Legal definition of capital improvement

Started by RonW7 • 5 replies • 1814 views

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RonW7 (Ohio)
Posts: 122

Posted:

We plan on making major changes to our property. Each unit has a garden bed that is zones as common and they basically haven't been properly maintained for years. I want to get all of these areas mulched, but our by-laws state that any capital improvement that exceeds the cost of $500 must pass a community vote. It seems to me that this is more of a maintenance issue and this is probably a stupid question.

As far as the definition of capital improvement, I've read a few articles that suggest a capital improvement is the addition or enhancement of any permanent fixture that increases the value or usefulness of the property. If so, one could argue that performing much-needed maintenance on a neglected garden bed is indeed increasing the value of the house. I want to make sure I don't fall into any loopholes.

GlenL (Ohio)
Posts: 5,491

Posted:

Ron, you got it. Maintenance of a common element is just that maintenance, no matter how long it has been ignored. Now if instead of mulch, you decided to pave the common elements to provide more parking, that IMHO would be a capital improvement.

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

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Ron

Mulching an existing garden bed is not a capital improvement. It is maintenance of said garden bed.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This is not a capital improvement. You could do a special one time assessment for the work to be done. Which that will need a Major membership vote on it. Otherwise, your board may be able to raise the dues up to 5% amongst themselves. More than that constitutes a vote. Plus not sure you need that long term of a raise in dues. It will take longer and not make a lot of people happy. Read your documents for your best options and process.

Just wanted to post when buying mulch to be careful the kind you get. I believe Cyprus type mulches are best for deterring insects. In our HOA termites is an issue. Putting down wood mulch just attracted them more. So do some research to see what best to use. It may not be wood mulch you ma want to go for stone or recycle materials.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By MelissaP1 on 04/14/2015 7:57 AM
This is not a capital improvement. You could do a special one time assessment for the work to be done. Which that will need a Major membership vote on it. Otherwise, your board may be able to raise the dues up to 5% amongst themselves. More than that constitutes a vote.

Melissa,

I didn't know that you had access to the

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Melissa,

I didn't know that you had access to Ron's governing documents?

If you don't have access it would be irresponsible to advice (or opine) that the board can raise assessment by x amount without membership approval. OR to advice/opine that the membership must vote on assessments greater than x amount. OR to advice/opine that membership approval is even required for special assessments.

The only thing Ron offered is that "any capital improvement that exceeds the cost of $500 must pass a community vote."

To specify that the issue is not a capital improvement (which I believe is the general consensus) and then go on to say when membership votes are or are not needed concerning assessments without specific knowledge of the governing documents is simply providing bad advice or a bad opinion of the situation.

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