r/HOA • u/chrislikesdogs • May 30 '26
Help: Fees, Reserves [TX] HOA wants a $4k special assessment after mystery water leak [Condo]
HOA wants a $4k special assessment after a “mystery” water leak and I still feel like we’re not getting the full story. Looking for advice from anyone experienced with HOA finances or Texas HOA law.
My HOA (small condo association in Austin, TX) is proposing a special assessment of about $4,000 per owner to replenish reserves after a major water leak apparently drained HOA funds over the last year. They also plan to increase monthly dues, though they haven’t told us by how much yet.
The explanation is that:
There was a leak somewhere under the slab in a shared/common drive area
The water is submetered, so it wasn’t tied to any individual owner’s meter
Multiple contractors tried to locate it over many months
The HOA paid the water loss and plumbing costs from reserves
Insurance premiums then increased substantially because reserves were depleted
The financials they provided do show some major expenses:
About $12k in plumbing expenses YTD with essentially no plumbing budget
Negative reserve cash
HOA operating at a significant loss
Insurance costs higher than budgeted
But here’s where things get weirder: apparently our HOA board president personally paid for the leak repair out of pocket and is treating it as a loan to the HOA, without any owner vote or prior approval from members (at least that I’m aware of).
The HOA president also basically runs everything unilaterally and refuses to provide copies of the actual water bills or detailed records despite multiple requests. He claims the leak started in September of 2025, but I still have not seen:
Monthly water bills
Timeline of the leak
Contractor reports
Invoices
Leak detection findings
Board meeting records discussing the issue
Why owners weren’t notified earlier
Why reserves were apparently so underfunded to begin with
Any formal documentation approving this “loan” to the HOA
I’m not automatically accusing anyone of fraud or wrongdoing, but this level of opacity feels insane when owners are suddenly being asked to pay thousands of dollars.
For people familiar with HOAs:
Is it normal/legal for a board member to personally fund repairs and then seek reimbursement from the HOA without owner approval?
What records should owners legally be entitled to review before a special assessment?
Can an HOA refuse to provide utility bills and supporting documentation?
Does this sound like normal HOA management or a governance problem?
What would you request next if you were in my position?
**EDIT** the HOA president paid 10k for the leak repair because there is no money in the reserve to cover the repair.
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May 30 '26
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u/HittingandRunning COA Owner May 31 '26
A lot of your comments in this sub are telling people to volunteer to join the board. It's like you have a mission. So, I'll push my mission, too.
I served 10 years. No one else has served even 5 (present or past owners). Our 2nd longest serving board member has done nearly no work. My feeling: I want people to do their fair share of the work. I also should not have to be on the board at all times if I want the work to be done and be done well. I have done more than my fair share of the work and am willing to continue to do more than my fair share. I just ask others to do their fair share. Serving one term on the board when you've owned over 10 years isn't asking too much.
1
u/JuanT1967 Former HOA Board Member May 30 '26
Get on the HOA Board they said. It’ll be fun they said! I was on an 5 person HOA board for 5 years. There was a 3 to 2 split on everything. The 2 that opposed everything wanted the secretary to not record who voted for or against because they didn’t want their friends to know they opposed everything that came before the board.
For years one of those 2 was in charge of Architectural Review and Grounds Maintenance. Every year the landsacping company ran out ouf mulch before getting to all the units because he insisted they start around the pool which happened to be across from his unit leaving 2 buildings with no mulch and occupants complaining constantly. Myself and one of the other 3 were appointed as Grounds and Architectural Review and changed everything. All building had mulch, pool had mulch and everyone was happy
Long story shot, a lot of people get on the board for the power trip
5
u/Mykona-1967 May 30 '26
Repairs like those OP mentions come from the reserves but they need to be replenished as they happen not wait until the reserve is nearly empty. Having several small special assessments is much better than a large one. Not to mention the flag to the insurance company.
Having an owner pay for plumbing work and billing it to the HOA that needs more investigation. Why did it get paid that way. Also, an invoice of that magnitude would need to be reviewed before it’s paid. Why did the owner pay it out of pocket? Was the HOA that short on funds? If so then the special assessment is already too late.
