HOA to enforce mandatory fees to subsidize for-profit business

Started by EdB6 • 3 replies • 1511 views

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EdB6 (North Carolina)
Posts: 2

Posted:

Our HOA, which is currently ran by new developers of the neighborhood, are in the process of changing the covenants to require new home buyers to pay mandatory fees for access to a pool facility owned by a separate for-profit business. Those of us who already own homes in the community will be given the option to opt into the agreement, but like the new home buyers we will have no ownership or say in the for-profit business and will be required to pay this fee indefinitely. Is this legal? The pool facility does allow members who live outside of our community to join, but these people will not be bound by the neigborhood HOA rules. A few of us in the community are tring to figure out what recourse, if any, we can take should this covenant be made. Can anyone provide any information?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

This is fairly typical. I have seen mandatory charges of $40.00 per month to be a member of the swim, tennis, etc. (use them or not) that were facilities not owned by the owners.

One HOA I lived it in, each homeowner had to be a social member of the golf club and had a $100.00 per month spending minimum in the clubhouse. I was a golfer member so it did not matter to me. The same club assessed all members. It went to court. The court ruled that the Covenants were clear. All owners had to be a memmber of the club and all had agreed to such when they purchased their home.

In your case, some will like access to the pool and gladly pay for such. Others will not. There are choices. You do not have to join. Newer buyers can say no thanks and not buy there.

PaulT6 (California)
Posts: 409

Posted:

Ed,

If I am reading your post correctly it appears you have a choice. In our Assn we have many amenities, some of which are open to the public.

http://www.tahoedonner.com/

All run at a loss. In addition to subsidizing them we are charged a user fee each time we use them. We only use the Marina. Some people don't use any of the amenities. As John said, you have a choice and that buying into a HOA is voluntary.

Paul T

LarryB13 (Arizona)
Posts: 4,099

Posted:

Ed,

You might want to take a look at Dreamland Villa Community Club v. Raimey at http://azcourts.gov/Portals/0/OpinionFiles/Div1/2010/1%20CA-CV%2008-0388.PDF.

This was an Arizona Court of Appeals opinion where the facts were similar to yours. Buyers in later units of the development were required by CC&R's to pay dues in the community club; buyers in older units had no such requirement. Later, the association approved an amendment to the CC&R's to require all owners to pay for club membership regardless of when they purchased.

The Court held that CC&R's cannot be amended in such a way as to burden property owners with new and unforeseen expenses. In this opinion, the court cited a series of cases from other states in what they called the Lakeland line of cases, which included cases from Illinois, Nevada, Nebraska, and Washington. The court pointed out, however, that this viewpoint had been rejected by the courts in Colorado.

My suggestion would be to discuss this with an attorney before you find yourselves burdened with dues for a swim club you never intended to join.

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