Road Maintenance Fee

Started by JohnP9 • 11 replies • 1443 views

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JohnP9 (North Carolina)
Posts: 16

Posted:

Question, Our HOA established a Road Maintenance Fee (RMF) on new construction in our community 4 years ago. This RMF has been voted on and approved by the majority of property owners each and every year since. Now we have an individual (he did not pay this fee) stirring up the residents by saying it is unfair and we should refund the monies collected back to the home owners. Believe me, we have discussed this issue to death with all the arguments pro and con about the RMF. Anyway, 14 times this fee was presented and paid in the last 4 years. Now here's the question, IF the majority agrees to refund the money, WHO GETS IT? You see the money was paid by the builders prior to start of construction not the home owners, I know, I know he probably passed it on. I contend we can not legally give the money to anyone other then the person who wrote the check. Unless the home owner can prove that the builder passed it on, and I'm not sure even then, Correct?

Not looking for legal advise just your thoughts.

Thanks,
John

KirkW1 (Texas)
Posts: 1,665

Posted:

If you are maintaining the roads, then I think the idea is a good one. The fact is that construction does put more wear and tear on the road. It should also apply to any remodeling project that will noticeably cause more traffic for an extended period of time.

As for refunding the fees, I would think they should go back to the person who paid them. Otherwise, the money should remain in the reserve fund specifically for road maintenance.

GloriaM (North Carolina)
Posts: 829

Posted:

John:

If your roads are private (which I assume was the reason for establishing the RMF) then why is the board even considering refunding any portion thereof? With the price of oil on the rise the cost to place down asphalt is also on the rise.

My understanding of establishing a RMF is to repair and maintain the roads within the subdivision. Has the board ever done so expending some of the funds for the roads?

SusanW1 (Michigan)
Posts: 5,202

Posted:

Have you done a Reserve Study assessment on these roads? Do you think they will last forever? Put that money into a PLAN for repairs and replacments for the future. It will come soon enough!!

We have "Membership Dues" The roads, beach, Community Center and Water System is all rolled up into ONE fee (dues).

JohnP9 (North Carolina)
Posts: 16

Posted:

Gloria
Yes our roads are private and yes we just had them repaved. We had a special assessment of the property owners to make up the shortfall, RMF, Road reserve and the special assessment covered the cost. The individual that is raising cain claims the RMF is unfair. His rational is that those 14 who payed the RMF payed more than the rest of the property owners because of the RMF. And he claims our R&R's say we all should pay the same. They Don't Say That. Anyway, some Board members are starting to buy into his demented logic. My question to them and him is who gets the money back if the BOD and the people decide to give it back, the builder who wrote the check or the person who bought the house from him? He claims it was passed on to the buyer,No proof it was, and he wants us to refund it to the buyers. I feel the builder would have a legal claim to any money refunded as he wrote the check, True?

JohnP9 (North Carolina)
Posts: 16

Posted:

This is the section of our R&R's he claims says that all property owners must pay the same. And the RMF is unfair as only new homes have to pay it.

Each property owner, by acceptance of a conveyance of a lot within Golf North, whether or not it shall be expressed in any such deed or conveyance, shall be deemed to covenant and agree to pay:
a. Annual assessments or charges;
b. Special assessments for capital improvements, such assessments to be fixed, established and collected from time to time as hereinafter provided. The annual and special assessments, together with such
interest thereon and cost of collection thereof as hereinafter provided, shall be a charge on the land and shall be a continuing lien upon the property against which such assessment is made as hereinafter set
out.

I think the word CHARGES covers the RMF, and I can't find anything that says everyone pays the same. To me this section says that all property owners agree to pay what ever the BOD with the approval of the majority of property owners says they have to pay. True or False?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By JohnP9 on 06/20/2008 6:20 PM
This is the section of our R&R's he claims says that all property owners must pay the same. And the RMF is unfair as only new homes have to pay it.

