The New Board Is Changing The CC&R's to Benefit themselves

Started by MikeR • 21 replies • 1605 views

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MikeR (Utah)
Posts: 68

Posted:

I live in a HOA of about 65 homes priced from about $700.000 to $1.2 million. We have no common areas to maintain and and for the last 12 years our dues has been $50 a year. During this 12 year period we have always had a board, some have tried to enforce the CC&R's with no success and the rest have refused because they didn't want to hurt some of the neighbors feelings. We have two groups in this neighborhood those that want to enforce and the ones that don't. Two years ago at our annual meeting we had an organized group move to eliminate the association, it seemed that there was a loop hole in our CC&R's that would allow this to happen. These people where the group most likely to break the rules. There seemed to be enough people at the meeting to keep the HOA intacted, but before the meeting was over we had some kind of unorganized, illegal election and this group took over as directors. The ageement at this time was that the CC&R's would be reviewed and the members would all have a chance to voice their opion through a survey. We havn't heard anything since that meeting and the other day I received a copy of all of the changes that our three officers made without membership input. We are suppossed to vote on it at our annual meeting in about three weeks. As I read the changes I can see that they have changed the rules now allowing themselves freedom and they have introduced new rules that seem to punish people that tried to enforce in the past.

Examples: Under the new rules we are all allowed to park as many cars (6-8) as will fit in our driveways day and night. We can park recrational vehicles in our driveway up to 7 days while preparing to use them. We can now have RV pads on our side or back yards as long as they are not more than 10' tall and are behind a 6' fence. We no longer can work from our homes as a business of any kind, even if you can't see it, hear it, or smell it.

My question is what is the best way to get this back on track?

SandraR1 (Utah)
Posts: 1

Posted:

I also live in Utah, Hurricane to be exact. At the moment we are in the process of dissolving ourt HOA. The advice I can offir is to read, and re read your Articles Of Inc. By-Laws and CC&R's. Walk the streets as I and other concerned members of our development have and take a vote, read your legals to see how many votes yoy need to change any articles,and in fact the board ccannot just change the rules. Although tht has been tried here as well.Do not depend on your attorney, they just collect your money and do almost nothing to resolve the problems. Someone MUST have a strong voice, that person needs to get a force together and get the upper hand.
Good luck.

DarleneL1 (Florida)
Posts: 97

Posted:

You might want to add your problems to the person asking should they have an HOA. It seems like I was a lone ranger when I mentioned that many HOA's BOD's don't work as they should, and there's no recourse. I sure hope Donna reads this!!

BrianB (California)
Posts: 2,820

Posted:

first thing is, make sure you have enough votes to deny the adoption of the new rules at the annual meeting

second thing, start replacing the board. Start a recall now, for example, of one member.

third thing, make sure you have enough votes to get ON the board at the annual meeting.

fourth thing, learn your by-laws in and out, and find evidence that the current board was incorrectly elected, and use that to force a correction.

MikeR (Utah)
Posts: 68

Posted:

Yes, The vote was out of control.... It was grab a piece of paper and vote for three people of your choice, with no control over who actually voted. We had husband and wife both voting, we even had two from one household vote and they don't own the home they live in. The bad news was that the attorney and property manager where both at the meeting. I think they didn't want to lose their jobs.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Mike,

Are you sure there are no common areas to maintain. The reason developers set up an HOA, and many cities require one, is to maintain the common areas. If you have none there is no reason to have an HOA. The individual property owner can enforce the CCRs w/o the presence of an HOA. This may be the best route to take. What is the $3,250/yr spent on?

If, on the other hand, you cannot or the majority of the members don't want to dissolve the HOA, then you need to make some changes starting with the BOD. Some suggestions:

1) Try to find individuals willing to run for a position
2) How about yourself?
3) At the next annual meeting ask to be on the election committee so you can ensure the voting is conducted properly.
4) Embark on a recall. But, you will need a good number of other interested members to help you -- one person can't do it alone. And you will need to have members willing to run for a seat on the BOD if the recall is successful.

KirkW1 (Texas)
Posts: 1,665

Posted:

As I see it, if you aren't going to bother with enforcement of the CC&Rs, then the HOA should disband in favor of a voluntary neighborhood association.

But as for the changes, check your documents on changing the CC&Rs. Most covenants require one of the following for ratification: 2/3rds of owners, 67% of owners, or 75% of owners. This should be in to form of a signature of the property ratifying the change. Most HOAs can not begin to pass this in a meeting. (And don't even think of going into proxy mode. People need to specifically approve the changes.)

SusanW1 (Michigan)
Posts: 5,202

Posted:

WHY do you have an attorney and a management company if there are no common areas to maintain and dues are $50 per year?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Mike,

Please tell us more about your association. Dues are $50.00 per year which is extremely inexpensive. What does that pay for? You state that there is no common property? Are you on a city or county street? Is there an entry or any planted area?

