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Subject: Capital Projects - No Owner Approval
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Author Messages
JeffR11
(California)

Posts:14


04/26/2021 7:00 PM  
Our board is trying to proceed with a new capital project without the approval of owners.

They are a clever bunch and they decided to shift monthly dues for 2021.

A much larger percentage of funds are going Into the operating budget this year so that the funds for the project do not have to come from the reserve fund.

This project will cost $120,000 - $160,000

Is this legal ?
AugustinD


Posts:313


04/26/2021 7:14 PM  
Is this "capital project" either the maintenance, repair or replacement of a capital asset listed in the Declaration? If so, does it appear the capital asset requires maintenance, repair or replacement?
JeffR11
(California)

Posts:14


04/26/2021 7:17 PM  
No - it is a new capital project.
MaxB4
(Maine)

Posts:214


04/26/2021 7:28 PM  
It could be possible if there is no special assessment being used to fund the project. If they are shifting funds, then it's possible.
AugustinD


Posts:313


04/26/2021 7:48 PM  
Posted By JeffR11 on 04/26/2021 7:17 PM
No - it is a new capital project.
Please confirm: Is the Board adding a capital asset that is not listed in the Declaration of Covenants? If so, this by itself is a violation of the covenants.

To get meaningful help with your question, I think you are going to have to elaborate on (1) what the project is; and (2) why you think it is not listed in the Declaration.
AugustinD


Posts:313


04/26/2021 7:50 PM  
JeffR11, is the item (the "capital project") on which the Board wants to spend money listed in the most recent reserve study?
JeffR11
(California)

Posts:14


04/26/2021 7:58 PM  
Thank you for your interest.

I understand the definition of a capital project - there is no need to debate the definition of a capital project.

JeffR11
(California)

Posts:14


04/26/2021 7:58 PM  
- and no it is not in the reserve study - again, it is a new project
KerryL1
(California)

Posts:8018


04/26/2021 8:04 PM  
Since it's not a current reserve component indoor reserve study, it should not be funded from reserves.

It's exactly appropriate to fund it from your operating budget, and I believe it's OK to reduce your contributions to reserves in order to increase your operating budget so that it covers the cost of this.

I agree basically with Max.

JeffR11
(California)

Posts:14


04/26/2021 8:13 PM  


A new capital project typically requires owner approval regardless of the funding source.

This is the key question.

MelissaP1
(Alabama)

Posts:10131


04/26/2021 8:24 PM  
You do realize that Board members are HOA members right? Are you still developer controlled? Your not providing alot of details. Which usually means you want to support your opinion not what it may be.

Former HOA President
MaxB4
(Maine)

Posts:214


04/26/2021 8:37 PM  
Posted By JeffR11 on 04/26/2021 8:13 PM


A new capital project typically requires owner approval regardless of the funding source.

This is the key question.




I happen to do business in California and know the laws fairly well.

Should a capital project of that size be approved by the members, IMO, yes. Is it required, no, unless required by your specific governing documents. What must be approved is the funding source, but only if it over the 5% threshold. Can the monies come from reserves, yes, as long as it is repaid with the year.

It is very possible they have a legal opinion on this. I have seen three or four in associations I have managed where this came up. The Board had opinions from their legal counsel to move forward.
CathyA3
(Ohio)

Posts:1888


04/27/2021 4:53 AM  
From the experts:

https://www.davis-stirling.com/HOME/Capital-Improvement
JeffR11
(California)

Posts:14


04/27/2021 5:26 AM  
Thank you for your time but that does not answer my question.
MichaelS56
(Minnesota)

Posts:181


04/27/2021 5:39 AM  
Our Board of Directors determines the construction with the assistance of the Management company and keeps the owners informed but does not seek owner approvals. The past projects include retaining walls replaced, driveways replaced and looking into replacing exterior garage lights, street lights, and walkway lights as future projects.
JeffR11
(California)

Posts:14


04/27/2021 5:41 AM  
These are not capital projects.
SheliaH
(Indiana)

Posts:3923


04/27/2021 5:46 AM  
You might not like the questions raised here, but if you want a thoughtful answer to anything, it helps to provide details. You haven't said what the project is or what type of conversations the board has had regarding this thing - you might not like the idea of a new capital project, but perhaps it's what the majority of owners want. You didn't say if you were still under developer control - if so, it can decide to put in a new capitol project without homeowner approval because the homeowners don't run the show yet.