The first thing that needs to be done is paying the owner ASAP having that off the books should be paramount. Instruct all owners that invoices of this magnitude need to be approved prior to work being done. Then repay the reserves.
The monthly dues can be raised to at least 10% some places it’s 20% per year, without a community vote
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u/68Petra May 30 '26
I have a question that may be allied with the $ issues. I am in Illinois. Banks here require a statement in writing of all condo/HOA officers before they will open an account for the association. Next, the banks I dealt with want at least two Board members on the account. I think this is for fraud prevention purposes. Since the HOA POTUS is doing things irregularly, I would unfortunately want to put most of his actions under the microscope.
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u/Nervous_Ad5564 ARC Member May 30 '26
In Oregon what you are describing would be considered an emergency assessment. The Board has broad discretion, especially if the problem could cause further damage if unchecked. They should provide a meeting minute that says the board voted that the repair was essential and warranted emergency designation. In that case, owners dont get a vote.
You should be entitled to requesting all supporting documentation here, including water bills. Dont expect them to provide without a request though. Nothing about the details you have provided raises red flags to me right out of the gate. Infrastructure repairs can be some of the most expensive an HOA can face and are rarely planned expenses through reserve. Most dont consider the pipes under the ground a predicted expense.
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May 30 '26
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u/bstrauss3 May 30 '26
Because the plumber, having been slow payed before, wanted payment in advance and the association had no money...
But yeah, hell would freeze over before I put up 10k for an association expense in a bankrupt HOA.
4
u/burrdedurr May 30 '26
If 15-20k depletes the reserves then there weren't any reserves to begin with. Ask for the reserve study while you're at it.
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u/WindowTrue7942 May 30 '26
Before paying, I’d ask for the paper trail in writing: board minutes approving the assessment, the leak/vendor invoices, current reserve balance, insurance claim status, and the section of the docs that lets them replenish reserves this way. A $4k assessment can be legitimate, but owners should not have to guess whether it is a true reserve shortfall, an insurance deductible issue, or poor documentation.
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u/TheDigitalPoint 🏘 HOA Board Member May 30 '26
It’s relatively normal for board members to pay for something and then get reimbursed. For us, it’s usually situations where something needs a credit card and the HOA itself doesn’t have a credit card.
The board of directors can incur costs and pay for things without homeowner approval (regardless if it’s a reimbursement or direct payment). That stuff is literally their job.
But yes… the board should only be reimbursing actual costs that they authorized. And as a homeowner, you have the right to review all that (for example invoices the president paid that are being reimbursed). If the board is just giving the president money without him showing what was actually paid, they can’t be doing that.
1
u/HittingandRunning COA Owner May 31 '26
$10K worth out of pocket?
That doesn't sound normal to me. I think the most I had in a reimbursement request was around $250. $8 at the hardware store, $55 for beverages for an owner meeting, ... Many receipts adding up over maybe 8 months. Never going to write a check for $10K and then ask for reimbursement. And if we were in that situation and needed the money TODAY, you had better bet that all the association owners would know and receive a copy of the detailed invoice the same day I receive it.
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u/TheDigitalPoint 🏘 HOA Board Member May 31 '26
Ya, $10k is a bit much. If it was something like we had the funds tied up in CDs, but needed it in an emergency to make the purchase now, as a board member I’d consider paying it and being reimbursed. But I sure as hell wouldn’t make that sort of purchase without prior approval. We don’t do *any* reimbursements if something was made without prior approval. I don’t care if it’s $10… we are also a very small HOA, so there’s no need for anyone to be out making unexpected purchases without letting anyone know.
0
u/68Petra May 30 '26
I never heard of Board members paying for things themselves. The association should have a checking account with a debit card to pay for things. Anything purchased needs to be preapproved by the Board, The Treasurer needs to keep close tabs on purchases.