Do you have any architectural guidelines? Obviously there are protective covenants because of the parking in the driveway concerns. We need to know more about your association, rather than what the disfunctional people are doing for right now.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Mike, If you pay only $50.00 per year and there are 65 homes, that totals $3250 income. Then you said that both the attorney and property manager were both at the meeting. Holy cow, how much do they get paid and you still have operating cash?

Things seem to be derailed here and no one is in sure of who's on first. What is the attorney getting paid for? If it is advise to the HOA, he gets a failing grade.

MikeR (Utah)
Posts: 68

Posted:

This is is real HOA set up by the Developer and yes we do not have any common areas. I want to keep the HOA intact, but I want it to be run properly and I want To enforce any rule that will maintain the quality of a nice neighborhood.

The $50 dollars collected over time paid for high end street lighting this last spring. This was a project that I put into place as the president 6 years ago.

Our streets are maintained by the county and there is an entry monument that sits in a front yard.

Changes to the CC&R's takes 51% vote.

We have Architecual Guidelines.

The attorney was hired by me 6-7 years ago to look at our documents and advise me as to weather they where legal and binding. Of course he said they where and then two years ago during the annual meeting and take over he admitted they were not. The Manager was hired two years ago by the out going officers to enforce the CC&R's. No enforcement at all in the last two years. Both the attorney and and the Manager have been helping the prestent board prepare these new documnts. Can't wait to hear what this is going to cost us.

I'm concerned that they are going to get their group togeather and pull off these changes. I really want to stop it. I need some good advise on what to do.

Give me your best!

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By MikeR on 10/16/2008 7:54 PM
This is is real HOA set up by the Developer and yes we do not have any common areas. I want to keep the HOA intact, but I want it to be run properly and I want To enforce any rule that will maintain the quality of a nice neighborhood.

The $50 dollars collected over time paid for high end street lighting this last spring. This was a project that I put into place as the president 6 years ago.

Our streets are maintained by the county and there is an entry monument that sits in a front yard.

Changes to the CC&R's takes 51% vote.

We have Architecual Guidelines.

The attorney was hired by me 6-7 years ago to look at our documents and advise me as to weather they where legal and binding. Of course he said they where and then two years ago during the annual meeting and take over he admitted they were not. The Manager was hired two years ago by the out going officers to enforce the CC&R's. No enforcement at all in the last two years. Both the attorney and and the Manager have been helping the prestent board prepare these new documnts. Can't wait to hear what this is going to cost us.

I'm concerned that they are going to get their group togeather and pull off these changes. I really want to stop it. I need some good advise on what to do.

Give me your best!

Mike,

I curious to know why you instigated the street lighting project. With city streets, why would you want to put in your own street lights and assume that expense? And, for the record your DO have common areas -- the entry monument and the street lights are considered "common elements" or "common areas". These two things need to be maintained by the assn. Are there no landscaped areas that are owned or maintained by the assn? If so, these would also be regarded as common areas. Many people think common areas only means a swimming pool, tennis court, clubhouse, etc., but it really means anything the HOA is resp. for maintaining. Maint. of these common areas is the only reason for having an HOA.

I'm wondering if there is some ulterior motive to your objection to the potential CCR amendments. I'm under the impression you haven't even seen what the proposed changes might be, yet you are concerned they will be approved. However, if after this amendment has been written up and you object to the changes you will have the freedom to voice your objection. You will also have the freedom to convince your friends and neighbors that they should also object to them. The only way to ensure that they are not adopted is to get a majority (or whatever % it takes) of the members on your side and vote them down.

I'm curious to know what the attorney thought was illegal and not biding about the original CCRs. Even if the CCRs contained verbiage that was contrary to state law it doesn't mean they are illegal, but, of course those portions would not be binding. However, it's up to the BOD to be familiar with state law and know if this is the case and to enforce those provisions IAW the applicable state law. As far as CCRs being binding; there have been many, many court cases which uphold the CCRs as being legal and binding documents.

One final note: I find it quite interesting, in fact a bit mind-boggling, to hear that the assn can afford to pay a manager and an attorney with a yearly budget of only $3,250!! Not to mention the cost of elec for the street lights and perhaps watering for landscaping, insurance and other misc. expenses

MikeR (Utah)
Posts: 68

Posted:

We have no common areas. Trust me. The monument is placed by the Developer in a yard that became the property of the home owner we the home was purchased. For 11 years we went without street lights. We struck a deal with the city to pay for half of a lighting system that is much nicer than they normally use. They own and maintain them. We have nothing that we have to spend money on To date. Nothing.

As I said before the changes to the document have been submitted to each homeowner. If you go back and read what I said.

I don't want driveways full of cars. I don't want motor homes in side yards and back yards. I don't want boats in driveways all summer and I don't want to tell people that they can't work out of their homes. quitely

11 years of collecting fees has brought in over $36,000. The manager and leagl fees I'm sure are coming in.

What I need from this forum are some good suggestions on how to deal with these changes.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Mike,
We WILL try to give you some opinions to the best of our experiences.

First of all, you cannot do this yourself or without a majority of the other owners. Sometimes, a group of members who probably should not have bought into a deed restricted community, get themselves together and start causing havoc. This seems to be what you are dealing with now.

