By David Schuman

This story was originally posted on Monday, Feb. 1

MINNEAPOLIS (WCCO) — A group of neighbors in Eden Prairie are afraid of losing their homes to exorbitant association fees.

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The homeowner’s association for the Hennepin Village Community assessed every resident somewhere from $9,000 to $14,000 for roof damage repairs after a hailstorm in August.

Some homeowners have to pay most or all of the fee out of pocket. If they don’t, they face liens and even foreclosure. They feel management got an overpriced assessment.

(credit: CBS)

Venkat Manikonda says he owes $9,400 out of pocket.

“They don’t want to share anything to the homeowners [about] which homes are damaged or who did the inspection,” Manikonda said.

The property management firm says it’s the residents’ own fault if they don’t have the proper insurance to cover this charge. There is a payment plan option spread out through most of the year.

Here is the firm’s full statement:

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As you might expect to be the case, issues involving homeowners associations can be complex. This situation is no different.

As you may recall, a significant hail storm hit the Twin Cities in August. Eden Prairie (where Hennepin Village is located) was particularly hard-hit.

Homes in Hennepin Village suffered damage of varying degrees. The homeowners association had the roofs inspected by an independent insurance adjuster to determine the extent of the damage. The adjuster confirmed damage and calculated the cost to repair the damage using nationally-recognized software.

Minnesota has suffered many storms over the last several years. As a result, several insurers that used to write coverage for condominium and townhome communities have left this marketplace. Those that have remained have made adjustments to coverage and, in particular, how deductibles for losses resulting from wind and hail storms are calculated. Rather than a flat dollar amount, the deductible is a percentage of each building’s value. When a claim is made, a portion of that deductible is then allocated to each home in the association.

The charge you refer to is what is commonly referred to as a “loss assessment”—the portion of the deductible under the homeowner’s association’s insurance policy allocated to each home. Homeowners who have maintained proper insurance coverage have coverage for a loss assessment. Some homeowners in the Hennepin Village community apparently did not maintain appropriate coverage, and are thus protesting the loss assessment.

The Hennepin Village association has provided multiple written communications to homeowners about the association’s insurance and the storm damage, and has scheduled videoconferences to allow owners to ask questions about the process, the damage, and the repairs.

As of now, approximately 75% of owners in each community within Hennepin Village have already paid the assessment. It is unfortunate that a vocal minority feel it is necessary to continue to protest the properly-levied assessment.

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Finally, both Minnesota law (Minnesota Statutes Chapter 515B, Section 515B.3-116) and each association’s declaration of covenants state that the homeowners association has a lien on any home for any assessment levied against that unit.

David Schuman