HOA Lawsuit

Hello-
Wondered if anyone has any insight into this matter.

Our HOA is 20 years old. We had a voluntary membership from 1986-1996, but found it feasible to pursue Permament Membership status, and passed a Declaration of Permanent Membership in 1996. People could choose to become permanent members, whereby they would pay annual dues for use and upkeep of the common area and HOA facilities (including pool and tennis courts). The permanent membership would become part of their property deed. Those who chose not to consent could not use the neighborhood facilities.

In 2005 our HOA tried (but ultimately failed) to pass new covenants after our old ones expired. At that time one member began to do research on our 1996 Declaration of Permanent Membership. He found we only had 99 consent forms signed by the given date required on the Declaration itself, when we needed 100 consent forms in order for the Declaration to be valid. No one knew we were short one consent form until 2005 - NINE years after our HOA Permanent Membership had been in place. With that knowledge, another member attempted to get out of permanent membership, but the HOA attorney advised the board NO WAY, so the person dropped it.

Back to 1996. Apparently our HOA pres at the time must not have counted the consents correctly. He signed the affidavit as though all was in order. He claims he thought we had 103 consent forms signed by the due date - we actually had 104 RECORDED about six weeks later. (We now have 125 permanent members out of 158 homeowners.)

Flash forward to 2006. We recently drafted and passed new covenants. Since the passage, one member sent a threatening letter to the board wanting out of permanent membership; noting among other things, the 99 vs. 100 issue of our 1996 Declaration. Our attorney is drafting a letter to them as they're threatening to take this to court if they are not let out of permanent membership.

Sorry for the lengthy flash back and forward post. If I haven't made you dizzy or put you to sleep and you have some insight or viewpoint, would love to hear it!

Shelley

Roger-
Thank you for taking the time to respond.

The 2006 covenants we just passed were an amendment to our 1996 Declaration. Our HOA attorney is quite experienced in HOAs; they are his specialty. In addition, he writes for our statewide HOA magazine regularly and has numerous published, related articles in law journals. He believes we would have a strong case if this went to court, based on "promissory estoppel," and various case decisions related to promissory estoppel, covenants, and HOAs, that have ruled in favor of the HOAs. (Have read many of them.)

Nothing is certain however; and I'm trying to see this from as many angles as possible. Your response is one I'd not heard yet (of just the 2006 amended covenants possibly being valid - not the 96 Declaration), so I appreciate it!

Shelley

Paul-
I appreciate your response. Our recent covenants that passed had to do so by 2/3 of the permanent membership - 82 votes. We received 95 votes -76% of the permanent membership. I agree that ALL of our homeowners should have to contribute to the upkeep of the commons area and amenities whether they use them or not. Unfortunately, there is no provision for non-permanent member "forced" dues in our bylaws. We have 3 categories of members, as/per our bylaws.

1.) Permanent members - who pay annual dues as long as they own their home. The permanent membership is attached to their deed.
2.) Associate members - who pay a voluntary fee as a contribution to upkeep of the commons area but are not allowed to vote.
3.) Non-permanent members - who pay 150% of the annual dues that permanent members pay to use the amenities. Non permanent members can opt out at any time. Don't know about their voting status.

As you probably know, it is an enormous undertaking to get ANY covenants passed once they need to be renewed, altered, or amended. I'm already burned out from being on our covenants committee last year - and I'm only in my third month as a board member! (I tried to resign last month, but was talked out of it.)And I signed up for TWO years!
(BIG SIGH.) It's the legal stuff that takes up so much time and energy.

Yes I would expect that others would want to opt out of permanent membership if this current member is allowed out. And yes it would cause major hardship to our association if the permanent membership was overturned. It's difficult enough as it is maintaining and improving a 20 year old neighborhood when only 2/3 members pay dues - and only $375 at that!

Will keep you posted on how this legal challenge goes.

Shelley