BOD stonewalls restrictions on raising monthly fees

Started by RobertG1 • 10 replies • 1547 views

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RobertG1 (Delaware)
Posts: 11

Posted:

The finance committee has recommended to the BOD that they change the delarations to provide a 10% cap on feesabove which they would have to go to the community for approval requireing a 67% vote. The management company has advised that this would not be a good idea, they claim to run 80 communitys and only four have fee restrictions. Does anyone have any thought about what is there agenda?

JulieS (Georgia)
Posts: 412

Posted:

We do not have a fee increase restriction. How old is your community? What is the status of your reserve account? How does the association stand financially? It is very hard to get the community involved in meetings let alone enough signatures to amend covenants or approve an increase of over 10% so I personally wouldn't advise it and it doesn't mean that there is something going on.

RobertG1 (Delaware)
Posts: 11

Posted:

We are a 5 year old communityour reserves are up to date we have approx $250,000 in contingency fund. we are in great shape. WE think having an open ended budget process is dangerious and we need to have member input to make the board responsible.

RonaldW (South Carolina)
Posts: 901

Posted:

Posted By RobertG1 on 01/30/2007 5:40 AM

The finance committee has recommended to the BOD that they change the delarations to provide a 10% cap on feesabove which they would have to go to the community for approval requireing a 67% vote. The management company has advised that this would not be a good idea, they claim to run 80 communitys and only four have fee restrictions. Does anyone have any thought about what is there agenda?

We have a 10% cap just as they are suggesting. I would be worried if the board of an HOA could arbitrarilly faise the assessments 50% or more without a membership vote.

We have a condo association in town that made the local news by doubling the assessment in one year. This was to pay for major maintenance (something that should have been accounted for all along). Some residents claim they will be forced to move. And of course when prospective buyers see the assessment amount, they may look elsewhere.

Ron
SC

BradP (Kansas)
Posts: 2,640

Posted:

We have a 20% cap. I agree with Ron, I think you are playing with fire anytime you give a board the power to raise assessments as much as they want.

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

RobertG1,

I do believe that a Board threshold of spending is appropriate. However, the BOD is privy to much more than the community is aware, and from time to time must do what is right for the elements of the community to protect property values.

How many dwellings are in your community, are the single-family or a mix of townhouses/condos? What is your annual budget, describe your community a little, what does the budget cover (detention basins, clubhouse, roadways, gated entrance/exit, landscaping, pool, tennis, etc.)? How do you arrive at the conclusion that your reserves at $250,000.00 are up to date? Meaning, did the HOA BOD have an independent Transition Engineer perform a capital reserve study and deficiency analysis?

GeraldT1
NNJ

RobertG1 (Delaware)
Posts: 11

Posted:

We are a comunity of 362 individual homes. Our budget fy2007 is $850,000 It covers lawn maintenance, snow removal, club house maintenance pool tennis courts. We have had one reserve study done and our reserve accounts are uptodate according to that study, we are in the midst of a more indepth study. We ahve excess cash amounting to $250,000 opur proposed threshold would be on operational and capital expenditures only not on reserves. Do you live in a community that has a threshold of spending?

RogerB (Colorado)
Posts: 5,067

Posted:

Robert, I do not think it is worth the effort for your HOA to TRY to amend the Declaration for just this item. I believe it would be better to amend the By-laws (much easier) to have a requirement that the members must ratify the Board approved annual budget, which includes the assessment. This provides the desired members' control. I have discussed the wording in previous posts.

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

RobertG1,

I live in a community with two associations, both of which have thresholds on capital improvements.

10% cap is $85,000.00. That would permit the BOD to spend $234.80 per household, or assess it per unit if not available?

That's a very generous cap/threshold.

GeraldT1
NNJ

BobM5 (California)
Posts: 34

Posted:

It would help on all posts, if the authors were to mention the state in which they are located. In California, the law caps annual increases at 20%. Anything above that must be approved by a 2/3 vote of all homeowners.

RobertG1 (Delaware)
Posts: 11

Posted:

I live in delaware

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