HOA spending funds on additional amenities but not maintaining other things?

Started by AnnH5 • 13 replies • 2179 views

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AnnH5 (Florida)
Posts: 304

Posted:

Our Board has decided to add additional amenities to our community. These new amenities are for the sole benefit of a select few homeowners and not for the benefit of all homeowners. In the meantime, the same Board will not spend funding to properly maintain & correct currently existing common areas and green spaces.

Our documents specifically state that the assessments levied by the Association shall be used exclusively to 1) fund the operations of the Association as elsewhere provided in the Declaration 2)promote the health, safety, welfare of the residents of the property and 3) for the improvement, repair, replacement, and maintenance of improvements to the Common Area, the cost of taxes, labor, insurance, equipment, materials, management, maintenance and supervision thereof and for other such purposes as are permissible activities and undertaken by it as set forth in the Declaration. of the Association.

Common area has been defined in the documents as all real property (including the improvements thereto) owned by the Association or dedicated to the Association on any plat for the common use and enjoyment of the Owners together with those areas dedicated to XYZ County, which Declarant has elected to continue to maintain.

As far as capital improvements, our documents state the Board has the power to charge a special assessment for a capital improvement, that in the judgment of the Board will benefit ALL lots. That seems to be it- nothing about owners needing to vote for capital improvements.

Is this a breach of fiduciary duty to spend funds for the installation of new amenities (that would also require ongoing maintenance) but to NOT spend funds to maintain the existing Common Area and correct deficiencies? I am not only concerned about having to pay for a new amenity that will not benefit me or a large majority but also that this new amenity will require ongoing care and maintenance AND we have a Board that isn't bothering to take care of the already present deficiencies.

I know the answer might be to get rid of the Board, but that isn't going to happen due to the apathy of others. Most homeowners won't even know about these new amenities until they are installed.

LarryB13 (Arizona)
Posts: 4,099

Posted:

The description of the new amenities is a bit ambiguous. You could be referring to amenities that all could use but few are likely to use, such as a skateboard park. Or you could be referring to amenities that will be located in a non-public place where only some will have access, such as a putting green in the president's backyard.

Assuming that the amenities are available for use by all, I see nothing wrong with the board's actions. The decisions on what to spend money on is theirs and they have made their decision.

It sounds like you have very little recourse. Your most obvious path would be to vote the bums out but member apathy makes that unlikely to happen. That is, unless you light some fires. You wrote that, "Most homeowners won't even know about these new amenities until they are installed." You know about them, so why are you not informing the other homeowners? Unless you give them a reason to get out and vote, they will remain apathetic. Quite often the best way to motivate voters is to let them know what their money is being spent on.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Well, Ann, from what you wrote it seems Larry is right that the Board acted appropriately. What would have been a breach of fiduciary duty would have been if directors who'll benefit differently than any other owners voted to approve this when, instead, they should have recused themselves to avoid "self dealing" and an actual conflict of interest. (I'm no way involved in the legal professions).

I also agree that you need to light some fires. Other owners may indeed become interested if they feel their dues are being spent foolishly, while more or less routine maintenance is being neglected. Even if you can find 2-3 others, meet and plan a strategy. Perhaps you can gather enough support to attend the next open meeting as a group and individually express your, um, "concerns."

Even though you don't want to say exactly what this "improvement" is, will you at least say whether it's an additional structure" Or an exterior vs. interior improvement?

I feel I need more details to help me understand your situation:

Did the Board discuss this potential "project" (for lack of a better word) at an open meeting? Did they vote on it? Did you attend? Were many other owners present?

Have you seen the minutes of this meeting?

Did the Board state how much this project will cost? Did the Board say how it will be paid for? Did they say special assessment? Or will the cost be built into the '14 budget?

Will bids need to be solicited? Or is everything read to set this project?

What size is your HOA? Size of Board? Do you have a CAM?

AnnH5 (Florida)
Posts: 304

Posted:

Quote:

Posted By LarryB13 on 11/16/2013 1:11 PM
The description of the new amenities is a bit ambiguous. You could be referring to amenities that all could use but few are likely to use, such as a skateboard park. Or you could be referring to amenities that will be located in a non-public place where only some will have access, such as a putting green in the president's backyard.

Assuming that the amenities are available for use by all, I see nothing wrong with the board's actions. The decisions on what to spend money on is theirs and they have made their decision.

