HOA Forgave Assessments

Started by SherryS2 • 24 replies • 1646 views

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SherryS2 (Washington)
Posts: 47

Posted:

Hi All,

My husband just went to our county courthouse and looked up a small claims case involving a neighbor. The neighbor was sued for $1500. The latest financial report indicates the neighbor paid only $325.

Thru neighborhood discussion we found out that this person was forgiven the remainder of the assessments owed. I cannot verify that but it would seem to be correct. I know if I ask the BOD about it, they will tell me it is a private matter and cannot be discussed with me.

We were only 3 months in arrears and the association filed a small claims suit against us. This person was over 4 years in arrears then they forgave them the majority of what was owed.

I have expressed serious concerns about the management of the association. I think they are retaliating against us for expressing our opinions.

I think this could be a case for breach of contract. Any thoughts on that? - Sherry

TimB4 (Tennessee)
Posts: 21,059

Posted:

Sherry,

If, as the Board says, the company providing water/sewer services, is not an Association but only a corporation providing a service, then they would have their own rules.

If, as you have stated in other threads, that the covenants have expired, then the board may be allowed to waive assessments as the covenants preventing that no longer exist.

As I've discussed in your other threads on the topic, have you taken my advice and consulted with an attorney? If you have, I would urge you to follow their advice. If you have and you care to share, I would like to hear what the advice was so I can learn as well.

SherryS2 (Washington)
Posts: 47

Posted:

We consulted two attorneys. One said he would need to look at our abstract but was fairly certain that the covenants had expired. Since covenants are a contract between the property owner and the association, and the contract was no longer in force (because of expiration of covenants)the association would have to offer sewer services at a reasonable fee.

The other attorney said he didn't believe the association could charge anything but he wasn't sure.

The association continues to refer to themselves as an "association" and are constantly referring to their bylaws. I am confused about what they really are and I think they are too. They want to be an HOA when its convenient but claim they are not one when that is the convenient answer.

Personally I don't really care except that I want fairness and equity to all members and transparency and accountability.- Sherry

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Have you been to the courrhouse to get a copy of your CC&R'S? That is the binding contract. Most do have expirationsnwritten in them but I think there are state laws involved that is irrelevant. The state does not necessarily let such things expire without acualmaction. You still should have the articles of In corpation at the State level to look at.
If they are following the by laws then how are they being unfair?

Former HOA President

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Former HOA President

SherryS2 (Washington)
Posts: 47

Posted:

Quote:

Posted By MelissaP1 on 02/28/2013 1:40 PM
Have you been to the courrhouse to get a copy of your CC&R'S? That is the binding contract. Most do have expirationsnwritten in them but I think there are state laws involved that is irrelevant. The state does not necessarily let such things expire without acualmaction. You still should have the articles of In corpation at the State level to look at.
If they are following the by laws then how are they being unfair?

I have copies of the CC&R's and the bylaws and the Articles of Incorporation. Yes, the CC&R's expire. In Iowa they have a 21 year time limit. This has been discussed numerous times on this forum. And there is absolutely no doubt that they expired. End of this discussion about that topic!

They are not following the bylaws. That is my point. They follow them when its convenient, then make up new ones as they see fit.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Yeah that is how a HOA works. By laws are living breathing and changeable documents. A HOA is managed by it's members for it's members. So it can change the rules as it sees fit for what the owners want. Seeing the board is elected to represent the majority of the owners they most likely would be the ones involved changing the rules.

Former HOA President

SherryS2 (Washington)
Posts: 47

Posted:

Melissa,

Contrary to what you want to believe, state law trumps the CC&R's. Do you believe that all HOA's are immune to making mistakes and making poor decisions? From all of your posts it seems that way.

Some of us are in positions that we never expected or deserved to be in. What do you suggest is a remedy for that? Are we just supposed to accept that and live in a community where different rules and different assessments apply to different people. That is not what we signed up for up. And God help you if you say something to the BOD. Then they are eager to sue you over some trivial amount of money, don't let you participate, ban you from meetings, bring in a nonparticipating board member just to cast a vote against you. Then you spend money on attorneys that you don't have,they don't give you a straight answer, (husband has cancer, medical bills are piling up). Now I am ranting but it is very frustrating. - Sherry

SherryS2 (Washington)
Posts: 47

Posted:

Quote:

Posted By MelissaP1 on 02/28/2013 2:03 PM
Yeah that is how a HOA works. By laws are living breathing and changeable documents. A HOA is managed by it's members for it's members. So it can change the rules as it sees fit for what the owners want. Seeing the board is elected to represent the majority of the owners they most likely would be the ones involved changing the rules.