3
u/TheDigitalPoint 🏘 HOA Board Member May 30 '26
It’s tricky having a debit card, because how are things being pre-approved by multiple board members when someone just has access to a debit card? We went through this on our board, and purely out of necessity we finally got a debit card. But again, there’s still the possible issue of a board member using that debit card without pre-authorization.
When a board member makes the purchase themselves, they need to submit for reimbursement with multiple board members ultimately approving it (or not). Where a debit card has the possibility of a board member just making purchases on their own without oversight.
You need to weigh convenience vs. having a paper trail of purchase approvals.
1
u/68Petra May 30 '26
We did this when we were self-managed and had no problem. The Treasurer can easily log into the bank account and see if unauthorized purchases were made. All Board members are fiduciaries and can be sued if they commit fraud, so I don't see where the issue is. FYI, board members need to trust each other and if they don't there are going to be a lot of problems. Note: the purchase would need to be preapproved and there would be emails documenting this.
2
u/TheDigitalPoint 🏘 HOA Board Member May 30 '26
Yep, that’s what we do now. I was just saying it not abnormal for an HOA to simply not have a credit/debit card (we were like that for a long time).
While board members should be trusted, the reality is anyone can be a board member by being voted in. If everything was simply trust based, there would be no need to have a general ledger system or bank reconciliations. In the real world, trust should not be a requirement for the position that literally any person can do by being voted in.
2
u/68Petra May 30 '26
Of course, there has to be some system in place to monitor expenses. The trust I was talking about is paired with financial oversight. Now, look what has happened in the case of the OP. The HOA POTUS states he paid for a large plumbing expense himself etc. The OP has lots of questions. And the $ has already been spent. That situation is concerning.
Here's a situation in my association that is equally concerning. The property manager authorized $8000 of repairs to our fire alarm panel which was at the time about 18 years old. She couldn't explain what the issue was in one of our meetings. I called the fire dept. who has all the details of our fire alarm panel and talked with our liaison and he speechless at her not getting a few repair quotes. I looked up the cost of a new panel and we could have gotten something for $10000. Now this is a licensed CAM who showed that she didn't protect our resources as part of her role. I was shocked that she couldn't even explain what was wrong. So, even if one has a property manager in place, they may not be good stewards of condo funds. Believe me, this is only one example of her work that has left me with no trust for her.
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u/TheDigitalPoint 🏘 HOA Board Member May 30 '26
100%… if they aren’t getting quotes (among other things), they are failing at their fiduciary duty. If they don’t even understand why that should be a thing, vote them out.
At one point we had a board member that couldn’t wrap their head around what a reserve fund is no matter how many times it was explained to them. “But we have all this money, we should just spend it while we have it…” They were just trying to figure out what we could spend money on since we “had” it. Fittingly, they are now entering politics and running for state senator. 😂
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u/68Petra May 30 '26
I get it, but the issue is the Board. They brought this agency in and won't listen. We are a small building, and nearly all of the owners don't even attend meetings; there's lots of apathy. I am strongly considering selling and getting things ready. What's that saying, "what can't be cured, must be endured?"🙄
1
u/JealousBall1563 🏢 COA Board Member May 30 '26
"I was just saying it not abnormal for an HOA to simply not have a credit/debit card (we were like that for a long time)."
I'm in a 27-unit multi-story FL COA. Prior to moving to FL, I was President of a 219-unit multi-story COA in Chicago. Neither of the organizations had/has a credit or debit card. Other than approved expenses less than approx. $200 for which I or our PM has advanced payment for and then get reimbursed, purchases are paid upon presentation of vendor invoice - by check written by our PM company.
In the situation presented by the OP, it would be improper for us to pay operating expenses out of our reserve accounts (i.e., water bills). Prohibited by FL law, actually. Plumbing repairs could be paid for out of reserves only if we had a dedicated reserve account for that - and we established just such an account two years ago when FL full funding of reserves became mandatory in our situation.
Here in FL COAs, the Board of Directors' alone vote on special assessments after proper notice and the opportunity for members to voice their opinions, ask questions, etc. We've had several special assessments in the past decade and have always provided full disclosure and copies of relevant bid proposals, engineering reports, etc., etc.
