SheilaH5 (Florida)
Posts: 12
Posts: 12
Posted:
Can the Board sign a contract to increase the the size of the clubhouse and move interior walls without a vote from the community?
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TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Probably.
However, you will need to check your governing documents to be sure.
However, you will need to check your governing documents to be sure.
DavidG45 (Delaware)
Posts: 994
Posts: 994
Posted:
Quote:
Posted By SheilaH5 on 07/06/2022 7:28 AM
Can the Board sign a contract to increase the the size of the clubhouse and move interior walls without a vote from the community?
Can the Board sign a contract to increase the the size of the clubhouse and move interior walls without a vote from the community?
I would think another question is whether or not the impending expense is in the budget.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Shelia
If the work fall under maintenance, no owner approval is required.
If the work fall under maintenance, no owner approval is required.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
I agree with Thad. Increasing the size of the clubhouse is a capital improvement that will increase reserve requirements as well as operating expenses. It requires homeowner approval. Moving a wall is questionable - it may depend on why it's being moved, but I'd still say homeowner vote is required.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Quote:
Posted By CathyA3 on 07/06/2022 9:03 AM
I agree with Thad. Increasing the size of the clubhouse is a capital improvement that will increase reserve requirements as well as operating expenses. It requires homeowner approval. Moving a wall is questionable - it may depend on why it's being moved, but I'd still say homeowner vote is required.
I agree with Thad. Increasing the size of the clubhouse is a capital improvement that will increase reserve requirements as well as operating expenses. It requires homeowner approval. Moving a wall is questionable - it may depend on why it's being moved, but I'd still say homeowner vote is required.
It may require homeowner approval.
This will depend on the wording in the OPs governing documents and any applicable State statutes.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Please note, I say may because most governing documents give full authority over common areas and common elements to the Board.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Agree with Cathy that a capital improvement might need a vote of the owners. But it depends. Our CC&Rs say that 2/3 of owners would have to vote to approve a "capital improvement" if it would cost 5% of more of our ann. gross budget. So, what do yours say, Sheila? There also might be sate statute limitations on such an expenditure.
Moving a wall, though, might be embedded in your reserve study. We have a component called Social Lounge --Remodel," which means we should have funds in reserves to make major alterations within the Lounge. That would need no owner vote. So, review your reserve study.
Moving a wall, though, might be embedded in your reserve study. We have a component called Social Lounge --Remodel," which means we should have funds in reserves to make major alterations within the Lounge. That would need no owner vote. So, review your reserve study.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Question? Is this adding more to the clubhouse or is it moving an inside wall? Inside wall does not add space.
Former HOA President
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
Kerry,
I agree with your first paragraph completely.
Not sure I understand the second paragraph. Typically, reserve accounts are created to maintain existing items so not sure a remodel would fit that item. I think increasing the size of the space would more than likely be deemed a Capitol Improvement. That being said if Funds are used out of the Reserves, they better be very careful. I have always been told that Funds borrowed from Reserves must have a specific pay back in 12 months or less.
I agree with your first paragraph completely.
Not sure I understand the second paragraph. Typically, reserve accounts are created to maintain existing items so not sure a remodel would fit that item. I think increasing the size of the space would more than likely be deemed a Capitol Improvement. That being said if Funds are used out of the Reserves, they better be very careful. I have always been told that Funds borrowed from Reserves must have a specific pay back in 12 months or less.
SheilaH5 (Florida)
Posts: 12
Posts: 12
Posted:
Our bylaws state âThe Association, by action of its Board, may make alterations and improvements to the Association Property having a cost not in excess of FIFTEEN THOUSAND DOLLARS. All other alterations and improvements, must first be approved by at least two-thirds (2/3 of all eligible voting interest represented in person or by proxy at a meeting called and held in accordance with the Bylawsâ
They did take money out of what they call âClubroomâ and special projects, however, the Board stated one amount, but if you add everything up including consults, drawings and cad renderings, you come up with double the amount.
The first vote failed. The majority does not want the clubhouse expanded or walls moved. The put out another survey, which doesnât really give you a chance to say no to this or yes to that. With them, itâs all or nothing.
I would like to know about the legalities of signing a contract before the vote.
Thanks for all your help.
They did take money out of what they call âClubroomâ and special projects, however, the Board stated one amount, but if you add everything up including consults, drawings and cad renderings, you come up with double the amount.
The first vote failed. The majority does not want the clubhouse expanded or walls moved. The put out another survey, which doesnât really give you a chance to say no to this or yes to that. With them, itâs all or nothing.