No, no, no! The bylaws cannot be changed without the members voting on the changes. They take no votes. The changes are not written changes. They just do what they want, when they want without proper procedures. Why is this so difficult for you to understand? This is what all of my posts have been about and you just don't get it or don't want to.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I have changed by laws and CC&R's before. By laws are easier to change. A lawyer even told me the by laws can be changed by the meeting notes or memos. Just as long as the members are notified.

The cost you saw on your neighbor was most likely NOT the amount they paid the HOA. It most likely was the court costs of the filing. A separate check was sent in not reflecting on that paperwork. It is not for public notice.

So what if you prove the CC&R's have expired? Does not dissolve your HOA. Your HOA still has things to cover like insurance and your sewer. I do not know what your rules state about how to divvy that up. It may not be equal. That happens.

Former HOA President

SherryS2 (Washington)
Posts: 47

Posted:

Quote:

Posted By MelissaP1 on 02/28/2013 2:58 PM
I have changed by laws and CC&R's before. By laws are easier to change. A lawyer even told me the by laws can be changed by the meeting notes or memos. Just as long as the members are notified.

The cost you saw on your neighbor was most likely NOT the amount they paid the HOA. It most likely was the court costs of the filing. A separate check was sent in not reflecting on that paperwork. It is not for public notice.

So what if you prove the CC&R's have expired? Does not dissolve your HOA. Your HOA still has things to cover like insurance and your sewer. I do not know what your rules state about how to divvy that up. It may not be equal. That happens.

Melissa,

You must be one of those people who has to have the last word even if it makes no sense so go for it!

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Laws vary by State. Bylaws are more typically covered under corporate law but may also be spoken about in the applicable property law (HOA/COA).

Some States do allow the Bylaws to be amended by only the Board.
Other States require membership approval.
Most States defer to the procedure that is written within the Bylaws itself on how to amend them.

JeanneK3 (Maryland)
Posts: 562

Posted:

Melissa:
Usually it is the governing documents that dictate who and how one can change bylaws. In Maryland it is almost always only with the approval of 2/3 of the homeowners. I'm amazed your board alone could do this. Any chance you could provide us with the section in your governing documents that allows this?
Jeanne

TimB4 (Tennessee)
Posts: 21,059

Posted:

Jeanne,

What Melissa is referring to as her Boards authority for changing the bylaws is based on Alabama statutes [emphasis added]:

Section 10A-3-2.31
Bylaws.

The initial bylaws of a nonprofit corporation shall be adopted by its board of directors. The power to alter, amend or repeal the bylaws or adopt new bylaws shall be vested in the board of directors, unless otherwise provided in the governing documents of the nonprofit corporation. The bylaws may contain any provisions for the regulation and management of the affairs of a corporation not inconsistent with law or the certificate of formation.

Laws vary by State but our responses are typically based on our own experiences and sometimes, if we are in a rush, it can be easy to forget that what may be normal operating procedure in your State might not be normal operating procedure in a different State.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

The bylaws may contain any provisions for the regulation and management of the affairs of a corporation not inconsistent with law or the certificate of formation.

by-laws only regulate the operation of the corporation and DO NOT constitute a contract among the members ~ that would be the CCRs which apparently have expired

y'all still own stuff in common

therefor, imo, there are NO DEED RESTRICTIONS in effect, merely some common elements requiring operation and or maintenance as a common expense

good luck

CAVEAT EMPTOR

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Wow JohnB we agree on something!

CC&R's are the deed restrictions. Irregardless if they are expired or not, your still in a HOA where you have shared elements. Which means that there expired rules about what kind of fence you can put up but not if you have to pay or not.

Former HOA President

SherryS2 (Washington)
Posts: 47

Posted:

Quote:

Posted By MelissaP1 on 02/28/2013 7:33 PM
Wow JohnB we agree on something!

So who determines who pays and what they pay? They could say we don't like you so you pay $15,000 for those services or we are board members so we don't have to pay at all. There has to be some consistent and fair way to collect for those services. The association is organized as an Iowa nonprofit mutual benefit corporation. That has been my issue since we moved to the subdivision; unfair and not proportional share of fees. Shouldn't it be split among the all the members receiving those services? There are 25 single family homes in the subdivision. Shouldn't we pay 1/25th of the expenses? - Sherry

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Can you please get over this "They" thing? It is you and your neighbors. So if your so-called "Fighting the HOA for fairness" your just fighting yourself and your neighbors. Let's try this again...If you are already talking to your neighbors and they believe paying is not being done equally or should not be done equally then you go to a board meeting in a group and discuss it. Not nosing into other people's business and discussing outside the doors.

