Amend Restrictions/Special Assessments/No $$$ to perform maintenance

Hi - This is my first post, and I apologize for the lengthiness of it. I am in desperate need of advice and/or suggestions.

I serve as Pres. of our neighborhood HOA. It is a small community with 45 lots (4 are still undeveloped). Prior to my moving into this community, the Developer relinqished control of the HOA, and a Pres. and Treasurer were hand-picked by him (from what I gather). The President continued to serve in this capacity until January '08 when I was nominated/elected to assume this role. Somewhere in between a new Treasurer was chosen. The former President had no prior experience, and did not make any effort to find out how an HOA should operate in the state of SC. Frankly, he served in a role I would label "social director". The first HOA meeting I attended was run by a resident serving in no official capacity. Apparently, the former President did not like public speaking so he allowed the meeting to be headed by this person. There was no agenda, and it appeared the same few residents attended the meetings and made the same complaints without any action ever being taken. My biggest problem is how the Restrictive Covenants were originally written. The Developer used the most generic set of restrictions I have ever seen. Biggest issue right now is we do not have any language allowing for special assessments. The median house price is about $350,000. and the dues have been $75.00 from day one. Our biggest expense is street lighting which is about 90% of our budget. The former President did nevered bothered to increase the assessments the allowed 10%. He confided to me he "never thought about it." After being elected (by being nominated and voted in at my first meeting by the same 6 property owners always in attendance) my first action was to have a meeting with an Agenda. I started a community Newsletter, and have tried to get more participation from the community. The total lack of concern is so frustrating! There is a huge need to amend our restrictions, but an amendment has to be approved by 2/3 of all property owners (NOT 2/3 of those VOTING). In our first newsletter (which I drafted, finalized, and mailed), I mentioned we would be preparing a draft amendment to our restrictions, explained the most important amendment was a need to increase dues and allow for a special assessment because there was no reserve fund available to make even minor repairs, let alone capital improvements (at my 1st meeting a few of the residents wanted to tear down our entrance and replace it entirely because it did not reflect an upscale community) and also insisted the Treasuer prepare an operating budget and forecast as this was NEVER provided to residents in the past, and then gave written notice of a meeting to discuss proposed amendments. This meeting was the highest attendance. Some residents were opposed to specific wording so we altered the language in order to get win their vote. The Secretary and I hand-delivered a final version together with ballots. We also allowed proxy voting due to those who owned undeveloped lots, and those who didn't care enough to attend meetings. Unfortunately, we fell short by 6 votes. We had 3 oppose and 8 fail to return ballots. We are in serious need of repairs to street and other signage, we do not even have insurance on our entrance which includes two stone walls, lighting, and landscaping (which would cost about $6,000 to replace), and we cannot even afford to mulch and purchase seasonal plants. Myself and one other officer recently purchased these items out of pocket, and my partner and I also volunteer to mow, weed, and prune the entrance area because our house is the first upon entering the neighborhood. I would love to go on in more detail, but one last time - the Developer did not even have a set of By-Laws for the HOA/BOD to operate by. I actually drafted a set, and got the BOD to sign off on. Hopefully, this is legal in SC. I could not find anything contrary. Actually, we only have a BOD which also serve as the officers.

I guess I've gone on long enough. I hope to get some great feedback, and will provide more information if needed.

Thanks!

Lisa

Well, I would imagine that it would be quite an expense to actually tear the entrance down at this point, too.

I'm hoping that the dues were at least increased the 10% they are allowed without a vote.

I agree with Peter. People start to sit up and take notice if they know it will cost them. My hoa had a special assessment meeting to collect $15,000 to cut down some large oaks. After investigating I learned there were two board members who wanted these healthy trees cut down on their property and wanted all owners to pay for it. First, our docs prohibit healthy oak trees being cut down and secondly, these two board members went door to door to get proxies agreeing with them with no explanation of which trees sould be cut down and why. They knew we had very poor attendance at meetings and thought they could railroad this through. I printed out a flyer explaining in detail what this was all about and at the meeting we had the largest turnout ever. Not only did the owners not want to spend $150 each but realized cutting down these trees would affect their property values. But, I degress....when owners know it will cost them suddenly they take an interest.

True, but I'm thinking of virtually every signature entrance in developments in my part of the country.