It sounds like you have very little recourse. Your most obvious path would be to vote the bums out but member apathy makes that unlikely to happen. That is, unless you light some fires. You wrote that, "Most homeowners won't even know about these new amenities until they are installed." You know about them, so why are you not informing the other homeowners? Unless you give them a reason to get out and vote, they will remain apathetic. Quite often the best way to motivate voters is to let them know what their money is being spent on.

Dog park. So unless the homeowner has a dog and also wants to put their dog into a dog park, it is an amenity that is not for the benefit of all. It will however, be an amenity that all homeowners will pay for. It will also be a liability and there will have to be some type of maintenance. Bear in mind that I live in a community where many dog owners do not pick up after their own dogs. I also live in a community where the Board can't be bothered to do any weed control, pesticide application, or sod replacement. Even though the money is there for those line items. In the past, I would inform homeowners but at this point in time, it is an exercise in futility. Too many have just completely disengaged. The sad thing is that this community looked wonderfully maintained when we bought our home here. Now it looks run down.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

A dog park is an amenity for all. It is attractive to potential buyers. Which is what the HOA as a whole is supposed to do. I know many people who don't swim, hate swimming, and never ever use our swimming pool. However, when advertising selling their home guess what is mentioned available? A pool. That is because it is an amenity that is attractive to many potential buyers.

A HOA does what the majority of owner's want done or who is the most involved in their HOA. If my HOA said they wanted to paint the roads red, my job as President was to find out how much it cost, the best options, and paint the roads red. Don't know why anyone would want that but if it is what is wanted you do it.

I find a dog park attractive idea on many levels even for non-dog owners. It keeps the dog's out of your yard and into a contained area. Thus keeping your area more attractive and less subject to dog feces damage.

Sorry but if you want the other things addressed, then go to the meeting and ask for that too. Your HOA is ONLY funded by it's members for it's members do don't be shocked if dues are raised or a special assessment requested. It cost money to maintain what one wants.

Former HOA President

AnnH5 (Florida)
Posts: 304

Posted:

Posted By CarolR11 on 11/16/2013 2:27 PM
Well, Ann, from what you wrote it seems Larry is right that the Board acted appropriately. What would have been a breach of fiduciary duty would have been if directors who'll benefit differently than any other owners voted to approve this when, instead, they should have recused themselves to avoid "self dealing" and an actual conflict of interest. (I'm no way involved in the legal professions).

I also agree that you need to light some fires. Other owners may indeed become interested if they feel their dues are being spent foolishly, while more or less routine maintenance is being neglected. Even if you can find 2-3 others, meet and plan a strategy. Perhaps you can gather enough support to attend the next open meeting as a group and individually express your, um, "concerns."

Even though you don't want to say exactly what this "improvement" is, will you at least say whether it's an additional structure" Or an exterior vs. interior improvement?

I feel I need more details to help me understand your situation:

Did the Board discuss this potential "project" (for lack of a better word) at an open meeting? Did they vote on it? Did you attend? Were many other owners present?

Have you seen the minutes of this meeting?

Did the Board state how much this project will cost? Did the Board say how it will be paid for? Did they say special assessment? Or will the cost be built into the '14 budget?

Will bids need to be solicited? Or is everything read to set this project?

To answer your questions:
There is no more "fire lighting". We attempted to oust certain Board members last year and to not encourage others to vote for their friends (who are also now sitting on the Board). They won by narrow margins and they were very active with sending out self promoting flyers and going door to door to get votes. They also spent a great deal of time bad mouthing the few previous Board members they didn't like and they even went so far as to make some false promises. These people are also fond of telling homeowners that the business of the Board is exclusive to the Board and has nothing to do with the homeowners. I find that perplexing considering that the Board is supposed to represent the interests of the Homeowners. Going to any more Board meetings is out of the question for me. They have gone on for as long as 4 hours and when any Homeowner brings up a legitimate concern, they are typically told to shut up and MYOB.

They are planning a dog park. I assume this will entail a fenced area, any extra liability insurance, treatment for fleas/ticks/parasitic worms on the grounds, sod replacement, and rule enforcement measures. We already have many dog owners who walk their dogs around the area and do not pick up the dog's excrement.