I would like to know about the legalities of signing a contract before the vote.
Thanks for all your help.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
My governing documents give full authority to the board with no membership approval required.
That said, a special assessment (if needed to pay for the expansion) would require membership approval.
That said, a special assessment (if needed to pay for the expansion) would require membership approval.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Our certified reserve specialist in a national firm has several components in our study that distinguish between basically "refurbishing" a common area room and "remodeling" it. The former includes replacing carpeting & furniture, the latter going almost to the studs: replacing everything including, say, counters, cabinets, light fixtures and other items.
Example: many years ago we had our condo residential corridors "refurbished"; the carpeting and wall coverings were replace. At this moment, they're being remodeled: Not only carpeting/wallcovering, but new doors, lights fixtures next to doors & in ceilings, exit signs, doorbells, address plates at each unit, emergency info at elevators, etc. (200+ Units; 21 y.o.)
Maybe Sheila can tell us whether the interior wall would be moved whether or not the sf was expanded. It's not clear to me that one depends on the other.
Did the Board follow voting procedures in your Bylaws and for FL, Sheila? The second board attempt does not sound like an actual vote at all, but a "survey?" Based on what you've told us, I'd say the board may not sign a contract for a project for which the total exceeds $15,000 without a legitimate vote by owners.
I think you and a group of Owners might unite and all chip in to get the advice of an HOA attorney,
Example: many years ago we had our condo residential corridors "refurbished"; the carpeting and wall coverings were replace. At this moment, they're being remodeled: Not only carpeting/wallcovering, but new doors, lights fixtures next to doors & in ceilings, exit signs, doorbells, address plates at each unit, emergency info at elevators, etc. (200+ Units; 21 y.o.)
Maybe Sheila can tell us whether the interior wall would be moved whether or not the sf was expanded. It's not clear to me that one depends on the other.
Did the Board follow voting procedures in your Bylaws and for FL, Sheila? The second board attempt does not sound like an actual vote at all, but a "survey?" Based on what you've told us, I'd say the board may not sign a contract for a project for which the total exceeds $15,000 without a legitimate vote by owners.
I think you and a group of Owners might unite and all chip in to get the advice of an HOA attorney,
KellyM3 (North Carolina)
Posts: 2,239
Posts: 2,239
Posted:
Yes, the board of directors can authorize the project you've described.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
I must be reading Sheila's doc wrong, kelly? It looks like it says owners must vote if over $15,000 of an improvement. Assuming her CC&R define "improvement" the way ours do, they want to add an improvement.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Quote:
Posted By SheilaH5 on 07/06/2022 10:19 AM
Our bylaws state âThe Association, by action of its Board, may make alterations and improvements to the Association Property having a cost not in excess of FIFTEEN THOUSAND DOLLARS. All other alterations and improvements, must first be approved by at least two-thirds (2/3 of all eligible voting interest represented in person or by proxy at a meeting called and held in accordance with the Bylawsâ
They did take money out of what they call âClubroomâ and special projects, however, the Board stated one amount, but if you add everything up including consults, drawings and cad renderings, you come up with double the amount.
The first vote failed. The majority does not want the clubhouse expanded or walls moved. The put out another survey, which doesnât really give you a chance to say no to this or yes to that. With them, itâs all or nothing.
I would like to know about the legalities of signing a contract before the vote.
Thanks for all your help.
Our bylaws state âThe Association, by action of its Board, may make alterations and improvements to the Association Property having a cost not in excess of FIFTEEN THOUSAND DOLLARS. All other alterations and improvements, must first be approved by at least two-thirds (2/3 of all eligible voting interest represented in person or by proxy at a meeting called and held in accordance with the Bylawsâ
They did take money out of what they call âClubroomâ and special projects, however, the Board stated one amount, but if you add everything up including consults, drawings and cad renderings, you come up with double the amount.
The first vote failed. The majority does not want the clubhouse expanded or walls moved. The put out another survey, which doesnât really give you a chance to say no to this or yes to that. With them, itâs all or nothing.
I would like to know about the legalities of signing a contract before the vote.
Thanks for all your help.
Regardless of the legalities, the reality is:
1) Unless a member brings legal action against the board for failing to comply with the governing documents (i.e. a vote), the board will be able to do what they want.
2) The fact that the contract was signed in good faith by the contractor would mean that if a legal action was successful and the board had to back down, the contractor could bring legal action to be paid based on the terms of the contract. They would likely win for any materials purchased that could not be returned and any labor put into the project. Perhaps damages for the board acting in bad faith.
The Board would use association funds to defend itself.
