Is the HOA Board liable?

Started by SteveS8 • 6 replies • 1352 views

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SteveS8 (New York)
Posts: 128

Posted:

Our Offering Plan indicates in its proposed budget an item as follows:

A proposal to have a Shuttle Bus (at $200,000 a year). This item was used as a selling tool by the sponsor.
The Shuttle Bus is not mentioned in the by-laws or C&R's, and the Shuttle Bus has never materialized even after 6 years. Is this item binding on the HOA?

In general, is anything mentioned in the Offering Plan binding if it is not recited in either the by-laws or the C&R's?

Thanks,
Steve (our Condo is in New York)

CarolR11 (Colorado)
Posts: 2,563

Posted:

I may be the only one, but confess my ignorance: What is an "offering Plan"? What is a "sponsor"?

SteveS8 (New York)
Posts: 128

Posted:

Offering plan = prospectus
C&R's = covenants and restrictions. - this seems much less relevant than the by-laws
Sp our builder who has control over our board (4 to 3) until he sells the last of the 720 homes in our community.

Steve

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Steve

I am not nor do I play a lawyer.

I would say the offering is a maybe, might could, would like to, etc. but not a contract to do so.

FredS7 (Arizona)
Posts: 927

Posted:

I think the shuttle bus would need to be declared in the CC&Rs for it to be a responsibility of the HOA.

The promise to have a bus was made by the builder. Depending on the language in the offer (which probably has lots of weasel room) you might be able to sue him.

(not a lawyer of course)

NameW (Virginia)
Posts: 74

Posted:

The way I am reading it (and no I am not a lawyer and know nothing about NY Law) A group sold you a house in a proposed community. You purchased the house with the expectation the promised shuttle bus service would exist. The Group/Developer ran out of class B shares and transferred ownership to the HOA once everything became class A shares, but failed to ever put the shuttle bus service on the annual budget or into the Covenants, By-Laws or Articles of Incorporation. If my understanding of the situation is correct, the bus is not binding on the HOA. No more than any other proposed annual budget item that is not approved would be. It is possible a review of past Minutes going back to the earliest days would find mention of the Bus and a killing of the proposal. The real issue would be, did the holders of class B shares (the developers) provide compensation to any party that purchased the property based on a written promise the bus would come? How much financial harm materialized as a result of this broken written promise? If it was written in language that says in effect, 'maybe' someday we will have a shuttle bus, then nothing can be done about it because of the word 'maybe.' There are lots of maybe situations in life and nothing can be done about them. I.e., maybe someday all guns will magically vanish from the earth and everyone will magically forget how to make one. We hold our breath. Likewise, if it was coached as 'it is proposed to initiate a shuttle bus,' 'proposed' carries the same weight as maybe, if the records show it was proposed and someone said, nope.
Just my 2 cents worth.

FredS7 (Arizona)
Posts: 927

Posted:

Another thought. The builder, had he delivered, would have bought a van and funded its operation, at least in part, from HOA fees. Small, or zero cost to him. Once the homeowners were in control, they would be responsible for the entire cost of running the thing. Unless you have a very particular situation (lots of older people who don't drive who want to get to the mall) it would be difficult to maintain funding.

Not having a van now might be a good thing.

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