Private Community Possible Closing Amenities

Started by ShannonM1 • 4 replies • 1779 views

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ShannonM1 (Arizona)
Posts: 2

Posted:

I live in a private community that has amenities (pool and tennis courts) along with owning the roads. We are in need of road repair badly, but the association is very low on funds. They are trying to pass a special assessment to cover the cost of the roads.

I have been told that if the special assessment does not pass (most homeowners voting no), then the community will close the amenities to save money and sometime in the future to pay for new roads (will take at least 5 years).

My question is…I bought my house with all the amenities available and I rent it out. My renters look forward to the amenities. If I lose the amenities, I will lose the renters (or receive lower income, which I will lose money). What can I do? Is this legal?

I voted yes to pay for the roads.

JonD1
Posts: 2,350

Posted:

Shannon:

While I understand your position(I also own several rental properties) the HOA seems to be between a rock and a hard place.

They have put an assessment up for a vote of the property owners if it passes the cost to recap the road will be covered.

Now if that assessment does not pass then the Board has to makie decisions based on what work needs to be done the cost of that work and the funds available.

In these times when your property is low on funds not every cost might be covered.

Evidently the Board has determined the orad work is more important than the tennis courts or pool. That is their job to decide.

Is this legal? IMO that is the role and duty of the Board to live within their income in maintaining the property. If the pool is closed or tennis court shut down it is also their ammenities that THEY will not be able to use. Not just your renters.

Funny and frustrating how sometimes owners don't want to pay assessments or increased common charges but expect ALL ammenities to be maintained and the property to be repaired and improved up to their needs and standards but doin't pass ANY of that ocst on to them. In the real worl that does not work.

You voted to pay more to cover the road work. You can work to have others vote in the same manner so that the road work can be covered out of those funds rather than clsoing the pool. But majority rules and if the other owners wish not to pay more than the Board has a plan they might or might not like.

In hard times when money is tight difficult decisions need to bw made and not everyone will be happy in the end no matter what the outcome.

Good luck.

HeatherB4 (Florida)
Posts: 51

Posted:

Just a thought...

Our community is very simalar to yours with respect to private roads. My HOA took out a loan for the final lift that was installed about 3 months ago.

The community's devoloper went bankrupt before the roads got the final lift put down. Their was a bond taken out before the builder started the community, but the bond was released during the bankrupcy. Our HOA was stuck with this massive bill.

They had three choices...

1. speical assesment, which would cost each HO about $1000. Most people did not want to do that and 35% of the community is in default with dues... We would never get the money, it would take years.

2. not do the roads... which it looked bad and it had to be done for safety reasons.

3. Loan... per our bylaws, they did not have to get a vote from the HO. (kinda confusing, which I didnt agree with the way they did it... but that is for a different post) BUT the loan covered the cost of the paving, it was spread out over 5 years, and it reflected on the yearly budget, and we saw an increase of only $15 per month, which is really not that bad.

If you are not a BOD member, you might want to suggest the idea to your BOD as another way to go. Also, since you are being very proactive and concerned, ask the BOD if you could head up a committee to look into this. It will take some pressure off of them.

CarolP5 (North Carolina)
Posts: 17

Posted:

Shannon,
A few thoughts for your consideration:

(1) I understand that your private community owns the roads, however, verify with your town government that they are not responsible for at least some of the road repairs. The are easements such as water, electric, sewer easements etc. that a town is responsible for maintaining and repairing.

(2) The board of directors has a fiduciary responsibility to protect the association from financial hardship. Here is a link to a great article. http://realtytimes.com/rtpages/20050323_hoareserves.htm
It's seems the HOA did not plan very well with their budgeting practices for the long term care & maintenance of common elements of the neighborhood.

(3) Request a special meeting by called by the Board of Directors for all homeowners to attend to fully discuss the need for road repairs and impact to the property owners if not completed.

(4) If #3 doesn't happen, pull together a group of concerned homeowners. Have a meeting to discuss, brainstorm option, and formulate a plan of action. Select one or two members to represent the group and ask to be included on the agenda of the next Board meeting.

In this economy homeowners associations need to be on their toes when it comes to maintaining property values for all homeowners and marketing their neighborhoods. I personally feel closing amenities will be more of a detriment to your community.

DanielH1 (California)
Posts: 482

Posted:

Usually, the HOA documents require the Board to keep and maintain amenities. So, you are entitled to the amenities.

However, if the owners refuse to vote to provide the money, the Board may not be live up to all the parts of the HOA documents. They may have to choose what to do. It's a civil matter so you can't have them thrown in jail.

Your options aren't good.

If the special assessment passes, then the amenities would hopefully remain available. So, you might work hard to lobby your neighbors to pass the special assessment.

If the special assessment fails, you could lobby the Board to pass an emergency assessment by a Board vote. Poor roads is an emergency. An emergency assessment does not require the Board to slash-and-burn the rest of the budget so, despite the fact that the Board could avoid the emergency with other measures, they don't have to. If you have some pull with the Board and they want to do it, this might work.

You could also sue. This would raise the costs of the HOA and earn you the undying hatred of the other owners but a judge could force the Board to live up to all the documents by forcing a special assessment on your HOA.

Are you willing to vote for and pay your fair share of the special assessment?

I ask because some people get mad about losing the amenities but also get mad about paying for them.

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