SheriS1 (Tennessee)
Posts: 21
Posts: 21
Posted:
I live in a HOA in TN. Our Board is under the impression that they can do things without members votes.
I realize that the overall responsibility of the President and the Board is to manage the common expenses for our community and to manage the common areas.
1. The Board has added Gutter Cleaning to the budget in the amount of $3000, with no vote. The president said he has every right to do that and because he doesn't want to clean his gutters. We own our land and are responsible for our own exterior maintenance.
2. The Board has allowed the Landscape committee to spend $24,000 in 2018 and now, June 2019 Financial's has $22,000 in new landscaping that was not voted on and there is a $8,000 budget for watering, so with the new landscaping the projected water bill will like be more in the $10,000 range.
I have tried to explain to the Board, what they should be doing and they ignore me. The community was once small (50 or 55 PUDS) but now by the end of 2020 we will be at 145 units. If someone could explain to me what these 2 sections of our CC&R's mean, I would really appreciate it.
My understanding is that what should be on the annual budget should be the common expenses, along with insurance and other mandatory community debt. (taxes, management company fee's, etc). Anything else would require is to vote on special projects for the community as far as Capitol Improvements go, and to make sure that our reserve funds are well funded. Once the budget is set and lets say a repair is needed to be done on the common property, then funds from the reserve would be used and in our case, the board has the right to spend up to $2000 without a member vote. If the repair is over $2000, we should be able to vote on it. At the end of the year, if the reserve fund is lower than that of the reserve impact study suggested amount for that account, we would need to include that in our next budget to replace those funds. Now for Capitol Improvements, like a big landscape plan that doe not fall under maintenance, but new plans by the Landscape Committee, ($22,000) this is something that would should budget for and put so much money to that account until the required funds are in there for the Capitol Improvements that the members have approved by votes. Once again, our board believes they have a right to do this with our votes.
ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS
Section 1. Creation of Lien and Personal Obligation of Assessments. Each Owner of a Lot by acceptance of a deed therefore, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association:
(a) Annual assessments or charges; and
(b) Special assessments for capital improvements, such assessments to be established and collected as hereinafter provided.
(c) The annual and special assessments, together with interest, costs, and reasonable attorneyâs fees, shall be a charge on the land and shall be a continuing lien upon the Lot against which the assessment is made. Each such assessment, together with interest, costs, and reasonable attorneyâs fees, shall also be the personal obligation of the Owner of the Lot at the time when the assessment became due. The personal obligation for delinquent assessments shall not pass to the respective successor(s) in title, unless expressly assumed by such successor(s).
Section 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety, and welfare of the residents in the development and for the improvements and maintenance of the Association Property situated within the Property, including, but not limited to, the costs of repairs, maintenance, replacements, additions, management, insurance maintained in accordance with the Association Bylaws, and the employment of bookkeepers, accountants, and attorneys to represent the Association when the need arises.
Section 3. Maximum Annual Assessment. The maximum annual assessment per Lot is payable in lump sum payments or installments, as the Members of the Association may establish:
(a) The Board of Directors may establish the annual assessments at an amount not in excess of the maximum set forth herein subject to the provisions of Sections 6 and 7 herein below.
(b) Each January 1 the maximum annual assessment may be increased at an amount at the previous yearâs rate plus growth established by the annual Consumer Price Index (CPI) without Member vote. Any increase above the prior yearâs rate that exceeds the previous year rate plus annual CPI increase shall be by a vote of the Members, with a majority (51%) affirmative vote of the Lot Owners as provided in Section 6 below.
Section 4. Replacement Reserves. The Association shall maintain in a separate bank account funds for Replacement Reserves to maintain, improve and preserve the Association Property. There can also be other one-time expenditures at the discretion of the Board of Directors, for events less than $2,000.00. For expenditures greater than $2,000.00, the expenditure must be approved by the simple majority of voting members. The Replacement Reserves shall be a part of and collected by the annual Association budget. The initial Replacement Reserves fund shall be established by the Autumn Walk Homeownersâ Association in an amount equal to two (2) months assessments allocated for each Lot and shall be collected from and transferred by the Autumn Walk Homeownersâ Association to the Replacement Reserves fund of the Association at the time of the closing of the sale of each Lot in the Property including resales.
