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TaraR (Arizona)
Posts: 24
Posted:
I have a question regarding the legalities of our current situation. Here’s a run down:

April 9th: Board meeting approves to have annual meeting June 18th. Putting the vote to increase board members from 3 to 5. And a special meeting for a $1,400 special assessment. At that time, one board member was resigning. I volunteered and was going to be appointed on April 11th.

April 11th: All board members resigned. Prior to appointing myself or another homeowners to the board, leaving the community with no representation other than the PM and associations attorney.

April 25th: Community petition signed to elect board member to fill the empty position. Set for May 29th.

May 19th: Received special meeting ballot from association’s attorney office. At the same time as my special meeting to fill the vacant BOD spots, the attorney moved the special assessment of the $1,400 approved for June 18th to May 29th of $800.

My question: can the attorney of the association make a decision to move the special meeting approved by the board before resigning, change the date and dollar amount? Would this be cost that the attorney approved without having the legal right or approval to do so? I thought the special meeting could only be called by 25% of the homeowners or by the board…per our documents?

As you can tell, I’m furious that the attorneys has moved this special assessment to the same date as my special meeting to fill the board. If anyone has a legal insight on this, I would like to hear your thoughts.
RogerB (Colorado)
Posts: 5,067
Posted:
Tara, did you ask the association attorney why they changed the date and the amount of the special assessment? Perhaps the Board, prior the resignations, authorized the attorney to take actions on their behalf. If so, then it is legal. If not, perhaps they did it because they think or know there currently are no Board members. It appears they may be trying to help the HOA get a new Board installed ASAP. I would go along with their plans to get things back in order ASAP. Then the new Board can make decisions as to where to go from there regarding the special assessment. The amount of the assessment can be discussed at the meeting and if necessary table the assessment until another meeting to increase it.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I was in a similar situation with the involvement of the special assessment. Although it didn't have the added resignation of the board. However, I think from my experience I see a few things going on here that may clear up a few issues.
First, that special assessment orignally at $1400 then reduced down to $800 does make sense IF we knew more details on that situation. A special assessment is NOT voted in by the board but by the majority of the HOMEOWNER's. Did the board vote for the special assessment alone? The board may get bids for the work and then present it to the homeowner's for a vote in a special meeting to collect/approve the funds to be spent on the project. That takes anywhere between 51% - 75% of the homeowner's vote to approve the project/expenditure depending on your docs.
Here's the tricky part about special assessments. Let's say you have 100 homes. A project needs to be done to add a fence around the neighborhood. That project is going to cost $10,000. The board gets a contractor willing to do the job. The board then goes to the homeowner's and request a special meeting/vote to approve the special assessment. The amount of the special assessment MUST be divided EQUALLY amongst ALL the homeowner's. That means that ONLY $100 from EACH homeowner can be collected to cover the costs. The amount collected can ONLY cover the cost of the project with a little overture costs. The board can't arbitarily decide that let's do $150 a person that way we can apply any extra money to any other X project. The cost of the special assessment should ONLY cover the cost of the EXACT project the homeowner's approved.
My HOA levied a special assessment of $150 to all the homeowners for a pool project. However, upon investigation, I discovered the cost per homeowner should have been only $78 a piece. The repair was more than needed and they planned on spending the "extra" money on other projects NOT discussed. A big NO-NO. The money in a HOA is EVERYONE's money. You as a member have a right to know where your money is being spent and on what. It's NOT good for a board to control the money as if it was all theirs. Hence, why everyone has a vote in a HOA.
The special assessment was voted in by the homeowner's and therefore irrelevant to the board vote. The board elections should be held to pretty much "kill two birds with one stone". The people should know who they are electing to represent them. That's what board members do. They represent the majority of the homeowner's and handle every day tasks on their behalf. They are voted to best spend the money in the HOA on the needs of the entire homeowners. If they want something painted red, the board is to find a contractor to do the work, collect bids, and then present it for a vote to spend the money. It is NOT the board decides the best improvement they want done, and then allocates the money on that project. It's a community and a community votes.

Former HOA President
JM2 (Oregon)
Posts: 439
Posted:
Hi Tara:

I would imagine that the attorney might want to put the board replacement vote at the same time as the special assessment vote, to better guarantee a quorum for voting for board members, plus the reduction in the number of notices sent out and the cost of running two votes vs. one...

If $1400 is legitimately needed, then if the $800 passes, the new board could propose another $600 special assessment to make up the difference.

It might be worthwhile to talk to some of the board membes who resigned, to find out why they did. You might also talk to your PM to find out what he/she knows about why they resigned, and why the special assessment changed.

JPM

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