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WalterH4 (Indiana)
Posts: 145
Posted:
Our covenants mandate acceptable lawn care (including treatment of weeds). However, this has never been enforced for years, as about 1/3rd of yards have considerable dandelions. A few have TONS. and only about 1/3rd are fairly dandelion free.

Since folks are often too busy to take care of this, we're looking for a way that might enable our HOA to become mostly dandelion-free, in an acceptable manner.

Ideas:
1. Send offenders a notice, giving them 4 choices:
a. Permit us to have a low-cost contractor take care of it for $20-$50 fee. This is done by responding "yes, you can do this". OR
b. Or, they can take care of it within 7 days, OR
c. Or, they can just accept a fine of about half that, and handle it themselves, OR
d. Or, if they don't respond and don't take care of it, then we have a contract come in for at least twice the price (hazard pay for working on lawn without friendly permission from the owner).

In all above scenarios, the added fee is just added onto their dues for the next calendar year.

Of course, we'd only do this is super-majority of neighborhood supported it, and only after first sending them a notice.

Here again, we are considering ways of contracting this out:
1. Could be a community volunteers whose compensation is the forgiveness of HOA dues.
2. Or a few volunteers on 1099's and insured - who will do it for lower-than-normal contractor costs.

Thoughts?
SheliaH (Indiana)
Posts: 6,964
Posted:
I gave you my opinion on forgiving HOA fees in exchange for homeowners doing lawn work, and I believe the other poster also noted it wasn't a good idea. Whatever you choose to do, this is NOT a decent option, so stop thinking about that.

Regarding the dandelions and weed control, if the CCRs say lawn care is the homeowner's responsibility, people need to find a way to comply. I think you had a previous conversation somewhere where you said the board wasn't making a huge deal out of some CCR violations because most of the homeowners balked at that, for whatever reason. That could be why you're now having issues like this - everyone has 24 hours in a day and choose to spend time and money on the stuff that really matters to them, so if they don't have the time or desire to do it themselves, why haven't they hire someone themselves to do it? Besides dandelions looking really tacky, they can cause issues for people who have respiratory issues and severe allergies.

CCR compliance is something HOA boards do, so you and your colleagues need to be the adults in the room and start enforcing them. It's ok to set priorities as to what's more important (e.g. you might have a bigger issue with dog poop). However, you also have to accept that some people will balk regardless because they think rules apply to everyone but them.

With that, I say option B is the best - you can extend it to 10 days, since people are just now starting to venture to the hardware stores for lawn and garden stuff, which can be tricky with this pandemic. If nothing's done after 10 days, start the fines. I'd also remind them that if the grass gets too high, that may be a city or county violation - if THEY send a notice, it's ignored and then they have to come out and mow it, this could lead to a lien if they don't pay the fines. Let them know the board will also file that complaint if necessary.

You could also talk to a contractor about doing the work - homeowners would have to pay for it themselves AND schedule the work, but the contractor could offer some sort of a discount if X number sign up for services by a certain date (let the contractor decide how to handle request for edging, grub control and what not). Those are the choices - do it themselves, have someone do it for them or....pay a fine (and still be required to get it done).

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
LetA (Nevada)
Posts: 2,679
Posted:
You would need to amend your CC&R's to say that the HOA would be responsible for front of yard maintenance, then watch your assessments increase significantly.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By WalterH4 on 04/08/2020 8:38 AM

1. Could be a community volunteers whose compensation is the forgiveness of HOA dues.

If you want to compensate owners for work, pay them. The CCRs probably define that assessment/dues obligations are to be divided equally. It probably won't happen, but an unhappy owner could sue and potentially prevail over waiving dues.

Escaped former treasurer and director of a self managed association.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Quote:
Posted By DouglasK1 on 04/08/2020 12:16 PM

... The CCRs probably define that assessment/dues obligations are to be divided equally. It probably won't happen, but an unhappy owner could sue and potentially prevail over waiving dues.


Exactly. Waiving the assessment is unlawful, period. And if you think it's no big deal, keep in mind that many/most D&O policies have language that exempts deliberate misconduct from coverage.
KerryL1 (California)
Posts: 14,550
Posted:
Good point about D&O insurance, Cathy.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
Dandelions ....

Sigh.
WalterH4 (Indiana)
Posts: 145
Posted:
Thanks for the feedback. OK - we'll forego Dues forgiveness as compensation, but that's a shame it can't be done, as it much more financially favorable (i.e. save 32% taxes!).
WalterH4 (Indiana)
Posts: 145
Posted:
Thanks for the feedback. OK - we'll forego Dues forgiveness as compensation, but that's a shame it can't be done, as it much more financially favorable (i.e. save 32% taxes!).
MelissaP1 (Alabama)
Posts: 13,836
Posted:
We pay for a weed control company to control our weeds. They come out a few times a year. Can add that to your HOA budget. It falls under lawncare expenses. Our HOA is ONLY responsible for lawncare and weed control is part of it.

Why why why do you think dues forgiveness is any good idea? How in the world does it save taxes??? It's the worst idea ever. Your HOA is ONLY funded by dues. Less dues, less money in your budget... Do simple math much?

Former HOA President
WalterH4 (Indiana)
Posts: 145
Posted:
The idea is that dues forgiveness would be tax free -- invisible to the IRS.

Just as if you volunteer at a special event that costs money for entrance, after your are done with your 1-2 hour shift, you gain free entrance to the event (e.g. did this for a wine tasting event). So volunteer, then don't have to pay $20 for admission. It's a perk -- non-taxable.

