[Katie Oliver]

California: New condo community in San Ramon hit by hefty increase in HOA dues

Hillcrest/Ridgeview is new condominium community within The Preserve, a new masterplan community in San Ramon, California being built by Lennar and Toll Brothers and consists of single-family homes, town homes, and condominiums.

Like other condominiums in California, the Hillcrest/Ridgeview condominiums insurance has been dropped by Farmers Insurance and we are experiencing a ridiculous increase in the HOA dues with the temporary insurance policy.

The Ridgeview/Hillcrest condominium sub association dues increased from $262/month to $786/month and The Preserve master association dues increased from $95/month to $136/month, an increase that was not approved by the homeowners. Starting February 1st, the condominiums’ homeowners are paying a total of $922/month in HOA bills. They have no choice but to pay the 164% increase in HOA dues. HOA board seats are still held by the developer with only one seat for the homeowners.

Within the condominium community that consists of 182 units there are 28 Affordable Below Market Rate units in which low-income families lives in. The BMR homeowners must pay $922/month under the equal-share HOA dues formula set by the developer.

Low-income families will be the first to experience foreclosures if this situation is not resolved as soon as possible. I personally failed to pay the new assessment and made a partial payment for the month of February 2023.

Hillcrest/Ridgeview community was built by Lennar. There is another neighboring condominium under construction by Toll Brothers within The Preserve Masterplan and surprisingly they are selling those new condominium units with estimated HOA dues equal to our old dues before the increase. We heard a claim that Toll Brothers insure their own condominiums.

Because most of us are new homeowners, we do not know how to navigate this situation properly. Homeowners already pressured the HOA board to fire the insurance agent and hired another one. The initial quote from the former insurance agent were to increase the HOA dues to $1,700/month. The new insurance agent was able to get a lower quote that increased the total HOA dues to $922/month instead of the $1,700.

There have been informal discussions between homeowner groups that includes the following:

Fire the management company.
Get more insurance agents involved and try to find more quotes.
Get more homeowners on the board.
Try to exclude our community from the fire zone maps as our area never experienced fires before.

Long story short, the community is panicking and don’t know which path to pursue, and which path is the right path.

I thought of writing you this email hoping to get some guidance from an expert like yourself.

[Katie Oliver]

Hello I am reaching out to find out whether your organization could assist the many condominium owners in California who purchased units with aluminum wiring, which was widely used throughout the US from the 50’s to the 70’s.

In 2017 our fire insurance was approximately $86,000

After it was discovered we have aluminum wiring, our insurance has increased each year…$250,00, $450,000, most recently $650,000

In addition to the extraordinarily high insurance cost, we have been dropped by insurance companies because they do not insure aluminum wiring and we are left with only two or three insurance companies that will insure dwellings with aluminum wiring.

Our dues have doubled.

The Consumer Product Safety Commission determined there are only three mitigations for aluminum wiring, all of which are costly:

1. Rewire

Cold weld of copper to aluminum wire.
in every light switch and plug by:
2. COPALUM cold weld of copper to
the aluminum wires.
3. Alumicon pigtailing copper to
aluminum

The cost for pigtailing is $300 to $500 for every light switch and plug, again, an expensive hardship to homeowners, especially our elder on fixed incomes.

We have a small majority of units that have mitigated the aluminum wiring but we would have to insure that each homeowner had their units done.

On top of the cost, after discussing COPALUM mitigation with the very limited companies that would even consider insuring aluminum wiring, we cannot get a commitment from them that they would consider COPALUM a remedy and lower our insurance rates.

We are stuck between a rock and a hard place given that are CC &R’s and our Lender mandate we carry fire insurance.

Our situation is not that much different than the homes and Condominiums that were affected by wildfires and are denied insurance or find it at an exorbitant cost.

[Katie Oliver]

Our situation here is very similar in that our upcoming insurance renewal has increased 5x fold but only covers fraction of our community while forcing us (the homeowners) in paying massively large assessments due to being with a HOA & management company that claims it’s receiving bids that are all the same; although we are finding out that it appears they are using a broker (Socher Insurance) that has a ‘locked market’ preventing us from getting additional fair quotes from others.

[Katie Oliver]

Our HOA master policy is set to go from 35K a year to 780K a year, perhaps due to fire line districting. Can you recommend anyone who can perhaps speak to this?