One-time Buyer's Capital Fee...

Our HOA levied a one-time buyer’s capital fee that is to be charged to all buyers (new owners). For justification, they cited Section 5, Special Assessments, of our Governing Document, which states:

“In addition to the Annual Assessment authorized above, the Association may levy in any assessment year a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, repair or replacement of capital improvement upon the Common Area, including the fixtures and personal property related thereto, or other specified purposes; provided that any such assessment shall have the assent of more than two-thirds (2/3) of each class of Members who are voting in person or by proxy at a meeting duly called for this purpose, written notice of which shall be sent to all members not less than twenty-five (25) days nor more than fifty (50) days in advance of the meeting, setting forth the purpose of the meeting.”

In introducing this fee, the HOA said “the "BOD met on or about August 31st and duly established, by rule, a one-time buyers Capital Fee and policy, and Whereas, this "Capital Fee" will be....amount will be determined by the BOD and will be due at settlement."

My question is this. If this One-Time Buyer’s Capital Fee is a special assessment, doesn’t it have to have the assent of more than two-thirds (2/3) of each class of Members who are voting in person or by proxy at a meeting duly called for this purpose, written notice of which shall be sent to all members not less than twenty-five (25) days nor more than fifty (50) days in advance of the meeting, setting forth the purpose of the meeting?

This “special assessment” was never put on the annual meeting call nor was it voted on by the membership. I note that BOD just raised this special assessment from $300 to $498, which is a 66% increase. Does the BOD have the power to levy such an assessment without the requisite 2/3rds vote?

Thanks…

I also don't see how this can be legit, Howard.

A special assessment would apply to all Owners and is only for specific purposes or other purposes that are, if fact specified too. What purposes did the Board lay out.

So I also agree with Larry's and your own reasoning. the Board (not the "HOA"), moreover din't use Article 5 as a "justification," they just used it as a citation that doesn't get their actions.

Do you have any ideas what you and other homeowners can do about this??

In researching this, I have seen other HOAs charging twice the monthly dues or so for a one-time capital fee. We are a small neighborhood and this fee is more than one year's HOA dues (in fact, I have lived in the neighborhood for 22+ years and the portion of my annual dues over the years going to our reserves doesn't even come close to the $498 the BOD is making new buyers pay). Regardless of the amount, the BOD cited the special assessment section from our governing documents to justify the charge. A special assessment is supposed to be for a specific project and passed by 2/3rds the owners. Neither is true. If the BOD wants to levy a one-time buyer's capital fee, the can; however, they need to amend the governing documents to allow so and not cite the special assessment section as basis for their action.

In addition to comments that others have made, there is also the question of what happens in year 2 ... And then year 3 etc.

Is the board's "one time" fee going to be renewed annually - which sounds absurd not to mention violating your docs even more?

Or are the buyers this year going to be theonly ones to pay - and subsequent buyers pay no fee?

The whole thing sounds like it was poorly thought out.