Similarly was thinking Dues forgiveness could be done similarly. You helped HOA avoid a maintenance cost, and so you don't have to pay your dues.

Otherwise, if we just paid them $250 on a 1099 -- they'd then have to file it as income, and pay 15.5% FICA, 12% federal, and 5% state taxes -- and if on ACA with subsidy, may owe another 9% in reduced ACA subsidy. Overall taxation could be 32.5% up to 41.5%. And so out of $250, they'd only keep about $160-$180. $70 would be absorbed into taxes.

So really not sure why someone would have to pay taxes on costs avoided.

No matter -- the suggestion alone seems to have set of an allergic reaction here. It's not worth it to take this risk, so we won't.

MelissaP1 - would you like to retract your insult on my math? Math is a specialty of mine. Perhaps, it's because of a misunderstanding about the nature of forgiveness... I'm hearing that technically you have to tax the forgiveness? I don't see it. The Wine Testing event that happens every year does this -- without taxing the benefit. When employees get an "employee discount" or "free food" -- that is not taxed. Or maybe tax laws have changed in recent years, and I'm not privy to it.

WalterH4 (Indiana)
Posts: 145
Posted:
I do KNOW that debt forgiveness is taxed-- but that is for good unavoidable reason. For actual debts, you INCURRED A COST -- e.g. you used a credit card to purchase something.... and so in a way received this direct income. And so forgiveness of credit card debt is taxed.

However, if you owe $10,000 to a hospital, and they cut you a deal where you can pay it off as $5,000 lump sum, and they forgive the rest. THIS IS NEVER TAXABLE. It was services rendered, but never ever paid for.

If however, you PAID $10,000 to hospital using a Credit Card -- and then the Credit Card company forgave you $5,000 -- this is taxable, because it's on money given and spent.

===
I believe that if you permit a volunteer to have "free admission" (skip the normal fees) -- this too is non-taxable. As no money was ever spent. They gave the HOA no money, and the HOA gave them no money.

Before you judge, be sure know what you are talking about. Perhaps I'm wrong; but it's a grey area at minimum.

No matter-- as I said, we won't try this, because EVERYONE here says it's a dumb idea. And so it probably is a dumb idea, and not worth the risk of opening a can of worms.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Ah if it only worked that way in a HOA's budget. It doesn't... Lots to learn...

Former HOA President
SheliaH (Indiana)
Posts: 6,964
Posted:
I just remembered something else - there is case law in Indiana that says HOW's can't assess fines because they aren't government agencies. As far as I know there's no update to the HOA law in this state that allows this. If your association attorney has found some sort of workaround that'll stand up in court, have at it. Otherwise, you risk someone suing the association and winning.

That may mean the only way you can compel homeowners to cooperate is to go after them in small claims court, which can be quite cumbersome, depending on how many homeowners didn't comply.

So I'll amend my response a bit - go ahead and send the letters and be sure to include appeal rights. You may have no choice but to do the work and add a line item to the budget, along with the assessment increases. If people squawk, tell them they either start taking care care of their lawns or pay for someone to do via an increase in assessments. There are consequences for everything we do - time for your board to remind the homeowners of their legal obligations.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
GenoS (Florida)
Posts: 4,276
Posted:
Quote:
Posted By WalterH4 on 04/08/2020 8:38 AM

Here again, we are considering ways of contracting this out:
1. Could be a community volunteers whose compensation is the forgiveness of HOA dues.

Absolutely not. What is it with you and your fondness for really bad ideas? There are many places online where you can find out whether or not this is a good idea. You'll find a thousand sites that say it's a bad idea and yet you persist in coming here to spitball your bad idea and, what.... hope someone will agree with you?
WalterH4 (Indiana)
Posts: 145
Posted:
GenoS - this is why I put it forth here. Y'all know the conventions for HOA's. Based on unanimous rejection here on this site, I've already agreed to drop that proposal. I only thought of it to achieve an effective +40% gain on virtual compensation for work done by HOA members. (e.g. $170 forgiven equates to about $250 paid on a 1099; money then stretches 50% further via "cost avoidance" mechanism - money never spent, and never collected -- accounting wise this works out fine; but that still doesn't mean it's a good idea; but you see the motivation for testing out this idea, right?)
GeorgeS21 (Florida)
Posts: 3,808
Posted:
I would recommend:

- pay your taxes - it is much like an HOA assessment - make others pay their taxes
WalterH4 (Indiana)
Posts: 145
Posted:
Quote:
Posted By SheliaH on 04/08/2020 6:55 PM
I just remembered something else - there is case law in Indiana that says HOW's can't assess fines because they aren't government agencies. As far as I know there's no update to the HOA law in this state that allows this. If your association attorney has found some sort of workaround that'll stand up in court, have at it. Otherwise, you risk someone suing the association and winning.

That may mean the only way you can compel homeowners to cooperate is to go after them in small claims court, which can be quite cumbersome, depending on how many homeowners didn't comply.

So I'll amend my response a bit - go ahead and send the letters and be sure to include appeal rights. You may have no choice but to do the work and add a line item to the budget, along with the assessment increases. If people squawk, tell them they either start taking care care of their lawns or pay for someone to do via an increase in assessments. There are consequences for everything we do - time for your board to remind the homeowners of their legal obligations.

Sheila, I'm very interested to learn more about this case law against fines. If you can help me find this online, I would really appreciate it. We don't yet have a HOA attorney to ask this question.

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