Open Forum 2024.10.28 HOA Files Otsego Community Hit with Breathtaking Roof Repair Bills Article10/28/24, 2:45 PM
HOA files: Otsego community hit with breathtaking roof repair bills •Minnesota Reformer
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BY: MADISON MCVAN - OCTOBER 22, 2024 8:00 AM
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Roxanne Williams, a resident of Villas at Pheasant Ridge, has spo4ten out against a roof
replacement project at her community that cost homeowners more than $18,600 each
- resulting in at least one foreclosure. Photo by Madison McVan/Minnesota Reformer.
An Otsego homeowners association charged residents more than
� 18,000 each to replace their roofs, resulting in at least one
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10/28/24, 2:45 PM HOA files: Otsego community hit with breathtaking roof repair bills •Minnesota Reformer
foreclosure and leading residents to question whether the decision
was made in the best interest of the community.
They're especially alarmed that the HOA board steered the roofing
work to a contractor that's a subsidiary of their property manager.
Tony Tran bought his home in Villas at Pheasant Ridge, an Otsego
neighborhood with a mix of townhomes and single-family homes,
in 2019. When he received the approximately $18,600 assessment
for the roof replacement, he called his insurance company —but his
policy only covered � 10,000. He hasn't been able to pay the
remaining balance.
His questions to the property manager and HOA board members
were eventually directed to lawyers, and the charges piled up: Tran's
September HOA bill included more than $2,000 in legal fees for
lawyers' responses to Tran's questions.
"We get charged for asking questions," Tran said.
The HOA's lawyers filed a lien against Tran's home and initiated
foreclosure proceedings. Tran and at least two other residents don't
remember any hail falling on July 13, 2023, the day the roofs were
allegedly damaged.
In Minnesota, HOAs can issue liens against residents' homes for
failure to pay dues or special assessments. Associations can also
charge residents legal fees for disputing charges or even just making
inquiries.
The HOA board and property management company, Gassen,
issued a lien in excess of �20,000 against at least one other property
in the community since July 2023, according to the county
recorder's office.
The roof replacement saga at Villas at Pheasant Ridge illustrates
gaps in the state's oversight of homeowners associations and
property management companies, and the financial pressure HOAs
can put on homeowners. Affected residents say they have little
recourse when they believe their HOA or property manager are
making poor decisions; or, suspect the property manager is steering
expensive work to its own subsidiary on the residents' dime.
More than 1.5 million Minnesotans live in communities with a
homeowners' association, according to c:i��t=��. from the Community
Associations Institute, an industry group.
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HOA files: Otsego community hit with breathtaking roof repair bills •Minnesota Reformer
Homeowners associations enter into contracts with property
management companies to run the community's day-to-day
operations, like snow removal and maintenance. While the HOA
board has the ultimate say indecisions related to the community,
critics say HOA boards —filled with volunteers unschooled in HOA
law —often take their direction from the property management
company.
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Gassers, which manages more than 18,000 homes in Minnesota, put
forward its own construction company to complete the roof
replacement job, leading residents to question whether the
company was enriching itself by using its own subsidiary to do the
repairs at Villas at Pheasant Ridge.
Gassen declined an interview for this story.
Gassen lists Gassen Construction &Maintenance as one of its
divisions on its company website. Kirk Gassen, the owner of
Gassen, is listed as the manager of Gassen Construction &
Maintenance in filings with the Office of the Secretary of State. The
companies share a phone number.
"Our HOA services are designed to help property owners maintain
their properties, keep their communities clean and safe and improve
the value of their investments," the Gassen Construction &
Maintenance website reads.
When Villas at Pheasant Ridge homeowner Roxanne Williams
learned that Gassers Construction &Maintenance would be
replacing the roofs, she wanted to know if the HOA board or
property management company had sought multiple bids for the
work.
She says a Gassen representative told her the company had
obtained two other quotes in 2022 for roof replacements —the year
before the storm. When Williams followed up with the two
companies, she says one told her there was no damage to the roofs,
and therefore nothing to provide a quote for. The other told her
they mainly did work on porches and decks, and had provided a
quote to replace one roof in the spring of 2022, according to
Williams.
"It just didn't feel right to me,"Williams said.
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10/28124, 2:45 PM
HOA files: Otsego community hit with breathtaking roof repair bills •Minnesota Reformer
She only learned of the apparent hailstorm when she received a
notice in the mail from Gassen on Nov. 1.
"The July 13, 2023, wind/hailstorm damaged all buildings," the
letter read. Every roof in the community needed to be replaced at a
cost of �18,657.94 per resident, due two months from the day the
letter was issued.
Gassen took over management of Villas at Pheasant Ridge in April
2022, Williams said, and later that year suggested the HOA board
approve a new insurance policy.
The charge, the letter explained, represented the cost of the
association's �1,791,162.26 insurance deductible, divided evenly
among residents.
From Williams' second -floor deck, she can see some of the roof that
extends over the first floor of her townhome. The 12-year-old
shingles looked perfectly fine to her after the storms on July 13,
Williams said.
Williams' home insurance contained "loss assessment coverage," so
her insurance company covered the cost of the HOA assessment.
One resident, who has more than 20 years of experience running a
roofing company, checked on the status of his roof a few months
before the storm and saw no issues. When he learned about the
more than $18,000 assessment approved by the HOA board to
cover the roof replacement, he went up on the roof again.
"I was up there, I didn't see any damage, and I was just beside myself
that they were filing this insurance claim," said the resident, who
requested anonymity for fear of retaliation against himself and his
company.
The vinyl siding showed no signs of hail damage either, he added.
And he didn't hear about any hail in the immediate area from his
colleagues in the roofing industry. Hail did fall in some areas of
central Minnesota that day, according to w�at �e� r��ot�ts, but
Williams and other residents say their neighborhood wasn't hit.
Meeting minutes from an HOA board meeting on June 29, 2023
— weeks before the storm —states "Roofs were discussed at length in
terms of filing a claim and current status of our roofs:'
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HOA files: Otsego community hit with breathtaking roof repair bills •Minnesota Reformer
Adding to the confusion is a contract signed by Gassen
Construction &Maintenance and the then -board president of the
HOA in July 2023, authorizing the contractor to receive the
proceeds from the insurance payout for a loss dated July 13, 2023 —
the day of the storm.
But the former HOA board president signed the form on July 6,
seven days before the incident, according to a copy of the contract
obtained by the Reformer. The representative of Gassen
Construction &Maintenance, signed the form on July 24, after the
storm.
The former HOA board president who signed the contract declined
to comment.
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Madison McVan is a Report for America corps member who covers
economic mobility for Minnesota Reformer. She previously covered
agriculture for Investigate Midwest after graduating from the University of
Missouri in 2020 with degrees in Journalism and Latin American studies.
Minnesota Reformer is part of �t�z�s N�w�r�ro€��, the nation's largest
state -focused nonprofit news organization.
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