Each property owner, by acceptance of a conveyance of a lot within Golf North, whether or not it shall be expressed in any such deed or conveyance, shall be deemed to covenant and agree to pay:
a. Annual assessments or charges;
b. Special assessments for capital improvements, such assessments to be fixed, established and collected from time to time as hereinafter provided. The annual and special assessments, together with such
interest thereon and cost of collection thereof as hereinafter provided, shall be a charge on the land and shall be a continuing lien upon the property against which such assessment is made as hereinafter set
out.

I think the word CHARGES covers the RMF, and I can't find anything that says everyone pays the same. To me this section says that all property owners agree to pay what ever the BOD with the approval of the majority of property owners says they have to pay. True or False?

John,

IMO, the section is quite clear in saying "each property owner" must pay annual assessments and special assessments. Although I don't agree with your assumption that the word "charges" covers the RMF, if, in fact, it does then "all property owners" must pay it. Frankly, I believe the word "charges" is just another word for "assessments".

JohnP9 (North Carolina)
Posts: 16

Posted:

Mary
Isn't the RMF an assessment or charge on new construction? The R&R's state each property owner agrees to pay not all property owners must pay the same. Are you saying that every property owner has to pay a share of the RMF every time a new house is constructed? These are the same issues debated to death at our BOD meetings. My question was and is IF, and thats a big if, we decide to return the RMF monies, Who gets it? The person who actually wrote the check, or the home owner who bought the house?

KirkW1 (Texas)
Posts: 1,665

Posted:

If there is a lot of contention, you may want the HOA atty to give an opinion. I suspect legally you would have to return the monies to the developer and not the homeowner. In fact, giving them to the homeowner could potentially be considered some sort of kick back scheme should it come to light. How much is your RMF? There is a possibility that the builders have just considered it within the variable cost of business.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By JohnP9 on 06/21/2008 5:45 AM
Mary
Isn't the RMF an assessment or charge on new construction? The R&R's state each property owner agrees to pay not all property owners must pay the same. Are you saying that every property owner has to pay a share of the RMF every time a new house is constructed? These are the same issues debated to death at our BOD meetings. My question was and is IF, and thats a big if, we decide to return the RMF monies, Who gets it? The person who actually wrote the check, or the home owner who bought the house?

John,

Frankly, I'm not quite sure what the RMF is as it isn't mentioned in the section of your CCRs that you posted. But what that section does specifically say is: "Each property owner, by acceptance of a conveyance of a lot within Golf North, whether or not it shall be expressed in any such deed or conveyance, shall be deemed to covenant and agree to pay. . ." Note it says "each property owner". Isn't there a section somewhere under assessments that says each property owner pays the same assessment? If assessments are not assessed equally then the CCRs should specify how they are to be assessed. But I think the biggest issue here is by what authority is the RMF being charged? The board can't simply write a rule for anything they choose. The CCRs should outline what type of rules they can adopt. And, if this is a board adopted rule (a new rule not an interpretation of an existing CCR rule) then the section you posted doesn't apply.

If it is deemed the RMF was levied in violation of the CCRs and the board agrees the monies should be refunded, IMO, the refund should go to the person who paid it to the assn. I believe you said the builder paid the fee then passed it on to the buyer. If that is the case the builder should get the refund and it would be up to him to decide whether or not to refund each individual buyer.

GloriaM (North Carolina)
Posts: 829

Posted:

John:

Are you sold out, or are you still class A & B lots? This person is he a lot Owner or does he have a house on the lot. There are so many variables to this before I can comment on your situation. If you would like you may give me a call at my office listed and I would be happy to speak with you.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Anyone who does NEW construction or REMODELING where large trucks will have to travel over the bridges and roads in our subdivision has to post a Road Bond to cover any damages to the roads and/or bridges.

The fee is kept until the construction is complete. An "administrative fee" is deducted, and the bond is returned to the person who paid it.

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