HOA Budget

Started by NancyG1 • 9 replies • 3037 views

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NancyG1 (North Carolina)
Posts: 119

Posted:

How can a homeowner get the Board to approve the budget? It is a NC state statute but they will not adher to the law. It is not in our Covenants that it has to be ratified, but the state says it has to be ratified.

HeatherJ1 (South Carolina)
Posts: 89

Posted:

I posted this yesterday on one of my topics but I think you are already aware of this:

NCGS 47F-3-103 (Planned Communities)

Within 30 days after adoption of any proposed budget for the planned community, the executive board shall provide to all the lot owners a summary of the budget and a notice of the meeting to consider ratification of the budget, including a statement that the budget may be ratified without a quorum. The executive board shall set a date for a meeting of the lot owners to consider ratification of the budget, such meeting to be held not less than 10 nor more than 60 days after mailing of the summary and notice. There shall be no requirement that a quorum be present at the meeting. The budget is ratified unless at that meeting a majority of all the lot owners in the association or any larger vote specified in the declaration rejects the budget. In the event the proposed budget is rejected, the periodic budget last ratified by the lot owners shall be continued until such time as the lot owners ratify a subsequent budget proposed by the executive board.

Could you maybe email this law to the board? Why will they not approve it? Have they called an HOA meeting? (oh, and I'm a newbie so just throwing in my two cents for what it's worth).

NancyG1 (North Carolina)
Posts: 119

Posted:

A copy of this NCGS 47F-3-103 was given to the new President at time of change over. It was also brought up at the annual meeting. They just refuse to go by it. It is not in our Covenants or By-Laws and I think this is what they are going by. Our Covenants have never been updated to comply with the new laws. We were suppose to be notified within 30 days of the new officers and this also wasn't done within the time limit. I am now in the process of sending him an email reminding him. What I am seeking in this forum are suggestions on how to get them to understand they must comply with the statutes.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Nancy - you asked two questions.
First you asked how to get the BOARD to APPROVE the budget.
Then you asked how to get the budget ratified - which is done by the Members.

Has the Board been presented with a budget? (or developed one?)

Is it now ready to take to the Members for ratification?

SusanW1 (Michigan)
Posts: 5,202

Posted:

Here's what I found for NC budget ratification:

NCGS 47F-3-103 (Planned Communities)
Within 30 days after adoption of any proposed budget for the planned community, the executive board shall provide to all the lot owners a summary of the budget and a notice of the meeting to consider ratification of the budget, including a statement that the budget may be ratified without a quorum. The executive board shall set a date for a meeting of the lot owners to consider ratification of the budget, such meeting to be held not less than 10 nor more than 60 days after mailing of the summary and notice. There shall be no requirement that a quorum be present at the meeting. The budget is ratified unless at that meeting a majority of all the lot owners in the association or any larger vote specified in the declaration rejects the budget. In the event the proposed budget is rejected, the periodic budget last ratified by the lot owners shall be continued until such time as the lot owners ratify a subsequent budget proposed by the executive board.

NCGS 47C-3-103 (Condominiums)
Within 30 days after adoption of any proposed budget for the condominium, the executive board shall provide a summary of the budget to all the unit owners, and shall set a date for a meeting of the unit owners to consider ratification of the budget not less than 14 nor more than 30 days after mailing of the summary. There shall be no requirement that a quorum be present at the meeting. The budget is ratified unless at that meeting a majority of all the unit owners or any larger vote specified in the declaration rejects the budget. In the event the proposed budget is rejected, the periodic budget last ratified shall be continued until such time as the unit owners ratify a subsequent budget proposed by the executive board.

######

As you can see, the budget IS ratified unless there is a vote NOT to. This meeting does not even have to have a quorum.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Nancy,

If the law was enacted after the HOA was formed, your HOA may be exempt from the law unless it chooses to update its documents to comply with the new law. There should be a section in the law, usually near the beginning, that states who the law applies to. The declaration or CCRs are considered a contract and the Article I, Section 10 of the U.S. Constitution forbids states from enacting laws that impair existing contracts. (The federal government is not so restricted.) The courts have upheld this, except in very rare and extreme cases.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

IF the law DOES apply to your HOA, then they must, of course, comply. Failure to do so may be grounds for a lawsuit against the HOA for recovery of any excess assessments paid as a result of any fee increase in the new budget.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Nancy,

I agree with everything Bruce has said. You asked how you can get the board to comply with state law? In many instances, simply stated, you can't, unless. . .

1) there is a state agency that oversees HOAs with whom you can file a complaint
2) you or some other member brings suit against the assn for failure to comply with state law. I certainly wouldn't recommend doing this over a trivial matter as the expense is on the shoulders of the plaintiff and it can be extremely costly.

In the meantime all you can do is to keep informing the Pres. he is violating state law. Perhaps you can get the ear of the other board members so they will do something about this. The Pres. is only 1 member of the board! Or, get together a group of members with your same concerns and confront the Pres.

NancyG1 (North Carolina)
Posts: 119

Posted:

Thanks to everybody for their information. As most of you agree it would be expensive to sue the BOD and it is apparent the homeowners do not care what the BOD does. I made a motion at the annual meeting to ratify the budget and not one of the homeowners even seconded it. The Pres said we didn't have to because we were under FHA. I questioned this and said it was a state law and he said he would check into it and get back to us. Nothing has been said since then and it has been a year. Guess the BOD can do whatever they choose to do with out any circumstances. See new question I just posted.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Nancy,

By saying the HOA is under FHA, it's clear your Pres "doesn't have a clue"!! Unless there is a state agency to oversee HOAs, then the only recourse is to bring a lawsuit against the board for violating state law. This is very costly. There are some boards who purposely violate the law because they know a lawsuit against them is doubtful.

The fact that not one member cared to second your motion to ratify the budget tells me they really don't care!

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