Not a one doesn't have some sort of ornate wall, either creekrock or brick or some sort of stonework.

Not to mention the ones that have fountains, or lighting displays.

Simple landscaping is one thing, but if it's any sort of "signature" entrance like I'm thinking it could get quite expensive to tear it down.

Although, some kids from a neighboring subdivision tried to run off with our wall's concrete balls one year.

They got them down off the wall (which was a feat in itself, since they were attached with some sort of steel rod) and they actually had rolled them about 20 yards before they gave up.

I would recommend you look into your state laws regarding HOAs and covenants. Here in Texas there are laws that set some standards and give procedures that often are left out of covenants. Some of the procedures can be modified and some can not. But some of our standards are that you have one year in which to secure the approval of an amendment to the covenants. If you have something similar then you can possibly seek out those 8 lost votes. I think that non-voters are probably the biggest obstacle to amending most covenants.

But in the mean time you would do well to put together a package of the changes you want to see done. You really need a reserve study. Since you clearly don't have the funds for a professional one, get a guide and do a self-study. Also get some idea what it would cost to upgrade the entrance if that is what people want.

It is all well and good to state you want to raise dues and have a special assessment. But it is quite another to have someone say that we need even say $10,000 a home spread out over some period of time.

Hi Everyone!

Thank you all so much for the feedback.

First, I did increase the dues for '09 the allowed 10%. We actually had one resident call and ask why the dues were raised even though she had voted to approve the amendment. The 10% only increased the dues an additional $7.50 annually - hardly enough to cover the increase in electricity. We also have residents who are notorious for not paying their dues on time, and in the past they were pretty much allowed to pay whenever they got around to it. Some even paid in April or May even though they are due by January 31st. These same residents usually claim they never received the December notice regarding assessments, and a couple even suggested I call and remind them.

In 2008, I provided a budget of our actual expenses (i.e, street lighting, office, and property taxes on the common areas), and also submitted quortes from several area contractors to make repairs to our street and speed limit signs. I presented this information, but at that time the majority of attendees were under the impression there was a reserve fund of about 4K (what the former President told them), and based on that they believed ample funds were available to handle maintenance and/or repair costs. However, this was incorrect because it was just the balance for the entire year of collected assessments. This is a perfect example of lack of communication between the prior BOD and residents.

The entrance into our neighborhood consists of two walls on either side which are constructed of river rock, and also attached signs bearing the Apple Valley name. I do not see a problem with it as it is now, and know there are other things we need to address before worrying about having an upscale entrance. I tried to explain we do not even have insurance to cover any damage to the entrance as it is now, and where would the funds come from if someone drove into it or it was damaged by heavy rain? One resident who opposed our amending the restrictions believed the "county" should make repairs to our signs. This really floored me because she is a Deputy with our county sheriff's department. This same resident could not comprehend why we need to increase the assessments because even when there were only 3 houses in the community the assessments were $75.00 and that was enough money to pay for the street lighting. She was totally clueless the Developer was paying the bills for the street lighting during this time.

We have a meeting scheduled for May 16th and it will be interesting to see how well that is attended. The Newsletter gave the time and place of that meeting and the other quarterly meetings for 2009. We will see how many attend. In the newsletter, I always ask for volunteers to help with entrance maintenance, proposed a neighborhood yard sale followed by an evening BBQ. A few people have mentioned a neighborhood BBQ as a meet and greet event. So far, neither the Secretary or myself have received any response.

Lastly, we are in the process of choosing members for the ARC. This has been handled by the Developer, but needs to be assumed by the members. One of the residents who submitted their name to serve on this committee was one of the 3 that opposed our amendment (and she is the County Deputy who thinks the county should repair our signs and also saw no need to increase the dues because there has always been ample funds to pay for the street lights when there were only 3 homes built). Needless to say, I am strongly opposed to this person serving on the ARC, and am wondering how to inform this resident we are only choosing 3 members to serve and she is not one of them. Any ideas on this subject?

I know there is a Senate Bill, S30, being proposed. I need to find a website with specific information about this Bill. I do know it has some specific language about transparence, duties of HOA Board to Members, For Sale signs, and dispute resolutions.

Thank you all for your feedback, and I look forward to more suggestions and advice.