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Subject: Getting around making Covenant Changes
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GaryP3
(North Carolina)

Posts:13


05/03/2019 6:35 AM  
Hi, New member here,

I am a newly elected Board member of our POA (HOA)
This is about Road Bonds but has wider implications

Our POA is in North Carolina which has a state wide statute NCGS 47F for Planned Communities
It says nothing about this issue.

Curious, Our Covenant document states that a refundable $1,000.00 road bond will be collected before construction is allowed to start.
We have an Architectural Review Board (ARB) which has a Guidance Document (GD) issued to all new builders.
There has been some discussion among board members to raise this due to excessive wear on roads and rising costs to repair.
Knowing the difficulty in making a covenant change (we need a 67% vote to approve) a board member has proposed that instead we add new, higher amounts to the ARB GD instead of going through an arduous process to change the covenants.

Is this a standard practice and more importantly , is it even legal to do it this way? How legally binding is a Guidance Document?

Any assistance would be appreciated.

Gary
RoyalP


Posts:0


05/03/2019 6:59 AM  
O-M-G

here we go AGAIN

COVENANT = CONTRACT

if y'all wish to change it, y'all must follow its' provisions

NOT

try an 'end around' because of the DESIGNED IN and NECESSARY difficulty


The 'Guidance Document' is only as legally binding as the Covenant which authorizes same.

The 'Guidance Document' may explain or elucidate the BOD's interpretation of a covenant or restriction, but, it may NOT change or modify a SPECIFIC restriction or covenant.


Trust me, down the road y'all will regret DEARLY travelling the proposed road.
GaryP3
(North Carolina)

Posts:13


05/03/2019 7:08 AM  
Thanks, I am in full agreement.

Having recently become a member of the board I was struck by how much of this type of thinking is and has happened in the past. I seem to be in the minority when it comes to doing things like this.
Should I be contacting a lawyer to get clarity?

Honestly, right now I am sorry I ran for this office. Every board meeting we have feels like a Kangaroo Court and we just make decisions unilaterally about everything.

I found out that just before I took my place on the board a "deal" was struck with a new lot owner conveying common property for a deed to a boat slip. our General Statute 47F expressly states that conveying Common Property must be approved by a vote of 80% of the membership of the association.

I don't know what to do. It seems like a run away board.
RoyalP


Posts:0


05/03/2019 7:12 AM  
..... follow them in a different direction


next time: CAVEAT EMPTOR
DouglasK1
(Florida)

Posts:1429


05/03/2019 8:29 AM  
Since most states and local jurisdictions don't provide much oversight to associations, from a practical point boards can get away with a lot that is not proper. Unless somebody sues and the issue ends up in front of a judge, the board's decisions will effectively stand.

Your dock issue is a great example. Any owner could sue the association to force return of the property, and probably win based on the facts you have stated. If nobody sues, then the owner has their private dock.

Escaped former treasurer and director of a self managed association.
RoyalP


Posts:0


05/03/2019 9:32 AM  
ditto
NpS
(Pennsylvania)

Posts:3583


05/05/2019 4:12 AM  
Hi Gary
Can you explain who gets the road bond funds, how they can be used, and who has control of disbursements?
Thanks.

Sikubali jukumu. Read all posts at your own risk.
GaryP3
(North Carolina)

Posts:13


05/05/2019 5:48 AM  
Posted By NpS on 05/05/2019 4:12 AM
Hi Gary
Can you explain who gets the road bond funds, how they can be used, and who has control of disbursements?
Thanks.




