Using HOA dues to repair Private Property

I just received notice that our HOA is going to use dues collected to maintain the common areas to repair sidewalks on owner's private property. This is in Louisiana and it seems to me this is a misuse of HOA funds?

Mike,

It may or may not be the HOA's responsibility to repair.

What do your covenants say about sidewalks?

Tim

They say "No part of the net earnings of the Corporation shall inure to the benefit of any member or other person."

The sidewalks are on private property of each lot owner.

But, does it say that the Association shall maintain sidewalks?

Has the Association repaired sidewalks in the past?

Have you asked the board by what authority are they repairing the sidewalks (ask nicely if you haven't)?

A lot more.

Sidewalks may be situated on private property but it's clearly under an easement (real or implied) and the sidewalk is for the benefit and safety of the entire community. I would argue that if the HOA is consistent with its sidewalk repair policies, across properties, and the HOA board controls the timing and approval off all sidewalk repairs, then HOA funds can support it.

If, in the rare case, this sidewalk was installed as a private investment and community members do not have access and are discouraged from trespassing by using the sidewalk, then HOA funds should not be expended on maintenance.

Summary: Yes, the sidewalk is on private property but as a common element. The property underneath the sidewalk is private. The cement on top of the private property is the repair responsibility of HOA as a common amenity.

That statement ("No part of the net earnings...") is irrelevant for this. That statement just means that the HOA can't pay out "profits" to any owner or anyone else, such as by paying a dividend; it's a nonprofit.

An HOA Board is to make decisions "in the interest of the Corporation" on how to maintain the common areas. Sidewalks are always a strange issue as to who owns and maintains them be it city, owner, or HOA.

Who owns the sidewalk in question, that is who actually per most city laws who has the responsibility to fix them, in a lot of cases land plots start measuring from the rear of sidewalks, sidewalks are in many cases enforced by police and HOAS if you block them, but this is not your complaint. But because of the aforementioned and utility easements etc. One could make a case that in fact they may not be the owner of a particular sidewalk.

I believe your complaint is simply you do not agree the HOA starting expensive practice of maintaining everyone's sidewalks, and your legal argument is that the HOA is misusing funds? You can certainly make any complaint or argument you want, it is not a terrible argument in my opinion if any apply:

1. The HOA has no history of doing this as someone stated, and the expense and practice could create a financial hardship on the HOA now or in the future.
2. The city states the sidewalks are owned and to be maintained by the property owner.
3. The developer made the sidewalks and donated them to to the owners and not public use in the CCR's.
4. The sidewalks in question are not considered a common area to the HOA, for which they would have a responsibility to maintain common areas.

O.K. in my opinion since sidewalks are public use, common areas owned by the home owner that every party that everyone has a responsibility to maintain them, but they can be very expensive, so I understand your concern. This is why many city's at the beginning of every year will sometimes have sidewalk grant money that you or the HOA can apply for, but the money is limited and runs out very quickly. Certainly though free sidewalk money is something everyone should consider.

Also in my opinion if an HOA has sidewalks in disrepair everywhere the value of the property is effected and the BOD has decided to spend the money to fix the sidewalks for the Homeowners and their children to have better enjoyment of the neighborhood, which helps with aesthetics of the neighborhood and property values. Thus again in my opinion the BOD has acted in the interest of the Corporation and the members, so probably not a complaint that a jury would side with you on, but other member's might side with you if the sidewalks are bad and the expense will burden the HOA. There should be some cost sharing here I believe this is how most city grants work and the HOA could take the same approach to better conserve funds and fix more sidewalks.

(In the above I am referring only to sidewalks in the front of an owner's property, placed their by the developer not the HOA.)

GeorgeS21,

You make me laugh, as you are asking about a hypothetical crack of a sidewalk in the future, right?

In your hypothetical question I can only say the owners pay!

Either way, the owners of the lots, are also the members of the HOA who own and fund the HOA corporation. So either way the owners are paying to fix future sidewalk damages. In your case I do not think it matters, but you have plenty of time to write this fear of yours into the CCR'S and By-laws. As to the owner's wishes.

