BillD15 (South Carolina)
Posts: 14
Posts: 14
Posted:
We had our HOA member annual meeting recently where we voted on the proposed budget for 2019. We received the proposed budget 30 days in advance of the meeting as required. I disagreed with the proposed fee structure for rental spaces in our neighborhood storage yard and tried to amend the budget (I got the floor and proposed the change). My change wouldn't affect the bottom line just the way the fees were allocated. The board wouldn't allow a binding vote on it. They did allow a show of hands to see who agreed with me, a vast majority did, but that was it.
Their argument for not allowing the line item amendment is based on a similar incident from last year where we tried to amend a budget line item. We were told then that we are not allowed to change the line items, only the bottom line per this email:
"An Attorney that represents 100's of Associations in multiple states has reviewed our Covenants and By Laws about amending the Budget. In summary, you can make a motion to amend the budget as it applies to operations and the assessment. Any changes to the budget are then transferred to the homeowners. What you may not adjust is the fees that the Boat Storage folks pay as that is considered an individual assessment and that role lays strictly with the Board of Directors. Their are 2 functions that the Board has authority over and that is fines and dues for members that use the amenities within the separate classification. The Boat storage revenue is reflected on the budget in a effort to have disclosure, but this cannot be changed by a homeowner."
We asked for clarification on this but none was forth coming.
These are the clauses from our bylaws that govern budget proposals and approvals:
Section 2. Budget. The Board of Directors shall prepare and submit, or cause to be prepared and submitted, to the Members at their annual meeting a proposed budget for the Association for the fiscal year. The proposed budget shall set forth with particularity the anticipated common expenses for the fiscal year and the amount of money needed to establish reasonable reserves for the payment of common expenses and contingencies.
Section 3. Approval of Budget. The proposed budget, as it may be amended upon motion by any Member, shall be submitted to a vote of the Members and when approved shall become the budget (Budget) of the Association for the fiscal year. The terms of the Budget shall be binding upon the Board of Directors unless and until such terms are amended by action of the Members.
Does their reasoning make sense? Can they disallow a line item amendment?
Their argument for not allowing the line item amendment is based on a similar incident from last year where we tried to amend a budget line item. We were told then that we are not allowed to change the line items, only the bottom line per this email:
"An Attorney that represents 100's of Associations in multiple states has reviewed our Covenants and By Laws about amending the Budget. In summary, you can make a motion to amend the budget as it applies to operations and the assessment. Any changes to the budget are then transferred to the homeowners. What you may not adjust is the fees that the Boat Storage folks pay as that is considered an individual assessment and that role lays strictly with the Board of Directors. Their are 2 functions that the Board has authority over and that is fines and dues for members that use the amenities within the separate classification. The Boat storage revenue is reflected on the budget in a effort to have disclosure, but this cannot be changed by a homeowner."
We asked for clarification on this but none was forth coming.
These are the clauses from our bylaws that govern budget proposals and approvals:
Section 2. Budget. The Board of Directors shall prepare and submit, or cause to be prepared and submitted, to the Members at their annual meeting a proposed budget for the Association for the fiscal year. The proposed budget shall set forth with particularity the anticipated common expenses for the fiscal year and the amount of money needed to establish reasonable reserves for the payment of common expenses and contingencies.
Section 3. Approval of Budget. The proposed budget, as it may be amended upon motion by any Member, shall be submitted to a vote of the Members and when approved shall become the budget (Budget) of the Association for the fiscal year. The terms of the Budget shall be binding upon the Board of Directors unless and until such terms are amended by action of the Members.
Does their reasoning make sense? Can they disallow a line item amendment?