Section 5. Special Assessments for Capital Improvements. Additionally, 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, an unexpected expense associated with the management or preservation of any portion of the Property or the cost of any construction, reconstruction, repair or replacement of any capital improvement upon the Association Property and/or the utility and drainage easements designated on the recorded Plat, including fixtures and personal property related thereto, provided that any such special assessment shall have the assent of two-thirds (2/3) of the Members/Lot Owners who vote and who vote in person or by proxy at a meeting duly called for this purpose. All special assessments shall be fixed at a uniform rate for all Lots and may be collected monthly. The Capital Improvement fund shall be maintained in a separate bank account in the name of the Association as the Capital Improvement Fund.
Section 6. Specific Notice and Quorum Requirements for Any Action Authorized Under Sections 3 and 5. Notice of any meeting called for the purposes of either increasing the maximum annual assessment or levying special assessments as authorized under Sections 3 or 5 herein above shall be given to each Member stating the date, time, place of the meeting, and purpose for which the meeting is called. Such notice shall be in writing by postal mail or by email. Such notice by postal mail shall be either mailed or delivered to each Member at such Memberâs address as it appears on the books of the Association not less than ten (10) days or more than thirty (30) days prior to the date set for such meeting. Proof of such mailing or delivery may be given by the written statement of the Secretary or other person giving the notice. Written waiver of notice of the meeting
may be given before, at, or after the meeting. At the meeting called, the presence of seventy percent (70%) of the Members/Lot Owners or of proxies or of emails entitled to vote and who wish to participate in such vote shall constitute a quorum for that meeting. Fifty-one percent (51%) of those attending, in person or by proxy, shall constitute a majority for the vote passage.
Section 7. Uniform Rate of Assessment. Both annual and special assessments must be fixed at the uniform rate for all Lots and may be collected on a monthly basis. Except that special assessments of a single Lot as provided herein shall be authorized and an obligation of that Lot Owner (example: damage to property by Owner assessment or attorney fee collection assessment).
I realize that the overall responsibility of the President and the Board is to manage the common expenses for our community and to manage the common areas.
1. The Board has added Gutter Cleaning to the budget in the amount of $3000, with no vote. The president said he has every right to do that and because he doesn't want to clean his gutters. We own our land and are responsible for our own exterior maintenance.
2. The Board has allowed the Landscape committee to spend $24,000 in 2018 and now, June 2019 Financial's has $22,000 in new landscaping that was not voted on and there is a $8,000 budget for watering, so with the new landscaping the projected water bill will like be more in the $10,000 range.
I have tried to explain to the Board, what they should be doing and they ignore me. The community was once small (50 or 55 PUDS) but now by the end of 2020 we will be at 145 units. If someone could explain to me what these 2 sections of our CC&R's mean, I would really appreciate it.
My understanding is that what should be on the annual budget should be the common expenses, along with insurance and other mandatory community debt. (taxes, management company fee's, etc). Anything else would require is to vote on special projects for the community as far as Capitol Improvements go, and to make sure that our reserve funds are well funded. Once the budget is set and lets say a repair is needed to be done on the common property, then funds from the reserve would be used and in our case, the board has the right to spend up to $2000 without a member vote. If the repair is over $2000, we should be able to vote on it. At the end of the year, if the reserve fund is lower than that of the reserve impact study suggested amount for that account, we would need to include that in our next budget to replace those funds. Now for Capitol Improvements, like a big landscape plan that doe not fall under maintenance, but new plans by the Landscape Committee, ($22,000) this is something that would should budget for and put so much money to that account until the required funds are in there for the Capitol Improvements that the members have approved by votes. Once again, our board believes they have a right to do this with our votes.
ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS
Section 1. Creation of Lien and Personal Obligation of Assessments. Each Owner of a Lot by acceptance of a deed therefore, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association:
(a) Annual assessments or charges; and
(b) Special assessments for capital improvements, such assessments to be established and collected as hereinafter provided.