You feel "They/HOA" will do something. That's just fear mongering. You don't know. It is all theory until you put it into practice. Can anyone tell you why one person may pay more than another? Sure. That person may not paid for 6 months so they may owe 15K. Another person may pay their equal share and pay 100 dollars. Your just taking people's word but not the circumstance. People aren't going to admit they are paying 5K because they didn't pay for months. That looks bad on them.

So to resolve your issue, hold a special meeting with your fellow members who are interested and decide the best solution. Does everyone need the sewer system? What is the cost of running it and saving up for future repairs? What percentage should you add on to cover those who won't pay or homes are in foreclosure? The more non paying homes the more money the good payers have to pay.

There are alot of financial factors involved in a HOA that can change on a moments notice. Since your HOA is ONLY funded by it's members for It's members...Those members have got to take up the slack. Including you.

Former HOA President

SherryS2 (Washington)
Posts: 47

Posted:

Quote:

Posted By MelissaP1 on 03/01/2013 6:26 AM
Can you please get over this "They" thing? It is you and your neighbors. So if your so-called "Fighting the HOA for fairness" your just fighting yourself and your neighbors. Let's try this again...If you are already talking to your neighbors and they believe paying is not being done equally or should not be done equally then you go to a board meeting in a group and discuss it. Not nosing into other people's business and discussing outside the doors.

You feel "They/HOA" will do something. That's just fear mongering. You don't know. It is all theory until you put it into practice. Can anyone tell you why one person may pay more than another? Sure. That person may not paid for 6 months so they may owe 15K. Another person may pay their equal share and pay 100 dollars. Your just taking people's word but not the circumstance. People aren't going to admit they are paying 5K because they didn't pay for months. That looks bad on them.

So to resolve your issue, hold a special meeting with your fellow members who are interested and decide the best solution. Does everyone need the sewer system? What is the cost of running it and saving up for future repairs? What percentage should you add on to cover those who won't pay or homes are in foreclosure? The more non paying homes the more money the good payers have to pay.

There are alot of financial factors involved in a HOA that can change on a moments notice. Since your HOA is ONLY funded by it's members for It's members...Those members have got to take up the slack. Including you.

I am going to leave this forum for awhile because it is just frustrating me. Tim and Larry shared some very good information and I appreciate that. Melissa, you just shoot off your mouth and don't know what you are talking about. I am going to concentrate on preparing for my small claims case and supporting my sick husband. - Thanks to all of you who were actually helpful!!! - Sherry

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Sherry

One can shop and shop for answers until someone agrees with them, but this does does not make either one right.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

oh for pete's sake ~ petition the appropriate court for a receiver ~ quit your b*t*hing

JohnB26 (South Carolina)
Posts: 1,569

Posted:

MelissaP1
(Alabama):

then, obviously, i am wrong with my advice

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Well JohnB you always wrong with me...

Again I ran someone off this forum for not giving them the answers in their head they wanted to see posted...

Sorry but I only give out "bootstraps" not Tshirts...One you pull up and get to work...the other you pull over your head and beg for your cause...

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By SherryS2 on 03/01/2013 4:35 AM

So who determines who pays and what they pay?

Sherry,

I'm going to go on face value of your conclusions to supply an answer to this.

1) The development was built without town/county sewage services
2) The CC&Rs required the Association to provide sewage service.
3) The Association became incorporated and the "corporation" ran the sewage service.
4) The Assessments authorized by the CC&Rs fully or partially paid for this service.
5) Per you, the CC&Rs expired.
6) This may or may not have removed the requirement of Assessments (need court ruling)
7) The Corporation, known as HOA Inc., is still providing sewage service
8) The Corporation collects "assessments" (could be called fees, charges, etc.) to pay the expenses associated with providing this service.
9) Going with your expectation that the CC&Rs no longer establish assessment authority, the Corporation can likely adopt their own fee schedule for the sewage service provided by them.

Bottom line, if you believe that this fee schedule is unfair, improper or in violation of State laws or County Codes, you have the following options:

1) Discontinue sewage service (likely isn't going to happen)
2) Get yourself elected to the Board of the Corporation so you are part of the decision process
3) Live with it
4) Move so you don't need to use their services
5) Take your complaints to the courts and see if they concur with your arguments.

Hope this helps.

The decision is yours to make

Tim

BB7 (Missouri)
Posts: 23

Posted:

TO Sherry What county are you in in IA. we want to move back home (IA.) but sure don't want to get in to another HOA we are already in one JUST LIKE YOURS hope things work out for you !!!

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