Yes, the Board "discussed" the dog park at an open meeting. I did not attend the meeting. Since the year is nearly over, the cost would have to be built into the next year's budget. Nobody has yet seen a copy of the proposed budget. Typically we receive a copy of the budget by now with payment coupons so I have no idea what they are doing this year. There aren't many weeks left this year and our assessments will be due in the beginning of January. Even if it was a line item, this crew is more than happy to take the money from other line items or even from reserves (which are grossly underfunded given the amount of maintenance that still needs to be done).

I have no idea if bids will be solicited. This same group has done projects as "volunteers" but then billed the Association. I don't have any reason to believe they have managed to even begin to find the companies that will need to be hired to do dog park construction and maintenance. There is the possibility that this is another one of the Board's hare brained schemes and they think if they build an enclosure and slap "Dog Park" on it then that will complete their work. As far as volunteerism to oversee it, good luck. In this community, people will get all jazzed up over an idea and it fizzles after it is put into motion. Once people realize they will actually be working for free, they typically get over their enthusiasm.

This is a 515 home community. We have a CAM but the Board is in the process of getting a new company. Apparently our Board President has a vendetta against the current company since one of the previous CAMs refused to waive his late fee as "a favor" and vowed to make the property management company and the CAM "pay". That CAM quit rather than face another year of work place harassment from the Board President. Then we had another CAM who lasted all of 5 months and then quit rather than work with the Board. Now we have another CAM but the property management company will not have their contract renewed so I guess we will be getting another CAM- the 4th one in less than 12 months.

AnnH5 (Florida)
Posts: 304

Posted:

Quote:

Posted By MelissaP1 on 11/16/2013 2:59 PM
A dog park is an amenity for all. It is attractive to potential buyers. Which is what the HOA as a whole is supposed to do. I know many people who don't swim, hate swimming, and never ever use our swimming pool. However, when advertising selling their home guess what is mentioned available? A pool. That is because it is an amenity that is attractive to many potential buyers.

A HOA does what the majority of owner's want done or who is the most involved in their HOA. If my HOA said they wanted to paint the roads red, my job as President was to find out how much it cost, the best options, and paint the roads red. Don't know why anyone would want that but if it is what is wanted you do it.

I find a dog park attractive idea on many levels even for non-dog owners. It keeps the dog's out of your yard and into a contained area. Thus keeping your area more attractive and less subject to dog feces damage.

Sorry but if you want the other things addressed, then go to the meeting and ask for that too. Your HOA is ONLY funded by it's members for it's members do don't be shocked if dues are raised or a special assessment requested. It cost money to maintain what one wants.

I have asked for other things to be addressed. The answer was that it was the previous Board's fault (they had plans in the works and then did not get re-elected) AND I was told that if I wanted certain work done then I would have to recruit my neighbors and we would have to do that work ourselves. Many of my neighbors are elderly and are not able to do hard manual labor.

I own a dog and I would never put my dog into a dog park. I guess a dog park would be attractive to a buyer who 1) owns a dog and 2) wants a dog park. Otherwise, some potential buyers may also swing the other way and not want an enclosed area full of barking dogs near their homes. If such a park is put near my own home, my dog would cry and whine all day hearing all of the other dogs. It would be a very unpleasant thing for us to live with. We have not had a problem with other dogs in our yards so that isn't a good point at all.

The majority of homeowners don't even know about this dog park. One person I spoke with believed that too many people would object. That won't matter to the Board. If their friends want a dog park then by God, the HOA assessments will be spent on a dog park. I secretly hope we are all charged a special assessment. Maybe that is the fire people need?

CarolR11 (Colorado)
Posts: 2,563

Posted:

Do you have the minutes yet of the meeting where the DP was decided? They certainly should say where it'll be located, its size, etc.

But it really doesn't sound like much progress has been made on this decision.

Then, visit those immediate neighbors to see it you can gin up some interest in taking care of current needs, and postponing a project the funding source and annual maintenance source of which aren't specified.

I wouldn't use the argument that there'll be lots of barking. There are plenty of Dog Parks in my urban neighborhood and dogs romp but rarely bark.

But it really doesn't sound like much progress has been made on this decision.

It's a shame, Ann, that so few of your neighbors are willing to actively protect their investments and are willing to sit back and just "let the board do it." Given how unpleasant it's become in your HOA, I think I'd be tempted to move on.

But if you stay, you & others simply must raise a fuss at meetings, send letters to the Board & CAM, and do what you can to get your HOA back on the right track.

