Reasonable reserves

Christy - you are likely to get many, many clarifying questions from some of the regular posters here before they offer up advise/opinions. They're not being nosey, just trying to get perspective in order to put forth their best thoughts (which by the way do not substitute for legal advice - just experienced, practical suggestions).

From my vantage point (and lack of time to start those questions right now), I'll just offer up a comment - one that is NOT directed at you, but is generalized to all folks who purchase real estate that involves CCR deed restrictions.

This is the sort of situation that you can end up in when you take the "passive owner", "I don't want to get involved", "the HOA will take care of it" approach to purchase and subsequent ownership in such a community.

Read you governing documents before you purchase at the very least for the big "red flags".
Read them again after your purchase is complete to better understand the nuances of how your community will run.
Stay involved with the HOA to ensure that it's actually functioning according to it's governing documents.

Christy.

Just a cursory read of your message leads me to believe it may be time for a change in board members. A special assessment and/or raising the dues would most likely be the only way to "dig yourself out". Even though that's what the BOD is proposing I don't know that I'd trust them with any more money as they don't have a very good track record in handling $$$.

I don't think SC has HOA specific laws bu there is a nonprofit corp act which applies to HOA. This can be found at: www.scstatehouse.gov/code/title33.htm

Section 33-31-702 - special meetings and 33-31-808 & 809 - removal of directors may be of special interest to you.

Your bylaws and/or the state statutes should state the exact procedure to follow to remove directors and your CCRs should state the correct procedure for levying a special assessment. If the special assessment procedure was not done correctly then, IMO, it would be null and void. However, I would not recommend not paying it. The members need to let the BOD know the procedure was not followed properly and insist they rescind it.

Thanks for the responses. That is the problem with all of what has transpired here is being able to accurately follow all laws etc. This is very complicated and attorneys are involved giving different opinions. This project is already underway and just about nearing completion. 50 percent of the community have paid their assessments in full, 30 percent are on payment plans, and 20 percent have not paid anything at all. The 20 percent that have not paid are currently in litigation with the BOD (sucessfully halting all foreclosures on their property. Additionally, value of the properties are bringing at BANK foreclosure about 1/2 of the appraised value of the properties.) I am so new in learning about all of this and like I mentioned before it really is quite complicated to understand all of the HOA laws. In the current economy, I am concerned that this large increase in monthly assessments will just lead to a vicious cycle with more and more individuals unable to pay and am not convinced that the HOA foreclosures will bring in the money that is due the "special assessment" account. No, the reserve account was not used for this assessment, nor is it now. However, even with this large increase in our monthly dues, very little is left over for reserves. The 2010 budget is including the actual money borrowed (so far 60,000) by the HOA from this new bank loan as money in our reserves. Again, thanks to all and please remember I am trying to learn

We are a community of 72 condos. 3 members are represented together with 11 joining later. I am not privy to the exact details of the suit (only what the other homeowners are willing to share). Another homeowner has filed a completely seperate suit.

What was the assessment for? A particular scope of work outlined by a Contractor.

I do not know what the reserve account is slated to be used for. Where would I find this information. The Board minutes used to tell us under financial report how much money was in reserves but now states, "(the Property manager) presented the current account balances." The BOD only gives 3 days notice to BOD only for meetings. BTW, this is a second home and we are 8 hours away from the property.