Your Lake, Your Bill.

Your Lake, Your Bill.

Our HOA has several small lakes within it. About 30% of the homes reside on these lakes, however all 100% of the homes within the community are paying uniformly for the maintenance of the lakes. All the lakes are hidden behind homes with no road view. Lake property lot lines typically run to the center of the lakes. According to the CCR, lake access is very limited with only few places to launch a small canoe or kayak. Homeowners can use the water but are not to beach on a yard unless an emergency of course.

A movement within the neighborhood is suggesting lake homes pay more in fees to cover the cost of maintenance. The management company has suggested that it would be impossible to change the covenant, and might even required the individual mortgage companies to be notified and involved. Why would the mortgage companies need to be involved? Has anyone experienced this?

I just reread your post. As I said, it's certainly possible to change your CC&Rs, however it might be very difficult to get the numbers you need because of the amendment you propose.

Lets say there are 100 lots.

Per your posting 30% live on the lake. It's a safe bet that they will vote against the amendment.
If 2/3 of the membership is needed, you will need 67 votes that are in favor of the amendment.

With the expectation that all of the 30 lots will be voting nay and with 67 yea votes needed, you will need to have 97% of the membership willing to participate. My Association did amend our CC&Rs and we barely got 75% participation. Granted our changes were not as volatile of an issue (which may be in your favor to get the attendance).

I certainly understand your concerns. I will caution you that this idea will most likely cause major division within your community during the debate process. It's also possible that if you succeed, there might be a legal challenge to the amendment (so follow procedures to the letter).

Good luck.

Are you saying that the off-site homes have NO access? No beach? No access to launch boat? No picnic area? Yet everyone has paid the same according to the CCRs from the start?

Seems odd to me.

The lakes on on Association property correct? Who makes up the association? ALL the owners. So why wouldn't 100% of the owners pay 100% of the cost of ownership despite who may have more access? I am sure those 30% of those homes paid an upfront extra premium to get those lots along the water already. I would say requesting a change of them paying more is unfair and unequal.
It's just a case of the "Grass is greener on the other side" but they don't account for more mosquitos...

I think making the lake exclusive to only to those who have houses on the lake is unfair. Lakes are a selling point to other potential buyers who may want to use of those lakes. It's not fair to the other owners who may on occassion want to make use of their common element. Essentially, why rock the boat if everyone is sitting in it?

The mortgage company being involved is a bit of a stretch on changing the convenants. I would say they aren't a factor unless the mortgage company owns the whole HOA. Otherwise, it's the owner's group majority decision to change the rules.

If an accident occurs at the lakes, ask your insurance company what the response would be. Hopefully, you have signs posted at these general access points stating for HOA members/guest/Swim at your own risk type signs. A good general rule board is always a good idea even if ignored. However, the overall accident in the lake would most likely fall on the HOA's insurance which your HOA should have liability insurance to cover.

I think the answer to that question is easy. It simply may be a requirement, period. Check the following:
a.) Your mortgage contract. See if there is a requirement in there to notify them of any change.
b.) Check your CCRs. There may be a clause in there that requires mortgage companies to be notified of ANY change.
c.) Check your state laws. There may be a requirement that mortgage companies be notified of ANY change to the CCRs.

The fine print that no one reads. I wouldn't risk the largest investment of my life when all I needed to do was print a letter and mail it. Why risk it? Banks are evil.

On the subject of "Do Mortgage Lenders have to be notified of CCR changes?"

Out of curiosity, I went back and checked my documents. Sure enough, they contain those sections you often skip over because they don't appear to apply to you. Here's what I found:

Declaration (CCRs): I found a section titled, "Mortgagee Protection." Kind of lengthy, so I won't try to quote it all here, but I'll try to summarize what the section contains. The Association must notify each mortgagee (lender)of any delinquency in the payment of assessments, any lapse or modification of any insurance policy maintained by the association, any proposed action that would require consent of a specified percentage of mortgagees (more on that later), and any judgement rendered against the association.

The actions that require consent of mortgagees include changes to the Declaration (CCRs) and other documents that affect: voting rights, reserve requirements, responsibility for maintenance and repair, rights to use common elements and limited common elements, unit boundaries, expansion or contraction of the community, insurance, leasing of units, restrictions on a unit owner to sell or transfer his or her unit, establishment of self-management when professional management had been required by any mortgagee, termination of the common interest community, and any provision that benefits mortgage holders, insurers or gurantors.

Other than document changes, mortgagees must be notified if the community is merged with another community, if the association grants any leases or easements (except for utility easements) concerning the common elements, and any action to assign the future income of the association.

The mortgagee protection section also gives mortgagees the right to inspect the books and financial statements of the association upon request, require audits, and send representatives to any association meeting which a unit owner may attend.

Mortgage Contract: My mortage contract contains a "Condominium Rider" which requires the borrower to "perform all obligations under the condominiums project's constituent documents" and to promptly pay, when due, all dues and assessments. The borrower must also take "reasonable actions" to to insure that the association maintains public liability insurance. The borrower also may not agree to change or amend any provision of the constituent documents of the association that would affect any provision that is for the benefit of the lender (such as the "Mortgagee Protection" section of the CCRs, as mentioned above) without the written consent of the lender. Also, if the borrower fails to pay assessments when due, the bank has the right to pay them and thereby make those payments an additional debt owed to the bank. The bank can also declare the borrower in default of the loan if the assessments are not paid.

So, do the banks need to be notified of changes to the association's documents? You will need to carefully read your own documents to find out.