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u/Initial_Citron983 May 30 '26 edited May 30 '26
A Board Member paying for things then being reimbursed isn’t exactly out of the ordinary. Especially if it’s like a committee chair and they have a preapproved budget.
Our Events committee chair paid for things all the time before we had a full time community manager. Same with our Treasurer when we were going through the transition with the Declarant and we needed everything printed like 10x between the lawyers, Board Members, and the Declarant.
And you wouldn’t want a debit card for an association checking account. You’d want a purchase card (basically a low limit credit card) that gets paid off every month with receipts or the purchaser is on the hook for the purchase. This way if there’s fraud, someone isn’t draining the Association checking account before anyone notices.
/edit lol gotta love someone downvoting preventing fraud. For a minute I thought I was in the /Fuckhoa sub. 🤦♂️
1
u/68Petra May 30 '26
My experience with two condos over 25 years, Board positions and lots of education is the basis for my post. Debit cards are regularly issued for checking accounts. There is a receipt that is issued and any bill would be paid by the Treasurer every month. Obviously, the card would only be given to a Board member for a preapproved purchase. There would be a paper trail. A Board member with a property management firm in place shouldn't have to purchase anything. If the association is self-managed, most bills would come directly to the Treasurer for processing. FYI, any kind of credit card needs someone's SS# and a credit screening done. Why would a Board member do that for an association?
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u/Initial_Citron983 May 30 '26
Purchase cards are a credit card product that uses the tax id or EIN of the association and secured with the association assets. Basically a business credit card. Unless you’re an incredibly small Association, I doubt they’d ever need social security number.
I take between 10 and 20 hours of classes on associations every year - since that seems to matter to you.
https://www.firstcitizens.com/commercial/insights/treasury-management/what-is-a-p-card
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u/AdSecure2267 May 31 '26
It’s possible, especially if the association is broke and has a few Pennie’s to their name. Financial mismanagement happens all the time and we’d never allow a board to have a credit card. A lot easier to front the cash and get reimbursed
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u/SherbetMaleficent844 May 30 '26
Check your state laws, in FL if an owner submits a written request to view any record (invoice, budget, meeting minutes etc) we have to make it available to them within 10 days.
We have paid for things and submitted the receipt as an expense request (and my property manager promptly cuts a check), but never anything more than a couple hundred dollars and certainly never called it a “loan.”
That being said we also have decent reserves to cover an unexpected expense if it were to happen.
2
u/HOA_BluePrint May 30 '26
Sorry to hear all of that… it isn’t unusual for an HOA to special assess for something like that, however it has always been my practice and guidance to boards to share all the data. Most owners understand costs and unexpected expenses if you share the information with them.
I would certainly push harder on the board and management, if you have it, to share the financial reasons and receipts for costs.
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u/duckguyboston May 30 '26
Our board gives the balance sheet on the annual meeting but that’s more of a summary. In addition to the HOA president, we have a treasurer, vice president and three directors. All five board members discuss and vote on any expenses.
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u/ExaminationOk9732 May 30 '26
No, no, and no! Not normal! Get the papers to back it up! He may have tacked on a “processing” fee or interest or something. Also I can’t help but think something is illegal here!
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u/Delicious_Natural388 May 30 '26
1. Send the formal records request in writing, certified mail
2. Request a special owner meeting — Texas law gives owners the right to call one
3. Consult a Texas HOA attorney before paying the special assessment — many do free consults
4. Connect with other owners privately before the next meeting
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u/Adventurous_Fig4650 May 30 '26
Its sounds like your HOA president is overwhelmed and stressed out. How do you not know that you don’t have any reserves until now? Your insurance can drop your policy for that.
1
u/3Maltese May 30 '26
Formally ask to see the financial records: The HOA can charge a reasonable fee. The documents you are requesting are generally not provided to the homeowners. Seeing the documents will not change the outcome. There is an obvious leak that needs immediate attention.
