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Restrictive covenants do not require mandatory dues but Association made dues mandatory

Started by GlennY16 replies • 2411 views

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GlennY (Alabama)
Posts: 2
Posted:
Our restrictive covenants (RC) do not require mandatory dues from the residents. The RC only requires the residential assocation (RA) to appoint the Architectural Control Committee ACC. The RA has ammended their bylaws and made dues mandatory for all residents. Can the RA enforce this requirement if it is not mentioned in the RC?
RogerB (Colorado)
Posts: 5,067
Posted:
Quote:
Posted By GlennY on 08/16/2010 2:12 PM
Our restrictive covenants (RC) do not require mandatory dues from the residents. The RC only requires the residential assocation (RA) to appoint the Architectural Control Committee ACC. The RA has ammended their bylaws and made dues mandatory for all residents. Can the RA enforce this requirement if it is not mentioned in the RC?

No. It would require amending the RC and that would require approval of the required percentage (e.g. 67%) of all owners.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Glenn,

Actually to change from a voluntary to a mandatory HOA may require a 100% vote of all property owners. If there is no case law in AL for this issue, it may require going to court to fight this change. But, at any rate, the change cannot be made by just amending the bylaws especially if that can be undertaken w/o a vote of the members. The proper document to amend would be the CCRs not the bylaws.

BTW, exactly what do the amended bylaws say regarding dues? Are dues required to be paid by all property owners or just by members of the HOA? There could be a big difference. If the HOA was voluntary then every property owner may not have been a member of the HOA.
TimB4 (Tennessee)
Posts: 21,047
Posted:
Mary and Roger,

I reading this differently, I believe that the issue isn't is the association mandatory but are they allowed to start charging assessments.

Glenn,

This will depend on the wording of your governing documents, as they all work together. Typically when there is a conflict the covenants control.

Therefore, what is the language in the covenants that addresses the assessments?

Does it specifically forbid it?

Does Mary have and Roger have it right in that you are actually discussing a mandatory membership in the Association?

Tim

SteveM9 (Massachusetts)
Posts: 3,699
Posted:
What possible expenses could a Architectural Control Committee have that they would need to charge dues?
GlennY (Alabama)
Posts: 2
Posted:
here is a little more history. The Retrictive Convenants(RC) basically states - the ACC is to be a five member board appointed by the XYZ Residential Association (RA). It gives no more authority to the RA.

With membership of the RA decreasing, the RA president decided to change the RA bylaws from voluntary membership to mandatory membership during a meeting. There may have been 15 voting members present (note there are a total of lots 65 residential lots). Dues are $100. Here is his basic view speaking for the RA, I changed the names so not to mention the actual neighborhood:

-the Articles of Incorporation (on file in the Probate office) states that association membership will consist of the property owners in XYZ neighborhood. The Articles indicate that the By laws will provide the administrative guidelines for association and the By laws can be amended by a 2/3s vote at a scheduled meeting. The initial By-laws indicated that dues would be voluntary and membership would consist of those who pay dues. Our current By-laws indicate that all property owners are association members (this provision is now consistent with the Articles) and that dues are mandatory. The amount will be established annually by the Board. We followed the provisions in the initial By-laws, made the required announcement, discussed the issue at an annual meeting, voted, and amended the By-laws.-

So he is just changing the RA bylaws and not even considering how the RC apply. Now he is mailing letters to all residents demanding mandatory payment of dues.

SteveM9 (Massachusetts)
Posts: 3,699
Posted:
Quote:
I reading this differently, I believe that the issue isn't is the association mandatory but are they allowed to start charging assessments


I get is now. The RA as you call it (most of us call it a home owners association HOA) is on your deed and therefore mandatory. They have never charged dues, but now they want to start. You may need advice of a lawyer, sometimes an association can start charging dues, sometimes they cant. A judge usually decides. Because you "are" in the association, its on your deed, it doesn't look good. I think the best you can do is get all the homeowners together, and run for office and vote for no dues. If you control the officers positions, your success will be greater.

PS. The details of the Architectural Control Committee ACC doesnt really mean anything, its just an arm of the association (RA).
TimB4 (Tennessee)
Posts: 21,047
Posted:
Quote:
Posted By SteveM9 on 08/16/2010 4:19 PM
What possible expenses could a Architectural Control Committee have that they would need to charge dues?