All of that said, you asked if this is legal, and since we aren't attorneys, haven't seen your documents - and not everyone lives in your state, so the answer could turn any number of ways, you'll just have to open your wallet and go to a private attorney if you want to know the answer. It's not a good idea to get legal advice on specific situations from the internet.
JeffR11
(California)

Posts:14


04/27/2021 5:54 AM  
Thank you for taking the time to comment.

This is not a substitute for legal advice but we go through many of the same problems and I was hoping that someone had been through a similar situation.

I also understand that this is specific to California.

This question is about a twenty year-old HOA and a new capital project.

A capital project is a legal term.

it is not a matter of opinion and this is not in question.

The developer is long gone.
MarkM19
(Texas)

Posts:790


04/27/2021 5:55 AM  
Jeff,
I think your answers is in a little of everyone's posts. You are being very vague and it is hard to understand why.

1) The board must have a Plan for what they are going to spend 120 to 160k on. What is it?
2) We do not know what your annual budget is but 5% is the threshold that they can not pass without getting a vote of the Majority of your HOA. What is your annual Budget? How many units in your HOA?
3) How well is your Reserve Account funded? What Percentage is it currently at now? If it is underfunded currently and they are diverting funds for this Pet project that is a secret that is a problem.

If you want your questions answered for free don't make us guess your problems.
AugustinD


Posts:313


04/27/2021 5:57 AM  
Posted By JeffR11 on 04/26/2021 7:58 PM
I understand the definition of a capital project - there is no need to debate the definition of a capital project.

Posted By JeffR11 on 04/26/2021 7:58 PM
- and no it is not in the reserve study - again, it is a new project

Posted By CathyA3 on 04/27/2021 4:53 AM
From the experts: https://www.davis-stirling.com/HOME/Capital-Improvement

Posted By JeffR11 on 04/27/2021 5:26 AM
Thank you for your time but that does not answer my question.


In my experience, an attorney would reject the answers the OP is giving here as insufficient to give meaningful advice. The attorney would tell the OP that, unless the OP provides more information, the attorney cannot help the OP.

CathyA3 is a veteran poster here. She is one of the few here who in my opinion, has an excellent grasp on the law including understanding that the law may vary state by state. When I have a legal question about a hoa/condo situation, she is my first go-to person by far.

If the OP reads the site CathyA3 linked and googles to pull up the court decisions linked at the bottom of the site, he will see that the courts would never make a decision based solely on the facts he provides. Asking for black and white answers here when the OP does not provide reasonably black-and-white facts is not fair.

If the OP takes the facts of his situation and compares them to the several cases listed (at the bottom of the link CathyA provided), he may find an answer that helps him with your decision-making.

Several of the veterans hoatalk here could read the facts of the cases (at the bottom of the site CathyA3 linked) and instantly come to the same conclusion the appeals courts did. Why? Because in general, the courts have said nationwide that, if the Declaration does not provide for the HOA's payment for the capital improvement, then the law prohibits the capital improvement without a membership vote. The Declaration is a contract, and many of the veterans here know that the Board's actions must comply with the contract and not exceeding the terms of the contract. The OP seems to be at least a little aware of this. California does have some caveats on this. From the site CathyA3 linked: "For example, replacing chain link fences costing $25,000 with slump stone costing $100,000 requires membership approval. Replacing lobby carpet that costs $62,000 with tile at $120,000 requires membership approval. Upgrading carpet from $62,000 to a higher quality at $70,000 does not require membership approval if difference in cost falls within 5% of the annual budget."

The 5% rule comes from California statutes limiting spending from the operating funds and the reserve funds; special assessments; and so on.

In my opinion, and since the OP refuses to elaborate, the OP's next steps should be to read the site CathyA3 linked; read the case law cited at the bottom of the aforementioned link; figure out how the facts of his HOA's situation fit or do not fit these cases; consider the aforementioned California caveats; then either go see an attorney to help him in his decision-making or, if he feels confident the Board is violating the covenants, immediately proceed to Internal Dispute Resolution, as described at https://www.davis-stirling.com/HOME/Internal-Dispute-Resolution .

