Capital Improvements Funding

Is this a voluntary homeowner association - by that, I mean if you buy a home in this community, are you automatically considered to be an association member, and therefore, must pay assessments to care for the association's common area (the beach front property?). If so, why hasn't anyone been paying them? How did you care for the property up to this point?

Does the association have ANY money? How much and where did that come from? If the residents are using the beach front property, it seems to me you should be able to assess a special assessment to come up with the money and to do that, you need to look at your governing documents (CCRs and Bylaws). As you know, the Bylaws dictate how the community is to be run (e.g. the number of board members) and the CCRs usually dictate how the common area is to be used. One or both of these should have language on special assessments - typically a certain percentage of homeowners must vote to approve it.

So, you'll need to call a special meeting to discuss the situation - what's wrong with the property and what will be done with this special assessment, how much this will cost per homeowner, etc. Then you'll need to call for a vote - the people who don't attend should get ballots and materials in the mail explaining the situation. If everyone votes for these repairs, you can get on with collecting the money.

Then, you 'll need to sit down and determine what you'll do to keep this from happening again (like get a reserve study and establish a reserves account). If no one wants to go through this, you need to decide what will happen to the property - do you petition the county to take it over (and increase your taxes accordingly because maintenance isn't free?If the county won't take over, your association will have to start acting like one and begin assessing homeowners. That means creating a budget and checking your documents to see how they're approved. In some communities, the homeowners have to ratify the budget but in others (like mine), the board of directors can increase assessments up to 5% over the current year's assessment - anything higher requires homeowner approval.

A HOA is ONLY funded by it's members for it's members. So if you all need this money, then you ALL must ante up your share of the costs. Which is usually divided equally amongst all members.

A little confused on some of your information. HOA's are typically volunteer ran not for profit corporations. Doesn't mean it's volunteer only to be a member of it. Is your HOA mandatory or voluntary to join?

The numbers don't add up. Do you have 120 lots/houses/property or 200? It's usually 1 vote per lot. You can have others volunteer on committees and such that aren't members. However, they don't have the right to vote or be board members if not actual owner.

Your choices are limited. Either raise the money amongst every member or get a loan. A loan will still require everyone to kick in money to make the payments. Special assessment is what your looking at doing.