By-Law translation for me, please?

Started by KennethN • 14 replies • 1196 views

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KennethN (Illinois)
Posts: 36

Posted:

Okay, in our declaration, it says that the developer and owners are responsible to pay assessments (and contributions, etc. . .). For developer it says to check with 8.12.

8.12 Exempt Units:

Each Unit, for the period prior to the time a home is constructed thereon and sold and conveyed by Developer, shall be exempt from the capital contributions, assessments, charges and liens of the Association created herein for any amount in excess of sixty percent(60%) of capital contributions, and/or monthly assessments paid by other unit owners.

So as I read that, my translation is this:

each unit, pre-closing, is free from paying any amount that is greater than 60% of what is paid by units that are post-closing.

I could be way wrong, but Ive struggled with this for hours, and short of having an attorney read it, this was my first try at help.

Thanks again everyone!

Ken

KirkW1 (Texas)
Posts: 1,665

Posted:

I think you read that correctly. Makes you wonder where the author went to school doesn't it?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Kenneth,

That's the way I read it to! Lawyers have a knack for using 50 words to say what we could say in less than 10!

KennethN (Illinois)
Posts: 36

Posted:

After two days of pounding the current MC about this, here is the response I just received:

"Also, I have been turning questions and concerns about paying assessments on unsold lots over to our President and [Developer] in case there is something that can be done (or has to be done) w/regard to [developer] paying assessments.
Our company president has been advised of the situation and will continue to monitor this."

I just had a conversation with a member of the community who said lawyers are telling him not to trust the MC, especially one getting so much business from a developer. I am just curious if anyone else has an opinion about the relationship between a MC and the developer.

It sounds like to me the MC is doing some serious backpeddling here and they could be in some serious trouble.

Ken

MaryA1 (Arizona)
Posts: 7,043

Posted:

Kenneth,

The MC is an employee (albeit a contractor) of the developer! Need I say more?

KennethN (Illinois)
Posts: 36

Posted:

Yeah, I understand that, I just figured with turnover so imminent they would be more understanding of their new bosses. However, I guess this HOA is small fish compared to the many HOA's the developer can bring them.

I think it is going to get really interesting. The developer, according to our Declaration, is supposed to be paying on each unsold unit.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Ken - are you talking about undeveloped lots or unsold units???

Unsold units must pay a rate of 60% of all assessments.

There's nothing here about undeveloped lots.

KennethN (Illinois)
Posts: 36

Posted:

Susan,

I guess I was using them interchangably.

We have about 400 "Lots" Which only 150 have houses at this point. The plan was for 2700. They started another neighborhood, that was to be included in this association.. The streets are 90% finished and sewer and water about 50% (according to city engineer). So I'm not sure how many homes were projected for that area. But a very conservative estimate of about 1500 planned homes is still farmland.

Ken

SusanW1 (Michigan)
Posts: 5,202

Posted:

The MC's response talked about "lots"

The poorly worded declaration talked about "units."

MaryA1 (Arizona)
Posts: 7,043

Posted:

Kenneth,

If this new neighborhood was planned after yours was approved by the city, then your CCRs should have an amendment adding the plat of that new neighborhood. Otherwise, legally speaking, it is not a part of your HOA. At least that's the way I understand the system to work. You may want to check into this. Also, as I suggest earlier, the BOD should be checking with the developer and the city to see if the large farmland tract can be removed from the plat for your s/d. This may be a big property tax reduction and a benefit in other ways as I'm sure you know. However, until this tract is removed from the plat it will continue to be a part of your HOA.

KennethN (Illinois)
Posts: 36

Posted:

Thanks for the replies Mary.

We don't have a BOD. That was what started all of this, they are "voluntarily" doing turnover next thursday. I know we have two nominee's (three needed). I may run. Just doing the research the big item that came up was the developer not paying any assessments (but they did donate $43,000 last year so we could have our pool and clubhouse, they are not doing so this year and therefor no clubhouse or pool and according the MC we can't pay all our bills right now).

The first unit of this association went up over two years ago. At that time all 2700 were planned. The economy hit the crapper, and the builder hasn't built a house in at least 18 months (153 total of 2700). They recently remove thier signs, sent out a letter and packed up the sales office.

All the documents have to be filed with the county? (association documents, addendums, etc..).

I would like all the most recent ones, Our manangment company would take weeks, I wasn't sure if there has to be copies at the county (there is a stamp in the Declaration I have saying it was filed with them).

Thanks,
Ken

MaryA1 (Arizona)
Posts: 7,043

Posted:

Kenneth,

I don't know what the requirements are in IL, but in AZ only the CCRs must be recorded with the Co. Recorder. Also a requirement in AZ is that the developer must provide all the gov. docs and the public report to anyone interested in purchasing a lot in a new s/d. This is a requirement b/4 the contract to purchase can be signed. Of course the developer should be turning over all these documents plus all the records of the assn. Since you're interested in running for a position on the board you may want to make a list of everything to be accomplished at turnover.

Here's a list of the suggested items, you may have more to add:

1) investigation of condiditon/construction of common areas (a good idea is to get a committee together to walk the s/d and make notations of anything questionable)
2) reserve study
3) determine adequacy of assessments
4) obtain copies of all pertinent assn docs
5) obtain copies of all previous budgets and financial reports and records
6) obtain copies of all previous meeting minutes (both member and board)
7) obtain copies of all contracts for services
8) obtain copies of all tax returns and corporate filings
9) obtain title to all common areas
10) landscape and construction drawings
11) inventory of personal property (fixed assets, etc.)
12) list of builders/subcontractors
13) list of owners and mortgage companys
14) copies of all insurance policies
15) review status of deed restriction enforcement; and
16) transfer of control through board members

MaryA1 (Arizona)
Posts: 7,043

Posted:

Kenneth,

I just thought of one more important thing. . .

Get the contact number and mailing address of the developer in case the BOD needs to contact him after turnover. Also it would be wise to maintain a friendly working relationship with him. Remembering back, there were many instances when I needed to contact our developer after turnover and never had a problem getting any info, etc. I was treas and the only board member who was able to contact him with no difficulty -- my calls were always put straight through to him.

KennethN (Illinois)
Posts: 36

Posted:

Mary thank you so much for the list. And everyone else who has taken the time to post and answer my questions. It's all truly apprecaited and if and when I get on our board I hope I can provide on this message board as so many of you have for me. (don't get me wrong, I'm most likely going to be ASKING questions for a long time).

The turnover/election is scheduled for Thursday May 14th. We have two nominee's so far, of three. I've met both of them. I will continue to research, to make sure this is something that is right for me to do. There are two HOA's in the area with the same builder and MC (suprising to me, both still use the initial MC).

Again, thanks. I will update this post if any news comes.

Ken

MicheleD (Kentucky)
Posts: 4,491

Posted:

I read the passage over and over.

I ran it through my "By-laws to Plain English" translator.

After several attempts, I came up with this translation each and every time:

All your base are belong to us.

Hope that was helpful.

If not, the video should give further clarification.

http://www.youtube.com/watch?v=qItugh-fFgg

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