ND
(PA)

Posts:591


04/27/2021 6:02 AM  
Posted By JeffR11 on 04/26/2021 7:00 PM
Our board is trying to proceed with a new capital project without the approval of owners.

They are a clever bunch and they decided to shift monthly dues for 2021.

A much larger percentage of funds are going Into the operating budget this year so that the funds for the project do not have to come from the reserve fund.

This project will cost $120,000 - $160,000

Is this legal ?



Your ultimate question of "is this legal?" will need to be answered by a lawyer. You'll get a variety of free thoughts and opinions from folks here, but your questions will never be answered to a truly useful degree. Also much may depend on what your actual documents say, CA HOA law, and other specifics in regard to the project/situation for which you are the only one with details.

IMO and without knowing or caring so much to fully read and/or comprehend the extensive HOA law/nuances in CA . . .

For a project in that sort of price range, I would minimally expect to see an item in the HOA's budget for the year that would have hinted at some sort of new project being paid for with funding shifted differently than in prior years. At that point is when I would have raised questions.

Further, for an item that will require maintenance, repair, and eventual replacement via reserve funding . . . the overall burden on the HOA is greater than simply the $120-160K initial investment. Some sort of discussion or relay of info to HOA members would be (have been) prudent; although it might not elevate to something technically requiring member approval.

JeffR11
(California)

Posts:14


04/27/2021 6:07 AM  
I was at this site long before I posted on this site.

We could go round and round for days with questions that have nothing to do with my original post.

I thank everyone for their time.
MarkM19
(Texas)

Posts:790


04/27/2021 6:17 AM  
Jeff,
I find your recent post disturbing. It seems like you expected a 100% answer to your question that had no details.

This site has many wise members on it willing to give good advice when we get more more of the facts on issues. You have given us literally no facts but expect a solid answer.

Is it legal was your original question. Who knows based on your information.
AugustinD


Posts:313


04/27/2021 6:22 AM  
Posted By MarkM19 on 04/27/2021 6:17 AM
Is it legal was your original question. Who knows based on your information.
My wish is that the OP will have to pay an extra three grand to an attorney for the teeth pulling the attorney will have to do. It's often the best education.
JeffR11
(California)

Posts:14


04/27/2021 6:34 AM  

The facts are what they are.

This concerns a new capital project being funded from the operating budget to avoid owner approval.

I have heard from a lawyer and I have been told that this is not as complicated as I thought.

I now have a legal opinion stating that this is not legal in California.

Thank you for your time.

AugustinD


Posts:313


04/27/2021 6:36 AM  
Posted By JeffR11 on 04/27/2021 6:34 AM
I have heard from a lawyer
Whom you either gave facts that you were not willing to share with this forum, or whom you did not pay and received some sort of general opinion worth as much as the advice here.
CathyA3
(Ohio)

Posts:1888


04/27/2021 7:46 AM  
Posted By JeffR11 on 04/27/2021 6:07 AM
...
We could go round and round for days with questions that have nothing to do with my original post. ...




This is what happens when people who want to be helpful are forced to guess at essential information and get it wrong.

Oh well, not my circus...
MaxB4
(Maine)

Posts:214


04/27/2021 8:41 AM  
Only one case listed on the bottom of the page Cathy mentioned about capital improvement has any bearing on your situation, and that is Litvak v. 155 Harbor Drive. There are only two instances where a membership vote is needed, 1) if the governing documents, specifically the CCRs outline such, or 2) If the funded needed to fund the project exceed 5% of the annual expenses of the association AND required a special assessment.

There is no state statue prohibiting a capital project or improvement without membership, only if a special assessment is needed. In the case of Litvak v 155 Harbor Drive, the CCRS stated that anything over $100 times the number of units (742) required membership approval.

The two excerpts below are from my previous HOA, located in California. In Section 5.4, it states the association may levy a special assessment if the project is over 5% of the budgeted annual expenses. If the funds are already there, which it appears from your posts that they are, then no notice is required. If they take from reserves, they have to indicate in the minutes a plan to repay within 12 month.

Section 5.4 Special Assessments. In addition to the annual assessments authorized above, the Association may levy, in any assessment year, a applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Association Property, including fixtures and personal property related thereto, or otherwise, provided that any such assessment(s) for capital improvements to the Association Property which total, in the aggregate, more than five percent (5%) of the budgeted gross expenses of the Association for that fiscal year shall require the vote or written assent of a majority of the Owners, constituting a quorum.