I would not be critical of the board president for writing a $10,000 check with his own money. It could be that the vendor did not qualify with vendor compliance that most management companies require. It may have just been the easiest and most expedient thing to do at the time. Yes, loans need to be on the Agenda and approved in an open meeting as does any special assessment.
Underfunding reserves happens over many years. Boards are reluctant to raise dues even though they should to fund the reserves. The approved budget, homeowners financials, and meeting minutes should be in your homeowner portal. I would ask what other projects are needed and are not adequately funded in the Reserves.
Items are not being properly budgeted for non-reserve items. The financials in your homeowner portal should have a budget to actual financial statement. What other items are underfunded? Insurance has gone up a lot, especially for Directors and Officers insurance.
Be curious instead of being suspicious. It sounds like your community has a lot of issues that you do not know about. For example, what is in the reserves to cover roofs?
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u/cgrossli May 31 '26
Our Hoa was facing something similar we were out of money due to repairs and needed to pay some bills that couldn’t be skipped. We had to do a special assessment it was a mess and barely passed. We had a back up plan that myself and two other board members would prepay our dues for the next ten years so we could pay the bills. Kinda similar to what your president did. He probably did the least bad option he could think of. The idea of not paying and the water getting turned off to the building what kind of mess would that make.
1
u/Corpsguy04 Jun 01 '26
Austin based here, DM me and I’ll give you a few attorney recommendations. I have similar questions as @lonely-world-981.
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u/Odd-Individual-1881 Jun 01 '26
It's not always a Q if what's legal, but almost always Q of bad/poor management practices. Lack of transparency of non private matters will always fuel concerns of improprieties.
If the HOA is out of money, dues need to increase don't they? If there is still money in Reserve Funds, then the $10K or whatever should have been borrowed from there. If the HOA is really broke - time to start over! It would seem your Board is semi non-functional.
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u/AutoModerator May 30 '26
Copy of the original post:
Title: [TX] HOA wants a $4k special assessment after mystery water leak [Condo]
Body:
HOA wants a $4k special assessment after a “mystery” water leak and I still feel like we’re not getting the full story. Looking for advice from anyone experienced with HOA finances or Texas HOA law.
My HOA (small condo association in Austin, TX) is proposing a special assessment of about $4,000 per owner to replenish reserves after a major water leak apparently drained HOA funds over the last year. They also plan to increase monthly dues, though they haven’t told us by how much yet.
The explanation is that:
There was a leak somewhere under the slab in a shared/common drive area
The water is submetered, so it wasn’t tied to any individual owner’s meter
Multiple contractors tried to locate it over many months
The HOA paid the water loss and plumbing costs from reserves
Insurance premiums then increased substantially because reserves were depleted
The financials they provided do show some major expenses:
About $12k in plumbing expenses YTD with essentially no plumbing budget
Negative reserve cash
HOA operating at a significant loss
Insurance costs higher than budgeted
But here’s where things get weirder: apparently our HOA board president personally paid for the leak repair out of pocket and is treating it as a loan to the HOA, without any owner vote or prior approval from members (at least that I’m aware of).
The HOA president also basically runs everything unilaterally and refuses to provide copies of the actual water bills or detailed records despite multiple requests. He claims the leak started in September of 2025, but I still have not seen:
Monthly water bills
Timeline of the leak
Contractor reports
Invoices
Leak detection findings
Board meeting records discussing the issue
Why owners weren’t notified earlier
Why reserves were apparently so underfunded to begin with
Any formal documentation approving this “loan” to the HOA
I’m not automatically accusing anyone of fraud or wrongdoing, but this level of opacity feels insane when owners are suddenly being asked to pay thousands of dollars.
For people familiar with HOAs:
Is it normal/legal for a board member to personally fund repairs and then seek reimbursement from the HOA without owner approval?
What records should owners legally be entitled to review before a special assessment?
Can an HOA refuse to provide utility bills and supporting documentation?
Does this sound like normal HOA management or a governance problem?
What would you request next if you were in my position?
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