Division of lots - how to assess?

Started by ValerieS2 • 8 replies • 1641 views

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ValerieS2 (Michigan)
Posts: 244

Posted:

How would a lot be assessed (or not) in this scenario:

Mr X on lot #1 and Mr. Y on lot #3 have decided to jointly purchase lot #2 between their homes. Shortly after the purchase, the lawyers will file paperwork to add the new divided land to the legal description of the original home sites and lot #2 will cease to exist.

On the surface it appears the association would lose the assessment for lot #2. Anyone have any insight?

TimB4 (Tennessee)
Posts: 21,061

Posted:

Each lot is allowed one vote and assessed equally.

For lot 2, assess 1/2 to Mr. X and 1/2 to Mr. Y

For voting purposes, Your documents probably say that they have to decide amongst themselves who gets to register the vote for lot 2. In other words, one lot, one ballot, the owners decide how to cast the vote.

It doesn't matter that the property will be legally incorporated into their own lot or not as far as the Association is concerned.

Tim

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

They should split the lot#2 dues equally. Its likely our current dues price structure is setup for "x" number of lots times "x" numbers of dues equals $dues. Just think if one lot owner bought 20 extra lots but only wanted to pay dues for one lot, that would mess up your expenses for common area expenses.

So these two owners should need to pay a 1/2 share of dues, plus their own dues.

GlenL (Ohio)
Posts: 5,491

Posted:

With all due respect to my learned colleagues, if the county allows the subdivision of the middle lot you would have IMHO two lots and while bigger than the normal lot, if the CC&R's state that all assessments are equal; then you cannot charge a higher fee. Also the votes for the middle lot would disappear and neither lot would have any extra votes.

That is if your CC&R's either allow or are silent on the matter of subdividing lots, if they expressly forbid it, it cannot be done. If they spell out a procedure that must be followed to do it, then it must be done that way. I would consult the HOA attorney on this, before it is done; it might be better for one of the families to buy the lot and lease half of it to the other family.

Studies show that 5 out of 4 people have problems with fractions

SusanW1 (Michigan)
Posts: 5,202

Posted:

You will have to look in your CCRs and see the definition of "lot" -if your HOA was originally platted out as 40 ft. lots, and now owners are buying and splitting, there could potentially be a real problem for the HOA's financial future.

I agree with Steve: each lot owner now would owe 1.5 times the dues amount.

ValerieS2 (Michigan)
Posts: 244

Posted:

Thanks for the input guys. If the lot "ceases to exist" I don't know how we can possibly assess dues on it. I will comb through our documents again and try to elicit some more advice.

TimB4 (Tennessee)
Posts: 21,061

Posted:

The lot won't cease to exist as far as the Association is concerned.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Do your documents speak about a Member being a "lot owner"?

The original deed or plat will tell you what the "lot" means.

Are the current dues based on the "lot"?

If someone owns 1 and 1/2 lots, then they are assessed at a 1.5 rate.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By ValerieS2 on 05/05/2011 5:11 AM
Thanks for the input guys. If the lot "ceases to exist" I don't know how we can possibly assess dues on it. I will comb through our documents again and try to elicit some more advice.

Hi Valerie:

I agree with Tim and Susan. Your documents should state something to the effect of the association consists of X number of lots as noted in the declaration and on the final plat filed with the county records. Even if someone purchased two lots and combined, they would still be liable for association fees for both lots based on the governing documents. In this case the individuals would in essence be jointly responsible for the lot they split and each pay ½ the assessment for the lot.

Again, check your governing documents carefully.

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