(c) The annual and special assessments, together with interest, costs, and reasonable attorneyâs fees, shall be a charge on the land and shall be a continuing lien upon the Lot against which the assessment is made. Each such assessment, together with interest, costs, and reasonable attorneyâs fees, shall also be the personal obligation of the Owner of the Lot at the time when the assessment became due. The personal obligation for delinquent assessments shall not pass to the respective successor(s) in title, unless expressly assumed by such successor(s).
Section 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety, and welfare of the residents in the development and for the improvements and maintenance of the Association Property situated within the Property, including, but not limited to, the costs of repairs, maintenance, replacements, additions, management, insurance maintained in accordance with the Association Bylaws, and the employment of bookkeepers, accountants, and attorneys to represent the Association when the need arises.
Section 3. Maximum Annual Assessment. The maximum annual assessment per Lot is payable in lump sum payments or installments, as the Members of the Association may establish:
(a) The Board of Directors may establish the annual assessments at an amount not in excess of the maximum set forth herein subject to the provisions of Sections 6 and 7 herein below.
(b) Each January 1 the maximum annual assessment may be increased at an amount at the previous yearâs rate plus growth established by the annual Consumer Price Index (CPI) without Member vote. Any increase above the prior yearâs rate that exceeds the previous year rate plus annual CPI increase shall be by a vote of the Members, with a majority (51%) affirmative vote of the Lot Owners as provided in Section 6 below.
Section 4. Replacement Reserves. The Association shall maintain in a separate bank account funds for Replacement Reserves to maintain, improve and preserve the Association Property. There can also be other one-time expenditures at the discretion of the Board of Directors, for events less than $2,000.00. For expenditures greater than $2,000.00, the expenditure must be approved by the simple majority of voting members. The Replacement Reserves shall be a part of and collected by the annual Association budget. The initial Replacement Reserves fund shall be established by the Autumn Walk Homeownersâ Association in an amount equal to two (2) months assessments allocated for each Lot and shall be collected from and transferred by the Autumn Walk Homeownersâ Association to the Replacement Reserves fund of the Association at the time of the closing of the sale of each Lot in the Property including resales.
Section 5. Special Assessments for Capital Improvements. Additionally, 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, an unexpected expense associated with the management or preservation of any portion of the Property or the cost of any construction, reconstruction, repair or replacement of any capital improvement upon the Association Property and/or the utility and drainage easements designated on the recorded Plat, including fixtures and personal property related thereto, provided that any such special assessment shall have the assent of two-thirds (2/3) of the Members/Lot Owners who vote and who vote in person or by proxy at a meeting duly called for this purpose. All special assessments shall be fixed at a uniform rate for all Lots and may be collected monthly. The Capital Improvement fund shall be maintained in a separate bank account in the name of the Association as the Capital Improvement Fund.
Section 6. Specific Notice and Quorum Requirements for Any Action Authorized Under Sections 3 and 5. Notice of any meeting called for the purposes of either increasing the maximum annual assessment or levying special assessments as authorized under Sections 3 or 5 herein above shall be given to each Member stating the date, time, place of the meeting, and purpose for which the meeting is called. Such notice shall be in writing by postal mail or by email. Such notice by postal mail shall be either mailed or delivered to each Member at such Memberâs address as it appears on the books of the Association not less than ten (10) days or more than thirty (30) days prior to the date set for such meeting. Proof of such mailing or delivery may be given by the written statement of the Secretary or other person giving the notice. Written waiver of notice of the meeting
may be given before, at, or after the meeting. At the meeting called, the presence of seventy percent (70%) of the Members/Lot Owners or of proxies or of emails entitled to vote and who wish to participate in such vote shall constitute a quorum for that meeting. Fifty-one percent (51%) of those attending, in person or by proxy, shall constitute a majority for the vote passage.
Section 7. Uniform Rate of Assessment. Both annual and special assessments must be fixed at the uniform rate for all Lots and may be collected on a monthly basis. Except that special assessments of a single Lot as provided herein shall be authorized and an obligation of that Lot Owner (example: damage to property by Owner assessment or attorney fee collection assessment).