HOA buying golf course

Too many issues at once. I will address one.

Yes, look at the CCRs and Bylaws that came with your house. See about expenditures and what percentage needs to vote to do a purchase like this. Its likely 100% of all owners for something like this. If you dont like the answer, start looking at state laws regarding HOAs.

Hi Ron:

I would highly recommend that your association hire a separate attorney who deals with contract law before purchasing a golf course from the developer. Make sure that the developer is not potentially attempting to pull the wool over your heads, which you may not be aware of ahead of time.

Here is a link on this website regarding a similar situation and which the homeowners did not potentially take precautions ahead of time in hiring their own attorney to insure their rights were fully protected:

http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/113092/view/topic/Default.aspx

Keep in mind the developer will potentially be looking to line their pocket with possibly other methods not just in selling the property, while the HOA is taking care of the expenses. Tread carefully ...

Ron - You should read FL Statute 720.31. This legislation was passed in July of 2010. I'm including the part that applies to an established HOA (not under declarant control),which it sounds like you are.

2. To a homeowners' association that is in existence on the effective date of this act, or to an association, no matter when created, if the association is created in a community that is included in an effective development-of-regional-impact development order as of the effective date of this act, together with any approved modifications thereto.

(6) An association may enter into agreements to acquire leaseholds, memberships, and other possessory or use interests in lands or facilities, including, but not limited to, country clubs, golf courses, marinas, submerged land, parking areas, conservation areas, and other recreational facilities. An association may enter into such agreements regardless of whether the lands or facilities are contiguous to the lands of the community or whether such lands or facilities are intended to provide enjoyment, recreation, or other use or benefit to the owners. All leaseholds, memberships, and other possessory or use interests existing or created at the time of recording the declaration must be stated and fully described in the declaration. Subsequent to recording the declaration, agreements acquiring leaseholds, memberships, or other possessory or use interests not entered into within 12 months after recording the declaration may be entered into only if authorized by the declaration as a material alteration or substantial addition to the common areas or association property. If the declaration is silent, any such transaction requires the approval of 75 percent of the total voting interests of the association. The declaration may provide that the rental, membership fees, operations, replacements, or other expenses are common expenses; impose covenants and restrictions concerning their use; and contain other provisions not inconsistent with this subsection. An association exercising its rights under this subsection may join with other associations that are part of the same development or with a master association responsible for the enforcement of shared covenants, conditions, and restrictions in carrying out the intent of this subsection. This subsection is intended to clarify law in existence before July 1, 2010.

My question is your HOA a FOR-Profit corporation or a Non-Profit corporation? This may be a subject your HOA should discuss with the owners. Most HOA's are non-profit which means they must spend as much money coming in as they do out. A FOR-Profit can make a profit from their proceeds and share it amongst the owners. Both can purchase property IF it is in their CC&R's to do so. However, the purchase reasons may be different.

It's important to know what kind of HOA you are in to know if this is a wise move or not. The repair issue does make sense and the special assessment is needed. However, I think the HOA should keep separate the special assessment for the sewer repair and the purchase of the golf property. This way the owner's can vote for the one but NOT the other.

A bunch of investors could combine and buy the course, but there would be no guarantee that the HOa would have any benefits or even access to it. That would be a privately owned course then.

The HOA could own this course as a non profit. Consider it just as you would running a clubhouse or pool.

But my question is : ORIGINALLY when you bought, was the course listed as one of the amenities that you could enjoy or is it mentioned in the CCRs?

You may also want to research whether the purchase of the golf course would substantially change the HOA as originally presented in the declaration. See http://www.foley.com/publications/pub_detail.aspx?pubid=5922 that cites court cases where mandatory memberships or forcing HOA members to pay for something that substantially changes the essence of the HOA are not valid. Individuals can still refuse to pay even if 99% approve, if I understand the legal principles involved. If you contract to buy something and the seller substantially changes what was offered in the contract then you are not obligated to buy - or something like that.

We have a similar issue in our HOA where the golf course (CC) was explicitly excluded in the disclosure book and declaration yet they still went ahead and purchased the golf country club. Once there is a method to communicate to among our members some may want to opt out of the mandatory equity CC membership.

Bob