Assessment Legality

Started by RaymondD • 7 replies • 1763 views

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RaymondD (North Carolina)
Posts: 3

Posted:

Is an assessment binding whether or not a Homeowners Association is Voluntary or Mandatory? If there is common property that needs to be maintained and the assessment is fair as stated in the by-laws I think it is binding but I am not sure. Also what percentage of the homeowners is necessary to make a homeowners association mandatory? Someone told me %100 in North Carolina. I'm new to HOAs and would appreciate any or all input.

RogerB (Colorado)
Posts: 5,067

Posted:

Raymond, whether your associaton is voluntary or manditory is determined by your Declaration of CC&Rs. If there is a covenant (agreement) to pay an assessment then the HOA is manditory and every owners is automatically a member of the HOA. Contrastingly, a voluntary HOA has nothing in the Declaration which requires payment of assessments by homeowners. The members of a voluntary HOA chose to join and pay dues; there are no assessments against the property. To summarize - manditory HOAs have assessments which are binding; voluntary HOAs have dues are not binding.

If there is common property I presume it is a manditory HOA. Percentage of homeowners does not determine the type association. Rather the type associations, manditory or voluntary, will result in the percentage of owners who are members.

RaymondD (North Carolina)
Posts: 3

Posted:

Thank you for responding Roger.

Just a few followup questions I do see an assessment allowed for street lights ( which the town is currently paying) in the CC&Rs but there is no mention of the common property and it's water and light bills plus maintenance. Can an increased assessment be added to the by laws to cover those costs? Also because an assessment is mentioned in the CC&Rs does that still mean that the HOA is mandatory. Obviously a new owner moved into the community and he is not only questioning the assessment but also the entire validity of the HOA. BTW the assessment is $35.00 a year per household so we are not trying to strangle him with costs. Thanks again for your response.

Ray

RogerB (Colorado)
Posts: 5,067

Posted:

Raymond, usually the Declaration identifies what the assessment covers. Generally it covers all common areas, taxes, insurance, utilities, meeting expenses, communications expenses, management expenses, and other items. Your answers regarding the validity of your HOA should be spelled out in your Declaration. I doubt that owner has any basis for their challenge; it is probably wishful thinking. $35 geez

RaymondD (North Carolina)
Posts: 3

Posted:

Thank you so much Roger

BarbaraS (New Mexico)
Posts: 49

Posted:

Roger - You've been a great help in the past. We are in the process of updating our 20-year-old covenants. Our by-laws state the "Declaration" has precedence. I can find no document labeled "Declaration" - there is a statement about the purpose of the HOA (as a single family residential community. The by-laws identify the establishement of the Ex Board and it's responsibilities and powers. There is the original "Restrictive Covenants". Are one of these considered to be the "Declaration"?

RogerB (Colorado)
Posts: 5,067

Posted:

Barbara, the Declaration of Covenants, Conditions, and Restrictions also goes by such names as Declaration of CC&Rs, Covenants, and Restrictive Covenants. No matter which yours are called they are the primary controlling document.

BarbaraS (New Mexico)
Posts: 49

Posted:

Thanks Roger - that simplifies everything for me.

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