The Road Bond is paid/submitted to the Property Owners Association (POA) before home construction can begin. The funds are deposited (and the transaction is recorded) into the General Fund bank account.
Upon completion of construction the homeowner requests the funds be returned. The Architectural Review Committee inspects the site looking for damage to the road or easements (common areas) that they can attribute to the construction of that home. If none is found the entire bond amount is refunded. If damage is assessed then all or some of the bond is withheld after the cost is assessed.
The Treasurer disperses the funds if they are returned to the owner
NpS
(Pennsylvania)

Posts:3583


05/07/2019 2:58 AM  
Posted By GaryP3 on 05/05/2019 5:48 AM
Posted By NpS on 05/05/2019 4:12 AM
Hi Gary
Can you explain who gets the road bond funds, how they can be used, and who has control of disbursements?
Thanks.




The Road Bond is paid/submitted to the Property Owners Association (POA) before home construction can begin. The funds are deposited (and the transaction is recorded) into the General Fund bank account.
Upon completion of construction the homeowner requests the funds be returned. The Architectural Review Committee inspects the site looking for damage to the road or easements (common areas) that they can attribute to the construction of that home. If none is found the entire bond amount is refunded. If damage is assessed then all or some of the bond is withheld after the cost is assessed.
The Treasurer disperses the funds if they are returned to the owner




The hierarchy of documents makes your covenant superior to your GD. In other words, the GD cannot be in conflict with your Covenant.

I agree that the $1k seems inadequate. But trying to raise the Bond fund will need to go to a vote. IMO, no workaround.

Sikubali jukumu. Read all posts at your own risk.
KellyM3
(North Carolina)

Posts:1418


05/10/2019 3:46 PM  
Posted By GaryP3 on 05/03/2019 7:08 AM
Thanks, I am in full agreement.

Having recently become a member of the board I was struck by how much of this type of thinking is and has happened in the past. I seem to be in the minority when it comes to doing things like this.
Should I be contacting a lawyer to get clarity?

Honestly, right now I am sorry I ran for this office. Every board meeting we have feels like a Kangaroo Court and we just make decisions unilaterally about everything.

I found out that just before I took my place on the board a "deal" was struck with a new lot owner conveying common property for a deed to a boat slip. our General Statute 47F expressly states that conveying Common Property must be approved by a vote of 80% of the membership of the association.

I don't know what to do. It seems like a run away board.




Gary,

As a new board member, don't fall into the trap of thinking and saying terminologies like "Runaway Board" & "Kangaroo Court." Honestly, it will increase pressure on you mentally when the issue may very well be one of incompetence by sitting board members. Honest...but destructive...incompetence.

I don't like that boat slip deal.......that needs addressing in all honesty. The common area is owned by all homeowners.
GenoS
(Florida)

Posts:3132


05/11/2019 1:01 PM  
In an HOA (in Florida anyway) the common elements are not owned by "all the homeowners". That's typically a condo concept where unit owners own an "undivided interest" in the common property".

In an HOA the common property and elements are owned by the Association itself, the incorporated entity. Insofar as homeowners are members of the association they may influence what happens with the common property by voting for Directors who sit together as a Board and make all the decisions, but the homeowners technically do not own any part of it.
GaryP3
(North Carolina)

Posts:13


05/11/2019 1:28 PM  
In HOAs are governed by General Statute 47F which guides and supersedes all CC&Rs. Related definitions therein are:
- "Common elements" means any real estate within a planned community owned or leased by the association, other than a lot.
- "Limited common element" means a portion of the common elements allocated by the declaration or by operation of law for the exclusive use of one or more but fewer than all of the lots.

Gary
GaryP3
(North Carolina)

Posts:13


05/11/2019 1:29 PM  
Meant to say In North Carolina
RoyalP


Posts:0


05/11/2019 2:14 PM  
Posted By GenoS on 05/11/2019 1:01 PM
In an HOA (in Florida anyway) the common elements are not owned by "all the homeowners". That's typically a condo concept where unit owners own an "undivided interest" in the common property".

In an HOA the common property and elements are owned by the Association itself, the incorporated entity. Insofar as homeowners are members of the association they may influence what happens with the common property by voting for Directors who sit together as a Board and make all the decisions, but the homeowners technically do not own any part of it.





best and most concise explanation i have seen
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