Text of December 12, 2011 Communique

Cloverleaf Center Condominium

P.O. Box 2346

Germantown, MD 20875-2346

Communiqué

Date:   December 12, 2011

From:   President, Board of Directors

To:       All Plex Unit Owners

Re:       Renovation Project Update

Dear Plex Unit Owners:

After much time and effort, the Board is delighted to announce that it has identified a reputable financial institution that is willing to provide our community with a commercial loan at a reasonable interest rate, closing cost, and method of repayment. 

As we have stated repeatedly, the Board has had difficulty in securing a loan, because of the high rate of assessment delinquencies in our community, and had previously received notices of rejection from eight banks.  The present opportunity may be our best chance to finally move the project forward.

A Brief Recap:  The Board contracted Structural Rehabilitation Group, LLC (Structura) for a comprehensive engineering study.  The study revealed that renovations will involve structural framing repairs/replacement, selective sheathing replacement, installation of weather-resistive barrier, new wall flashings, and flashings at improperly-lapped sheathing joints, removal and reinstallation of roof-to-wall flashing and ice/water shields, removal and replacement of wood trim with synthetic (PVC) trim, new roofs, and various deck repairs to make them fully compliant with County Code.

This project is thus large in scale and will take approximately 48 to 52 weeks to complete.  At the end, our community will have solid, code-compliant buildings without the water-leak problems that many Plex Unit owners have experienced.  It is expected that these renovations may increase the property value of the buildings as much as 18%.

After gathering all the necessary facts and extensively analyzing them from multiple angles, the Board, unfortunately, arrived at the conclusion that the prior Board’s estimate of $14,100 per unit is obsolete and will not be sufficient to cover the entire cost of the project, mainly due to the increased scope of work (including the roofing). 

To commence this project, the Board will amend Resolution 2010-1 of March 17, 2010 to reflect the following changes:

• The total amount of the loan will be $1.7 million to cover all aspects of the renovation.
• The monthly Special Assessment will remain at $235.
• The loan repayment term will be extended from 60 months to 108 months.
• The Special Assessment will cover the costs of the engineering study, the loan, loan interest and cost, unforeseen conditions, and the costs for renovation of Building 1, which is already completed except for the roof.
• Owners who purchased a Plex Unit through a regular home sale or a foreclosure, after the $14,100 collections originally began in October 2008, will also be responsible for their portion of the increased cost of the project.  Owners who are in this situation will be notified separately by our Property Management Company about how much the additional payment will be and when their monthly payments will begin.

Please note that the 98 Plex Unit owners will have thirty (30) calendar days from the date of this Communiqué to file a petition with the Board to call for a Special Meeting, in accordance with Article II, Section 6(b) of our Bylaws, to make a decision on the proposed amendment to the March 2010 Resolution.  Article II, Section 6(b) requires signatures from not less than fifty percent (50%) of the affected class of home owners (e.g., 49 Plex Unit owners) for the petition to be presented to the Board. Otherwise, the Board’s final vote on this amendment will be controlling.

Although no one can predict the future, the Board's position is that if our community does not move forward with the renovation project and seize this opportunity to secure the necessary loan now, its chance of obtaining another, reasonable one will diminish considerably (and the overall cost of the project will most likely be higher) in the future.  The Board asks that all Plex Unit owners give serious thought to this very important matter and come to a wise, well-informed decision that will provide the community with long-term benefits for everyone.