These proposed amendments are due to go before the membership for a vote in 3 weeks. How many other members are feeling like you do? If you want to insure that these proposals do not pass, THEY MUST BE VOTED DOWN OR "NO!" Do you have that support against them passing?

Are there provisions for removal of this Board in your Documents or in your State laws or Statutes? Get them removed. Where the heck is your lawyer who should know what the legal elections are supposed to be Apparently, the rogue Board got seated because the other members allowed this to happen, either up front or behind their backs.. Was it a legal election, I mean , done according to your Bylaws? There are many issues here and you must gather the members and take back control.

BUT MOST IMPORTANTLY, VOTE DOWN THE PROPOSED AMENDMENTS I hope that this helps a little. I cannot give you a majic wand, it will take your work to try and fix some of this.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By MikeR on 10/17/2008 9:34 AM
We have no common areas. Trust me. The monument is placed by the Developer in a yard that became the property of the home owner we the home was purchased. For 11 years we went without street lights. We struck a deal with the city to pay for half of a lighting system that is much nicer than they normally use. They own and maintain them. We have nothing that we have to spend money on To date. Nothing.

As I said before the changes to the document have been submitted to each homeowner. If you go back and read what I said.

I don't want driveways full of cars. I don't want motor homes in side yards and back yards. I don't want boats in driveways all summer and I don't want to tell people that they can't work out of their homes. quitely

11 years of collecting fees has brought in over $36,000. The manager and leagl fees I'm sure are coming in.

What I need from this forum are some good suggestions on how to deal with these changes.

I trust you, Mike!

All the things you don't want sound reasonable to me. If these things are included in the proposed CCRs then you will have to work to convince your neighbors to vote them down. Has the board put together a committee to draft up the changes or is it just the attorney and the manager? Seems to me it would be a good idea to have a meeting of the members to brainstorm some of the changes being considered. Perhaps you can convey this point to the board. As a past board Pres, and a very effective one at that, I would think your opinions would be valued. Frankly I think it's a shame that the money accumulated over the years will most likely be used to pay the manager (which I doubt the assn even needs!) and the attorney (who's services are also questionable!). IMO, an attorney could be consulted to review the final draft but is not needed to prepare it thus running up a much higher legal bill!

MikeR (Utah)
Posts: 68

Posted:

Thank you Donna.

For the last 6 years the officers have really done nothing to enforce the CC&R's, but I'm certin that this group has a plan to enforce now that they are eliminating the restrictions that they would not live up to. I don't think that many of my neighbors take any of this seriously because of the inactiveity. I've talked to several and they hadn't really looked the changes over carefully. Once they did they became concerned. How is the best way to get people to pay attention to this and take it serious.

How do you remove a board?

Is there a standard outline of restriction that are resonable?

What is the best outline or definition for having a HOA?

MikeR (Utah)
Posts: 68

Posted:

As I mentioned earlier when we ment 2 years ago it was suppossed to be a collaboration with the member to draft the changes. This board of three decided to do this without the members involvement. I guess to make it easier to change to what they want. Keep in mind these are the same people that wanted no restrictions againest them. These changes make their problem go away.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Mike,
One huge problems with Boards is that they change which gives no uniformity to enforcement and interpretation to the documents. Each Board is a different mindset and sometimes, the real rebels stick around and the good guys just give up and either don't stay involved or they move. Sounds like your place.

My association was unable to get a quorum or even get mailed out votes back on some real important issues in the beginning after turnover. I got myself a couple of fellow eager beavers and we went door to door, pushing ballots in peoples faces. We explained very simply, this is what is going to happen without your vote. They voted on the spot.

Now you have it somewhat easier becaue you only have 60 some houses. (I had 565) Someone has to be the gung ho leader and if you feel very passionate about this (and you do), you might just get started and inform people to vote NO to the changes. E-mail, call, do whatever you need to do. Once you get some interest in your Association, get that rebel Board recalled. Utah might have State laws to guide you thru that, including your State Non Profit Org laws.

But Mike, I hate to tell you this but from surveys on this site, owner apathy is the number one problem with HOAs. The larger the association, the worse it is so at least your size is managable for you to canvass and motivate them. Pro active really bites but someone has to do it.

GeorgerwilliamsW (Indiana)
Posts: 975

Posted:

Quote:

Posted By MikeR on 10/17/2008 12:10 PM
What is the best outline or definition for having a HOA?

Mike,
The attached document may help answer this question.

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📄1101734846971.pdf(39 KB)

BrianB (California)
Posts: 2,820

Posted:

procedures for removal of a board (recall) are typically spelled out in your by-laws. they usually set the process, number of votes, dates, deadlines, how it works, etc...

MikeR (Utah)
Posts: 68

Posted:

I've received many good ideas from all of you. Thank you.

Anything more you can tell me would be greatly appreciated.

MikeR (Utah)
Posts: 68

Posted:

I've received many good ideas from all of you. Thank you.

Anything more you can tell me would be greatly appreciated.

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