The Association would need to use funds to defend any action brought by the contractor.
The individual member, or members, who bring the legal action will need to pay their legal bills, plus their share of the Associations costs.
My advice, talk to an attorney and see what it would cost to get an injunction on the contract along with other options.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
So, Sheila, has the Board approved the contract with its vote and and a qualified officer has signed it. Or not?
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
There would be many ways to stay within the $15K. As an example carpeting for the expanded building might be $3K but if the existing carpeting need replacement alone, that might have cost say $2k so only the extra $1K falls within "improvements". The $2k falls under Reserves. I can see many are not familiar with how budgeting works as in there are several ways to skin a cat.
SheilaH5 (Florida)
Posts: 12
Posts: 12
Posted:
We have 696 homes They want each house to pay 4,636.00. The problem is that most homeowners what the Clubhouse done but they don't want walls moved or an expansion.
This is the second survey they put out. It reads like "take it or leave it", "all or nothing".
As I stated, the first vote was no. This will come up for a another vote, and I'm pretty sure it will be no.
Since they already signed the contract with the design firm and the architect, they also included "options" for other thing that have a yes or no vote.
This would cost the homeowner another 1,969.00. I believe they added this because of the contract they signed before the vote.
This whole thing is very complicated. This this is a 55 and older community. The President is in his early 60s, worked in Albany NY and was a politician.
He and his wife refer to the older residents as Neanderthals. He just wants what he wants.
Others wrote back that he has the right to sign the contract. But does he have the right to sign for this amount of money before a vote of the community?
This is the second survey they put out. It reads like "take it or leave it", "all or nothing".
As I stated, the first vote was no. This will come up for a another vote, and I'm pretty sure it will be no.
Since they already signed the contract with the design firm and the architect, they also included "options" for other thing that have a yes or no vote.
This would cost the homeowner another 1,969.00. I believe they added this because of the contract they signed before the vote.
This whole thing is very complicated. This this is a 55 and older community. The President is in his early 60s, worked in Albany NY and was a politician.
He and his wife refer to the older residents as Neanderthals. He just wants what he wants.
Others wrote back that he has the right to sign the contract. But does he have the right to sign for this amount of money before a vote of the community?
DavidG45 (Delaware)
Posts: 994
Posts: 994
Posted:
Quote:
Posted By SheilaH5 on 07/07/2022 7:06 AM
We have 696 homes They want each house to pay 4,636.00. The problem is that most homeowners what the Clubhouse done but they don't want walls moved or an expansion.
This is the second survey they put out. It reads like "take it or leave it", "all or nothing".
As I stated, the first vote was no. This will come up for a another vote, and I'm pretty sure it will be no.
Since they already signed the contract with the design firm and the architect, they also included "options" for other thing that have a yes or no vote.
This would cost the homeowner another 1,969.00. I believe they added this because of the contract they signed before the vote.
This whole thing is very complicated. This this is a 55 and older community. The President is in his early 60s, worked in Albany NY and was a politician.
He and his wife refer to the older residents as Neanderthals. He just wants what he wants.
Others wrote back that he has the right to sign the contract. But does he have the right to sign for this amount of money before a vote of the community?
We have 696 homes They want each house to pay 4,636.00. The problem is that most homeowners what the Clubhouse done but they don't want walls moved or an expansion.
This is the second survey they put out. It reads like "take it or leave it", "all or nothing".
As I stated, the first vote was no. This will come up for a another vote, and I'm pretty sure it will be no.
Since they already signed the contract with the design firm and the architect, they also included "options" for other thing that have a yes or no vote.
This would cost the homeowner another 1,969.00. I believe they added this because of the contract they signed before the vote.
This whole thing is very complicated. This this is a 55 and older community. The President is in his early 60s, worked in Albany NY and was a politician.
He and his wife refer to the older residents as Neanderthals. He just wants what he wants.
Others wrote back that he has the right to sign the contract. But does he have the right to sign for this amount of money before a vote of the community?
So, this is a $3,000,000 project?
If so, I go back to my first question; is this in the budget?
SheilaH5 (Florida)
Posts: 12
Posts: 12
Posted:
No, we have to pay out of pocket..
DavidG45 (Delaware)
Posts: 994
Posts: 994
Posted:
Quote:
Posted By SheilaH5 on 07/07/2022 7:44 AM
No, we have to pay out of pocket..
No, we have to pay out of pocket..
So the vote was for a special assessment? And it was voted down?
Yeah, I don't see how they can legally sign that contract. But as mentioned above, I suspect the only way to stop things is to get an attorney involved.
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