Under-estimated budget from builder

[Avalon]

What is the name of your state? NJ

Our 6-unit new-construction condos were turned over from the builder a few months ago. The dues had been surprisingly low, so I figured there was something fishy with the budget they used to calculate the dues. Turns out many maintenance items were left out of the budget (cleaning, mowing, etc.) because the developer used his own people to do that stuff. Also, he only estimated $300 each for the annual water bill and electric bill. The building has been in existence since 2006 so there should have been a year's worth of bills to rely on in creating the budget. We found out the 3Q water bill ALONE was over $600! And someone in his office told us the electric bills averaged $180/mo.!
So now, we have a huge deficit and will have to raise dues and do a special assessment to catch up.

My question is: If we can track back and get the bills for the past year, which will prove the budget was severely under-estimated, do we have any recourse against the builder? He sold the last unit in Nov. but we are stuck with the deficit. Deceptive sales practices, or make him kick in, .... anything we can do?

[HomeGuru]

Originally Posted by Avalon

What is the name of your state? NJ

Our 6-unit new-construction condos were turned over from the builder a few months ago. The dues had been surprisingly low, so I figured there was something fishy with the budget they used to calculate the dues. Turns out many maintenance items were left out of the budget (cleaning, mowing, etc.) because the developer used his own people to do that stuff. Also, he only estimated $300 each for the annual water bill and electric bill. The building has been in existence since 2006 so there should have been a year's worth of bills to rely on in creating the budget. We found out the 3Q water bill ALONE was over $600! And someone in his office told us the electric bills averaged $180/mo.!
So now, we have a huge deficit and will have to raise dues and do a special assessment to catch up.

My question is: If we can track back and get the bills for the past year, which will prove the budget was severely under-estimated, do we have any recourse against the builder? He sold the last unit in Nov. but we are stuck with the deficit. Deceptive sales practices, or make him kick in, .... anything we can do?

**A: the answer is yes. Also review the reserve study.

[Avalon]

Thank you. I did get a copy of the water bills, at least, and the problem is the builder based the annual budget on a winter billing for one quarter. The rest of the bills were much higher because the lawn sprinkler was in use, but of course by that time he was selling the units with that bogus estimated budget. I'm sure the reserve study is bogus too, but the problem is we have no money to get a professional one done because we're so far in the hole.

[HomeGuru]

Originally Posted by Avalon

Thank you. I did get a copy of the water bills, at least, and the problem is the builder based the annual budget on a winter billing for one quarter. The rest of the bills were much higher because the lawn sprinkler was in use, but of course by that time he was selling the units with that bogus estimated budget. I'm sure the reserve study is bogus too, but the problem is we have no money to get a professional one done because we're so far in the hole.

**A: if you do not want to spend money on hiring a HOA attorney then you're stuck.

[Zigner]

I'm confused here - the builder used the only references he had to make an estimate. I'm not sure I see any recourse here...

[HomeGuru]

Originally Posted by Zigner

I'm confused here - the builder used the only references he had to make an estimate. I'm not sure I see any recourse here...

**A: on the contrary, read the post again.