ammendments to C&R- how specific does the board need to be in the notification to residents

Started by EricaL2 • 5 replies • 1222 views

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EricaL2 (Louisiana)
Posts: 3

Posted:

We are a newly formed HOA and Board of Directors with a lot of work ahead of us. Our C&R are very vague and our current dues amount set will barely cover even a small budget of insurance and lawn maintenance. We have about 50% participation in paying dues. Many people consider the HOA a joke and are willfully not paying their dues. The BOD has met and decided the dues need to be increased. My question is when informing the homeowners of the meeting to increase dues, how specific does the information about the proposed change need to be? For example, the dues are $100 and the board is wanting to raise the dues to $200. Do we state: The BOD is proposing an increase in dues from $100 to $200 or can we say "the board is proposing an increase in dues"? If we say specific numbers and details then that is that the only thing that can be voted on at that meeting concerning dues? If its voted down, then do we call another meeting with another proposed change in dues repeating this process until an agreement is reached? Or if the proposed change in dues is voted down can the residents in attendance at the meeting discuss another proposal and vote on it that same night? Thanks in advance for your help.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Erica

Your issues are not C&R Amendments. They are dues collection and budget issues. You need to deal with each of them. How each is handled can vary from association to association and is usually covered in the association's C&R's and Bylaws.

Typically the procedure to collect back dues is to beg, beg, beg, then start kicking a$$. 1st action is typically to threaten a lien then file a lien. The 2nd action is to threaten a foreclosure then foreclose. Local and state laws can vary so best you look there. In some locales anyone on the BOD can file a lien on an owner on behalf of the BOD/Association Corporation.

Dues (assessment) increases can be dependent on your C&R's and Bylaws. Typically the BOD presents a yearly budget (in our case it must be done 30 days before the new year's budget) showing dues, including any increase for the year. Typically the owners do not get to vote on this. Typically owners can vote if they want to reject/refuse to accept the new budget but they do not get to vote on accepting it. Meaning they do not have to say yes to it, but they can reject it. Typically it will take a Special Meeting of the owners and over 50% of the owners (also often over 2/3rds) to reject the new budget. If rejected, the old budget stays in effect. Some docs allow for the BOD to increase dues a specific amount each year (I have seen as high as 25%) with simply a notification they are doing such and the owners can do nothing.

The above can vary quite a bit. It is meant as a guide to aid you in searching your owns docs and state laws.

ND (PA)
Posts: 792

Posted:

I agree with JohnC's statements . . .

The immediate problems you need to get on top of are dues collection and budgeting.

From what you posted it sounds like you're trying to get the paying 50% to now pay twice as much in order to compensate for the non-paying 50%. That's the wrong approach. You'll quickly find yourself with more that 50% who don't pay . . . especially if there's no consequence for not paying.

While your budget should probably be developed around the assumption that everyone will pay their dues, your expenses should reflect what you actually have to spend.

Insurance is a must-fund item. If you don't have it and you have an issue, then you all will be paying a ton more than you are right now.

However lawn maintenance is not a must-fund item IMO. While it's best to fund it, nobody's going to jail or being severely wronged by decreased landscaping. You could cut back on the services provided or the frequency with which they are provided in order to save money. The result will be a visual identifier to the owners that because people don't pay their dues, landscaping cannot be maintained.

EricaL2 (Louisiana)
Posts: 3

Posted:

The dues amount is stated in our C&R, $100. How should we go about changing that since it's stated in the C&R? I don't think we should ask the half of participating residents to shoulder the burden of paying higher dues to compensate for those who refuse to pay. I am the only board member who's is of this opinion. The others want to see improvements to our subdivision soon. I think we should adjust our budget according to the amount of dues collected. That may mean no improvements for years.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Erica

You first and fastest course of action is to go after those not paying.

Personally I have never seen C&R's that limit the dues. Not that do not exist, but they are rare theus this bears some closer looking at.

EricaL2 (Louisiana)
Posts: 3

Posted:

It was strange for us to see the amount of dues listed in the C&R. That's not usual, so it puts us in an odd position.

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