of us this was $10,000 -- not a small sum). For those who could not pay the special assessment in a lump sum, we got a loan from the Northcountry Community Development Fund, a cooperative lending organization of which we are a member (see their web site at www.NCDF.coop -- if you are a cooperative you might be able to get a loan from them also.) Because the housing cooperative owns the main building, this loan was to the cooperative rather than any single individual, and we could be flexible with people about how much of their assessments they wanted to do in a lump sum versus what they needed to pay finance charges on for their share of the loan. We also were careful to do the appropriate paperwork so that people could add the amount of the assessment to the basis price of their unit, for tax purposes when they sell. It's an improvement to their property and not just normal maintenance, so it's a legitimate item for deducting from the sale price before paying taxes on the gain.
Joelyn Malone


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