Postage, office supplies, printer ink, copies, etc.
SureshD
Posts: 268
Posted:
No dues(necessarily)required... just have an application fee to cover expenses.
SusanW1 (Michigan)
Posts: 5,202
Posted:
Do you have common areas that need to be cared for (maintained?)
SusanW1 (Michigan)
Posts: 5,202
Posted:
If the CCRs go with the deeds and have established committees, then the bylaws would flesh out HOW all this could be done, including establishing funding to carry out the mission of the corporation. That would include a source of funding, i.e. membership dues.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Glenn,

You stated that the Restictive Covenants say the HOA does not require mandatory dues and that the Bylaws state that dues are voluntary and membership consists of only those who pay dues. This is definitely a voluntary HOA. You also state that the Articles of Inc state the bylaws can only be amended by a 2/3 vote of the members. Therefore, the Pres has no authority to amend the bylaws to state that the HOA is now mandatory.

If there is no case law in your state, this matter may have to be settled in a court of law. There have been court cases in some states and from what I recall they all have required a 100% vote of the members to change from voluntary to mandatory.

Bottom line: I believe your Pres outstepped his bounds by amending the bylaws. Also I think an HOA attorney should be consulted for guidance and a legal opinion on what the vote % is to change from a voluntary to mandatory assn.
TimB4 (Tennessee)
Posts: 21,047
Posted:
Mary,

Glenn actually said that per the Articles of Declaration membership consists of owners in a specific neighborhood. This tells me that Association membership is mandatory.

Glenn also says that the bylaws provided for assessments to be paid on a voluntary basis and that the membership then amended the bylaws to make any assessments mandatory.

Based on this understanding, as long as the bylaws were properly amended (notice given, quorum present, percent of ballots said yea), then the process was done legally.

Now as I understand the thread, Glenn is also saying that since the Covenants control and the covenants do not require assessments to be mandatory.

Glenn -

Very Important - What is the language in the Covenants that talks about assessments (please post that section).

If the Covenants specifically say that the assessments are voluntary, then there is a conflict and the Covenants would control (that is over rule the bylaws).

However, if the Covenants don't specifically address assessments or has language that allows assessments but fails to address if they are mandatory or voluntary, then there is no conflict and the bylaws would control.

I, and others, have not seen the actual documents. My opinion is based on the information contained in your posting as you interpret your documents. If the documents were made available or if the language within those documents were posted, opinions and advise given may change. With any legal document it tends to boil down to what is actually written and how it is written.

Tim
MaryA1 (Arizona)
Posts: 7,043
Posted:
Tim,

The fact that the declaration states that membership consists of owners in a specific neighborhood doesn't necessarily mean that membership is mandatory. That only outlines the boundaries of the HOA. Usually if the declaration states every property owner is an automatic member of the assn that is what defines a mandatory assn.

What Glenn actually said about the bylaws amendment is that the Pres amended then turned around and said the members voted. So we really don't know how the amendment was made. But either way, if 100% of the members did not vote "yes" to converting to a mandatory assn the amendment may not be legal. That's why I suggested consulting with an attorney. We don't know what the case law is in his state, or even if there is any. I really think that issue will have to be decided in a court of law.

I agree, it would be great if Glenn could post directly from the articles, covenants and/or bylaws and also let us know who voted on the bylaws amendment to change to a mandatory assn.
SusanW1 (Michigan)
Posts: 5,202
Posted:
Why would the original bylaws say that membership support is voluntary?

If there are common areas, then SOMEONE has to maintain them - and that takes funding.

There would be a flaw in the bylaws if there was no way to carry out the mandate of the CCRS.

Kind of like unfunded mandates, dontcha think?

I'd like to ask what the PURPOSE statement is in the bylaws. Most bylaws have a listing of their function and their duties.

TimB4 (Tennessee)
Posts: 21,047
Posted:
Mary,

You are right. I went back and re-read the thread. To say the lease it is confusing as at one time the issue is mandatory assessments and in another post it's mandatory membership.

Sadly we are only offering advise based on a lack of knowledge of what the actual documents say and everyone here knows that by inserting the word may in place of shall can change the entire document.

Glenn if you can provide a link or attach or just type in that section of the documents you will get much better and more accurate advise.

Tim
MaryA1 (Arizona)
Posts: 7,043
Posted:
Susan,

IMO, there is no reason why a voluntary assn cannot own common areas which must be maintained. Although this is usually the reason why a mandatory HOA is formed. Although this is not the case here, I'm sure there are some voluntary assns that were once mandatory and own common areas.

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