How to amend covenants to increase maintenance fees

Our HOA has been in existence since the early 1980s when it was turned over from the developer to the HOA. There are at least four different covenants among the 45 or so property owners. There is quite a bit of common property, including water, roads, boat ramp, and recreational area. All of these require basic maintenance such as mowing and snow plowing and also long term maintenance, including upgrades to the roads and the boat ramp. At this time, we need around $60-75,000 to resurface the roads and repair the boat ramp. The problem is there is a statement in all the covenants that says no more than $100 a year per lot can be collected for maintenance. Obviously, this is impossible to even do the basic maintenance, never mind to make any capital improvements. We have read in several places that covenants can't be changed without 100% agreement and some people will never agree to raise the fees ever. So, we are in a bind - we do request and receive donations for some things but will never be able to raise enough for the big expenses through donations. There are many people who are willing to be assessed to improve the roads and some who will approve the boat ramp, but also some who refuse to pay anything unless every single owner chips in for their share. We did do an assessment for the water system but only because the county was going to step in and force the issue.

The other issue is the many covenants have not been enforced over the years or people pick and choose which ones they care about and which ones "everyone" ignores. We really need to update all the covenants to be logical and reasonable and also to align with the West Virginia HOA Law and to be able to assess property owners to keep the community in good condition.

I would appreciate any advice on how to accomplish amending the covenants short of getting 100% agreement or ways to assess the owners fairly so our neighborhood doesn't fall apart. Thanks for any help.

If it's set at $100 per year, you simply do a special assessment for anything that is needed that is not in the budget. Just like you did for the water project.

If your documents specify 100% agreement on all issues, you may want to start with amending them to allow for a smaller percentage, say 51%. That doesn't take away anyone's right to vote, but it would be easier to get some things passed (if naysayers don't like a proposal, they'll have no choice but to cast a vote.)

The following is the long way to amend documents, but you may not have a choice - and you want to make sure the changes will stick and stand up in court

1. Have a town hall meeting to discuss the problems with the CCRs - they're outdated, don't give the Board enough flexibility to make changes, etc. From there, organize a committee that will study the issue in more detail and make recommendations. You might also sponsor a poll where people can weigh on what they'd like to see.

2. Have your association's attorney review the documents to see what changes absolutely need to be made to comply with current law. You'll need his or her guidance throughout, in case someone comes up with a proposal that won't fly in court.

3. Once the committee or board comes up with some proposals, publish them in the newsletter or send a letter to homeowners asking them for their comments. You should explain what the proposals will do and why they're needed - hopefully the comments will include more good ideas to consider and not be limited to "we've always done it this ways for years so why should we change now?"

4. Revise the proposals as needed and then roll them out to the homeowners to cast a vote. Your attorney might also give you some suggestions on how to pull this off because you'll probably need to follow up with some people.

For example, instead of changing everything all at once, select the items that are needed the most right now (like reducing the owner approval percentage), get that passed and then roll out other changes (which won't need the 100% approval because you already took care of that)

Marilee,

Even thirty years ago your declarant should have known better than to place a limit on assessments. I was a grown-up in business for myself at that time and recall that it was a period of extremely unstable prices. What was a really bad idea 30 years ago is now a legal impossibility. You simply cannot raise enough money for maintenance when you are limited to just $100 per lot. Not only is it legally impossible to operate within that limit, there is an ambiguity in that your board is charged with performing certain tasks that require an expenditure of funds while being prevented from acquiring the needed funds.

You could deal with this several ways. If you cannot amend the covenants quickly enough, you could go to court and have that provision of the covenants declared invalid. That will take some time and cost a few bucks.

In the alternative, your board could just raise assessments to cover the current costs plus begin putting money into reserve funds. Basically, you would be ignoring the limitation. If someone objects, hand him the yellow pages listings for attorneys and suggest he pick one. Unless you raise assessments outrageously high, no attorney is likely to pursue an action to keep them at the rate from three decades ago. If the objecting owner does find an attorney to take his case, he will likely drop it once he finds that the attorney wants a retainer of five to twenty thousand dollars.

Read your declaration to find out how to amend it. There is usually some provision for doing so and that should tell you the percentage of owners who must approve of any changes.

Thanks everyone. To answer some of your comments, there is nothing in the covenants about additional assessments or anything about raising the fees at all - the only thing is the "no more than $100 per year." I know that's crazy, but that's what it is.

The advice is good per just to go ahead and assess and/or raise dues and tell the naysayers to get a lawyer; also, it's very good advice to change the covenants (or by-laws?) to lower the percentage of votes needed to change/amend the covenants - we may try that but will get a lot of push-back because it will be obvious the reason is to raise the fees. I did see a section in the WV HOA Law that the declaration can be amended with 67% of members, but I'm not sure I am reading it correctly:

"36B-2-117. Amendment of declaration.
(a) Except in cases of amendments that may be executed by a declarant under section 2-109(f) or 2-110, or by the association under section 1-107, 2-106(d), 2-108(c), 2- 112(a), or 2-113, or by certain unit owners under section 2- 108(b), 2-112(a), 2-113(b), or 2-118(b), and except as limited by subsection (d), the declaration, including any plats and plans, may be amended only by vote or agreement of unit owners of units to which at least sixty-seven percent of the votes in the association are allocated, or any larger majority the declaration specifies. The declaration may specify a smaller number only if all of the units are restricted exclusively to nonresidential use."

Also, I need to get the original declaration from the county to know for sure it says 100% of the members must vote to change it.

Thanks again!

Is the common law available to cite somewhere? I'm going to gather the options of next steps and that would be a great addition. It seems that raising the fees and/or just doing the assessment would be acceptable to courts but would like to be persuasive enough to get everyone on board without going the legal route.

BTW, yes, about $4,500 a year in total is all we have from fees - we rely on donations for some things but is only maybe $1,000 more a year.

Thanks!