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How do HOA’s handle exterior maintenance issues?

All condo/townhouse/planned unit developments basically handle HOA maintenance the same way. As defects are discovered by owners, those defects are presented in writing, (typically via contractor bids or inspection reports), and then the HOA board decides if and when to have those items corrected. Part of the HOA payment goes towards a Reserve account. This account is used for paying commons-area maintenance and repairs. If the Reserve account does not have enough money to cover a needed repair, then either a Special Assessment is charged to the owners or the HOA dues are raised to pad the Reserve account to pay for the repair in the future.

Hypothetical example for an established (not brand new, first sale builder units) complex: A 6-plex needs a new roof and that roof costs $60k:
* If the Reserve account has over $60k available in it, (this Reserve account accrues like a standard savings account since each month all owners pay their HOA dues a portion of those dues – usually called Mgmt on RMLS under the field of what the HOA includes – will go into Reserves), then the repair is scheduled and the roofer is paid by the HOA.
* If there is only $20k in the Reserve account and the repair cannot wait until the Reserve account accrues to $60k, then each of the 6 owners will have to pay a Special Assessment for the $40k needed – $40k divided by 6 = $6,667/owner. This money can be paid by each owner in one lump sum or in monthly payments determined by the HOA, as the HOA might need to get a loan for the balance.
* If the repair is necessary but not needed immediately – say the current roof will last another 5 years – then the HOA could decide to pad the Reserve account in anticipation of the repair. So they could increase the HOA dues for all owners immediately so that in 5 years the Reserve account will completely cover the cost.
Almost all HOA’s pay for a detailed inspection report every 10 years to assess the condition of the property and determine and plan for upcoming repairs. This keeps owners from being blind-sided by big ticket items and allows for a gradual padding of the Reserve account if the account balance is too low to pay for future maintenance/repairs.
For brand new, never-before occupied complexes, the roof, and all other elements are new. If defects are found they would be covered by either the builder’s warranty or the manufacturer’s warranty. Things that would not be covered by the HOA would be owner-caused issues or issues inside the units. All HOA’s have an exterior insurance policy. Each owner will also get insurance but this will be for the interior 4 walls of your particular unit.
Caveat: There have of course been instances where huge construction defects have been found in new developments. In these cases, the HOA files a lawsuit against the builder. These typically resolve with the builder’s insurance covering the damage, but they take years to settle and have sometimes not covered the full extent of the needed repairs. Owner special assessments come into play to pay the difference if this happens.
All of these potential issues exist in a SFR too, including brand new homes. But on those homes, the individual owner is responsible for paying for the repair entirely or using the warranty or going after the builder themselves. In a complex, the HOA divides up these costs amongst all owners and/or takes care of seeking remedies via the warranty or builder on behalf of all of the owners.
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2018 Portland Neighborhood Statistics

Each year, Portland Monthly Magazine releases some great information on the 95 different neighborhoods in Metro Portland + the outlying Suburban areas. Here’s the 2018 information. If you’d like more information or a personalized market analysis to find out the current value of your home, please contact me at 503-421-2407 or Phyllis@PointClickandPack.com. The Portland market is still selling very quickly. It’s a good time to be a seller!

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Portland’s New Home Energy Score Requirement

Beginning on January 1, 2018, to sell your single family home in Portland, it will become mandatory that you have a home energy score done prior to listing your home on RMLS.

A home energy score provides home owners and buyers comparable and credible information about a home’s energy usage. The score uses the physical characteristics of the house, (size, window types, insulation, roof materials, etc.), and its systems (heating, cooling, etc.) to convey information about what a house’s estimated energy usage is. The score is NOT based on the homeowner’s current energy use, the number of occupants or the types of lighting and appliances present.

Homes are scored on a ten-point scale, with “1” indicating higher energy usage and “10” indicating lower energy usage. Typically, the larger the home is in square footage, the higher the energy score will be, even if the home being assessed uses all of the latest energy-saving devices. It simply takes more energy to heat and cool larger homes. The average Portland home will score a 5.

This standardized scoring system allows buyers to compare different homes on an apples-to-apples basis so long as the homes are comparable in square footage. The assessments show an estimate of the home’s annual energy costs and will also show buyers and sellers where there are opportunities to make energy-reducing improvements. This will help buyers in planning for long-term cost-effective improvements for homes scoring 5 or less.

Currently, only homes located in the City of Portland are required to comply but other cities may follow suit soon. All Counties in Portland are subject to the assessment requirement. The cost of this test is approximately $250 and the test takes about 90 minutes. The assessment and score are available immediately upon testing completion. Condominiums are exempt from testing, as are bank or corporate-owned listings. For newly constructed homes, the Home Energy Performance Report and associated Home Energy Score may be produced based on design documents prior to the construction of the covered building through a Pre-construction Assessment.

Upon completion of a Home Energy Assessment, the home’s report will be publicly disclosed and available at www.greenbuildingregistry.com/portland. Realtors are required to input the score and a copy of the report on the RMLS prior to listing the home. Sellers must ensure that printed copies of the report are available and visible to prospective buyers who view the home while it is listed for sale.

The City of Portland does enforce violations of this code, (City Code Chapter 17.108). Upon determining that a violation has occurred, homeowners may receive a written warning notice describing the violation and the steps required for compliance. If the violation is not remedied within 90 calendar days after the issued written warning, a civil penalty of up to $500 may be assessed. For every subsequent 180 day period during which the violation remains, additional civil penalties of up to $500 may be assessed. Penalties are doled out at the discretion of the City Director.

Homeowners can schedule the assessment online at homescorenow.com. Assessment appointments are typically available within 3-5 days of request. Here’s some more information about what this score entails: https://www.pdxhes.com/about.



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Microhousing in Portland, OR

One of the newest trends in Portland is the Microhouse. Here’s a funny, but accurate, view of the inside of one. In Portland, we’re seeing Microhousing being used as a both an ADU and as a way of life/condo alternative.


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