AnnH5 (Florida)
Posts: 304

Posted:

Quote:

Posted By CarolR11 on 11/16/2013 4:46 PM
Do you have the minutes yet of the meeting where the DP was decided? They certainly should say where it'll be located, its size, etc.

But it really doesn't sound like much progress has been made on this decision.

Then, visit those immediate neighbors to see it you can gin up some interest in taking care of current needs, and postponing a project the funding source and annual maintenance source of which aren't specified.

I wouldn't use the argument that there'll be lots of barking. There are plenty of Dog Parks in my urban neighborhood and dogs romp but rarely bark.

But it really doesn't sound like much progress has been made on this decision.

It's a shame, Ann, that so few of your neighbors are willing to actively protect their investments and are willing to sit back and just "let the board do it." Given how unpleasant it's become in your HOA, I think I'd be tempted to move on.

But if you stay, you & others simply must raise a fuss at meetings, send letters to the Board & CAM, and do what you can to get your HOA back on the right track.

Carol, you are spot on about moving and a few other homeowners have given up and sold their homes solely because of the problems. I think this HOA has permanently derailed itself. Sometimes I drive through other communities and see this community's future.

As far as progress on any decisions, this Board is also known to meet outside of official meetings and discuss their plans amongst themselves. It is pretty apparent in the open meetings that the "business" was conducted before anyone ever got to the table.

If this was a case of having enough funding and all of the other things that are now in disarray and in need of repair were being taken care of, maybe I wouldn't care about having to pay for a dog park that I will never use. Although, seeing how most people around here have fenced in back yards, I fail to see the point of fencing in an area as a dog park. What is the dog going to do at the dog park that they won't do in their own back yard?

So really, my question is still this- does a Board have a fiduciary breach of duty when they neglect repairs but install new amenities for a select few homeowners?

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Ann,

The dog park will be very inexpensive to operate but will be a new amenity. I oppose adding new amenities if legacy amenities are in need of maintenance and repair (flower beds excepted). Unless the dog park is the repurposing of an amenity that would, otherwise, be too expensive to repair sensibly, I agree with you, but I'm not leaving my home over an HOA....at least not yet.

GlenL (Ohio)
Posts: 5,491

Posted:

Do your CC&R's address Capital Improvements at all??? For instance our CC&R's limits the amount the Board can spend on Capital Improvements without homeowner approval at two thousand dollars ($2,000.00)

Studies show that 5 out of 4 people have problems with fractions

AnnH5 (Florida)
Posts: 304

Posted:

Our CCRs do not have limits for capital improvements. The language states that the Association may levy a special assessment for a capital improvement that, in the judgment of the Board, benefits all Lots. Naturally, the proposed amenity will not benefit all Lots. What I imagine the Board will do is to take the money out of the regular assessments and continue to ignore the other things that have fallen apart or need repair. That is a theme for these people.

Kelly, we won't be selling over a dog park. We will be departing as soon as feasible because what was presented to us as a beautifully maintained community is becoming unattractive and poorly managed by a few homeowners who are inept and into their own self promoting activities and concerns. There has also been a push to do things cheaply and to have amateurs "volunteer" to make improvements. The results are evocative of perhaps that which would be better suited in a low rent trailer park. Considering how much our homes cost back in the day, it is beyond a disappointment.

It is a shame and we will surely be losing money, but at some point you just cut your losses and move on. I can't say I would ever desire to live in a "HOA" again. Living in a "HOA" did not protect our property value nor did it actually enhance our quality of life. I hope there are other Associations that would prove me wrong but after reading the messages in this forum, I am not very hopeful.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Ann,

Good luck on your relocation and I can't blame you. If your board will not allow professionals to create professional looking amenities yet add new amenities, it's a severe cause for concern. It's better to have fewer amenities that can be kept in top condition.

AnnH5 (Florida)
Posts: 304

Posted:

Quote:

Posted By KellyM3 on 11/18/2013 8:17 PM
Ann,

Good luck on your relocation and I can't blame you. If your board will not allow professionals to create professional looking amenities yet add new amenities, it's a severe cause for concern. It's better to have fewer amenities that can be kept in top condition.

I am going to give you an "Amen" on that! The other piece to this is that the longer they screw around and devote our funds to their "wants", the repair expenses on the "needs" just to get them back to some sort of standard will be higher.

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