With that many sidewalks you may want to convince the owners, to put sidewalk repairs on each individual lot owner, and if you can donate those roads drainage etc. to the City if possible. Just my opinion, but I live in an older neighborhood almost as large, and the sidewalks are a major issue now, and they are the lot owners responsibility and rarely will a lot owner fix their sidewalk. Something to keep in mind.

Streets and curbs are owned by the HOA. City has no jurisdiction .

Mike,

If the board admits that repairing the sidewalk with HOA funds is improper, what did they say when you asked why they are doing it?

Have you reviewed copies of past minutes for board meetings to see why this is happening?

Do LA statutes say they must be?

However, you can review them if you request.

Read your governing documents and applicable statutes.

Typically, Associations are incorporated.
If incorporated, they must comply with Corporate statutes as well as property statutes.

The right of inspection is typically identified within corporate statutes:

LA Rev Stat § 12:1-1602

§1-1602. Inspection of records by shareholders

A. A shareholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in R.S. 12:1-1601(E) if the shareholder gives the corporation a signed written notice of the shareholder's demand at least five business days before the date on which the shareholder wishes to inspect and copy.

LA Rev Stat § 12:1-1601

PART 16. RECORDS AND REPORTS

SUBPART A. RECORDS

§1-1601. Corporate records

A. A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

Tim,

Yep, that is my assessment, as well ... the reason you see me asking the same question each time - attempting to motivate HOA/COA/POA members to do their own initial work - some do, some are just looking for easy answers here, and some are looking for answers that agree with their intents :-)

You said the streets and curbs are owned by the HOA, but still haven't said whether the sidewalks are also HOA responsibility - I suspect part of all of them could be, and that would explain why the HOA is using assessments to pay to repair them. Nor have you said if this is a repair to the sidewalk at one house or all of them, and that could make a difference.

Go back to your documents and perhaps the last few months of board meeting minutes. Your documents may state you have a right to take a look at the minutes, so be sure to cite that section in your request. While you're at it, ask for a copy of your association budget and look for a line item for street/sidewalk maintenance - that could be where the money's coming from.

Until you answer some of the questions others have bought up, it's unlikely you'll get a thoughtful answer, let alone suggestions on how to address this if the board is using money inappropriately. You may not like what you hear, but that doesn't mean the answer's wrong.

The Board minuets are not published, as I've said before. I know where the money is coming from, it is coming from the strategic reserve maintained for common area maintenance.

Still not clear on the location of the sidewalk or how they got damaged. Can see how it is HOA's responsibility. A HOA is ONLY funded by it's members for it's members. So if this is part of common area/property then HOA can pay for it. Don't see the problem.

Your assumptions couldn't be more wrong. I first moved in to a development with an HOA in 1998 and have lived in this one since 2007. I am also an officer on another HOA board where we have a second home in a neighboring city. The difference is this HOA has a 6 page booklet which contains both the Charter and the Bylaws. The HOA where I am on the Board in a different city has Bylaws that are 20 legal pages single spaced and the original charter is hundreds of pages.

Please don't treat me as an idiot.

Ouch. (I am sitting here weighing the relative pros and cons of each, from the undesirability of rubbing elbows with Washington DC programmed folk to the undesirability of sweating instantly upon leaving one's home for three seasons of the year in Louisiana.)

Both states do still have HOA/Condo and nonprofit corporation statutes

Your welcome for the nothing. It was exactly what you gave us as well...

Mike, thanks for the info.

My suggestion, dig up your sidewalk repair receipt and send it to the board. Specify you are only asking to be reimbursed for repairs that the board is doing for others.

Well that certainly changes things quite a bit!

Based on Mikes recent posting, lets go over the options available:

1) Have an attorney write a letter to the board pointing out the legalities and see if they change course
2) Raise the issue with members, gather support, volunteers and vote the board out.
3) Start a legal case against the board.

Realistically, these are the only options I can see.
Are there others?

Keep in mind that Mike has already raised the issue with the board himself and they board is not changing course, so that option is out.