It was a no-brainer for a homebuyer nearly half a century ago in a little-known area of Phoenix called Ahwatukee.

Back then, a small enclave of homes off 48th Street had been organized into a homeowners association with the not very appealing name of RT-2 but a very appealing feature built right into its covenants, conditions, and restrictions.

Buy a home in the area of Potomac Street, Ahwatukee Drive, a stretch of 48th Street, or Half Moon and Chippewa drives between Warner and Elliot roads and you won’t ever worry about painting the exterior or replacing the roof, the CC&Rs guaranteed, because the HOA has your back.

But modern reality has just about crushed that guarantee, creating a nightmare that threatens the owners of the 124 single-family homes in RT-2 as well as the HOA board.

And soon – possibly this Saturday – the owners must make a choice:

Agree to a hefty spike of at least 20% in their dues or vote to change the CC&Rs and take on the cost of replacing their own roofs.

And if they reject both options, they risk seeing their HOA slide into bankruptcy, which could prompt the state Land Department to step in and take over its affairs.

The homeowners’ Hobson’s Choice has kept HOA board member Tom Hemmingway awake at night.

“We have one of the few HOAs left in the world that’s responsible for doing roofs – which is unheard of today,” the self-employed architect said.

The guarantee was incorporated into CC&Rs crafted by Presley Development Co., which for all intents and purposes founded Ahwatukee.

“It was a marketing tool geared toward retirees: ‘We’re going to take care of the whole painting of your house and your roofs. You just pay your dues and we’ll take care of that for you,’” Hemmingway explained.

“Well, it’s 40 years down the road and now there really isn’t enough money in those reserves to commit to doing that repair work,” he said. “So, it’s kind of problematic.”

The vast majority of homeowners in RT-2 live on fixed incomes and actually pay three sets of dues that add up to $3,995 a year.

Besides the RT-2 dues of $250 a month, there also is a tab they pay to two other homeowners associations of which their community is part of: the mammoth Ahwatukee Board of Management, which has some 5,200 houses within its sprawling boundary, and the Ahwatukee Recreation Center.

The houses are topped by one of two kinds of roofs, mansard or sloped. And while they are all tile, the membrane beneath the tile wears out over time – at most 20 years, Hemmingway estimates.

The mansard roofs’ membranes were replaced in 2015 and to cover that project, the previous HOA board took out a $560,000 loan.

“It took a year to consummate that loan,” said Hemmingway, who ran for election to the board a few years later.

“It was in the minutes of every meeting,” he said, adding the old board’s attorney had advised that as a financial entity, the HOA had a legal right to borrow money to meet their obligation to replace the roofs – as long as it could repay the money.

“Now one of the homeowners did ask, ‘Well, if, God forbid, what if you can’t make a loan payment?’” he recalled reading in past board minutes.

“You know the answer? The answer is the bank’s gonna come after all the homeowners because that’s the collateral. So they took out the loan.”

The old board had sought three bids for the previous roof replacement project and the $560,000 cost was the cheapest.

With repaying that loan at roughly $5,000 a month, the HOA also sees its annual budget of about $350,000 stretched in other ways.

It is responsible for painting the homes’ exteriors and does that in five cycles with 25 or so homes repainted in each cycle.

“We’ve painted 50 of the 124 homes,” he said. “And that’s where our reserve money is going. But while we’re using that money every year to take care of painting, there’s not enough money for other things that aren’t in our operating budget. There’s no money for roofs– or the next paint cycle for that matter.”

The board has now extended the paint cycle from five years to 10 years, he said.

RT-2 pays for watering the homeowners’ front lawns. Indeed, it spent $90,000 over the last two years to upgrade the community’s irrigation system because the City of Phoenix has been making noise about going after homeowners associations that waste water.

The board also faces the need to replace parts the concrete wall that separates some homeowners’ properties from the ARC golf course. The wall is wearing down because of a combination of the course’s watering and sun exposure, but the owner has refused to discuss sharing the wall repair costs, Hemmingway said.

RT-2 also pays for landscaping

properties’ front yards.

“The board has been generous in the past” with that, Hemmingway said.

“If someone requested a tree replacement, or a plant replacement, typically we’ve done it. Now our property management company said we shouldn’t be doing that. That’s a capital expense, that tree belongs to the homeowner.

“And that’s something that we never never thought about,” he continued. “The latest property managers said, ‘oh by the way, those are capital expenditures – that tree, that bush, sidewalk belongs to the homeowner. If a tree dies, we’re sorry your tree died but you have to replace it.’

“Well the board hasn’t taken that attitude in the past,” Hemmingway explained, “because the homeowner says, ‘Well, the tree died because you didn’t give it enough water.’ We’re there to help the homeowners so historically we’ve gone in, cut the tree down and replaced it.”

That policy already has changed, he added, “because there’s not enough money” – which has led to some angry homeowners grumbling, “Why me? Why am I getting screwed?”

Hemmingway said the board has been advised by a third-party consultant that studied its reserves and future needs that right now the HOA is facing a $90,000 deficit “for what we need to move forward” on projects like the next repainting cycle alone.

So while the state allows any HOA board to raise its dues by a maximum 10% in any given year without a homeowners’ vote, RT-2 owners face even higher payments.

“Some years, it’s been 2%, 3%. Last year it was 10%,” he explained. “And now with the deficits we’re facing, it’s going to be 10% ad infinitum.”

Actually, he added, their reserve advisor has told the board “we need a 20% increase today.”

That would be considered a special assessment and that could be followed by a 20% increase in their annual dues in the following year – and likely every year for the foreseeable future.

“So that’s a wake-up call to the community,” he said. “We need $80,000 in the bank as soon as we can get it in the bank and that translates into a 20% dues increase that the board is prepared to bring to a vote.”

“Now that takes a special meeting. It takes a vote to do so we’ve got to convince people that’s the right thing to do.”

There is, of course, the other option, he added: Take free roofs out of the CC&Rs, a legally binding document on any HOA and the people who live in it.

Hemmingway said the board posed the choice in a survey of homeowners last year that “literally put everything out there – the roofs, your landscaping, your front lawn.”

Basically the survey asked: “Would you be willing to take these areas to help defray future costs and possibly dialing dues back?”

Of the 61 responses to the survey, he said, “almost every item was a dead tie, so there was no inclination toward any of this.”

Some homeowners have asked the board what they can expect in return if they take on some or all of these expenses now guaranteed in the CC&Rs. Theywant to know what the HOA will save them in dues, for example.

“Well, we don’t know,” Hemmingway said.

“Because we’ve got to pay off the loan. We still have these other expenses. We can pretty much assure you that the fees aren’t going to go up astronomically every year, but we can’t tell how much we can dial those dues back.

“That doesn’t sit well with a lot of people,” he continued. “They say, ‘I need to know numbers. I need to know exactly what you’re telling me because we have fixed incomes.’”

To some degree, Hemmingway is surprised that no homeowners appear to be thinking about the fact that everyone pays the same cost for replacing a roof that may be a different size from their own.

“It’s individualism versus community,” he explained, noting that some roofs are much larger than others and “we might be at the juncture where it’s time for individuals to take on individual responsibilities.”

Hemmingway said homeowners could decide now to resolve the matter because “it’s not a crisis yet.”

But he fears not enough of them will do it, waiting for “the gun to their head” – when water starts coming through their roofs.