Somewhat up the same avenue, in Section 4.1.13, the builder put in a clause whereas you couldn't sue them, or anyone for that matter if the costs could reasonably be expected to be over $2500.00. My association tried it and sued a owner with the lawyers approval and violated our CCRs. The lawyer later admitted they never read the clause.

4.1.13 The Association has the right and power to prosecute or defend, under the name of the Association, any action affecting or relating to the Project or the personal property thereon, or any action in which all of the Owners have an interest in the subject matter of the action. Notwithstanding the foregoing, without the prior vote or written assent of a majority of the voting power of the Association, the Board may not institute any legal proceeding (including any arbitration or judicial reference proceeding) against any person or entity the cost of which could reasonably be expected to exceed Two Thousand Five Hundred Dollars ($2,500.00). In estimating the costs, the Board shall include all normal and customary court costs and attorneys' fees without regard to the possibility of recovering costs and fees if the Association were to prevail.

If your attorney says its illegal, then I hope that there is something in your CCRs that make it illegal, as no state statue prohibit it, under your circumstances.
AugustinD


Posts:313


04/27/2021 8:49 AM  
Posted By MaxB4 on 04/27/2021 8:41 AM
Only one case listed on the bottom of the page Cathy mentioned about capital improvement has any bearing on your situation
Nonsense.
MaxB4
(Maine)

Posts:214


04/27/2021 8:54 AM  
Posted By AugustinD on 04/27/2021 8:49 AM
Posted By MaxB4 on 04/27/2021 8:41 AM
Only one case listed on the bottom of the page Cathy mentioned about capital improvement has any bearing on your situation
Nonsense.



WOW...Did you read any of them, because I did.
AugustinD


Posts:313


04/27/2021 9:09 AM  
Posted By MaxB4 on 04/27/2021 8:54 AM
WOW...Did you read any of them, because I did.
One reason I know the six appeals court decisions, mentioned at CathyA3's link and that I read, are over your head is because of the way you (don't) communicate.

Use of all cap phrases and sarcasm betrays someone less interested in having a rational discussion and more interested in an irrational and unfortunate effort to build self-confidence through (always effete) efforts to bully.

Rarely have I felt I could say, as I did above, that 'several of the hoatalk veterans would come to the same conclusion that an appeals courts did.' Why? Because such decisions are often hard reading for a few reasons, using arcane vocabulary that could take me or any other layperson hours (three years of law school?) to parse, and referring extensively to decades of prior case law. But these six appeals court decisions, from across the nation, largely boil down to: Is the spending authorized in the governing documents? If so, how? The six opinions are relatively light on citing precedent and are quite heavy on quoting from the relevant HOA's governing documents.
MaxB4
(Maine)

Posts:214


04/27/2021 9:16 AM  
Posted By AugustinD on 04/27/2021 9:09 AM
Posted By MaxB4 on 04/27/2021 8:54 AM
WOW...Did you read any of them, because I did.
One reason I know the six appeals court decisions, mentioned at CathyA3's link and that I read, are over your head is because of the way you (don't) communicate.

Use of all cap phrases and sarcasm betrays someone less interested in having a rational discussion and more interested in an irrational and unfortunate effort to build self-confidence through (always effete) efforts to bully.

Rarely have I felt I could say, as I did above, that 'several of the hoatalk veterans would come to the same conclusion that an appeals courts did.' Why? Because such decisions are often hard reading for a few reasons, using arcane vocabulary that could take me or any other layperson hours (three years of law school?) to parse, and referring extensively to decades of prior case law. But these six appeals court decisions, from across the nation, largely boil down to: Is the spending authorized in the governing documents? If so, how? The six opinions are relatively light on citing precedent and are quite heavy on quoting from the relevant HOA's governing documents.



That is the biggest load of horse$hit I have ever read. Your later responses to the OP border on badgering.
MaxB4
(Maine)

Posts:214


04/27/2021 9:28 AM  
Posted By AugustinD on 04/26/2021 7:48 PM
Posted By JeffR11 on 04/26/2021 7:17 PM
No - it is a new capital project.
Please confirm: Is the Board adding a capital asset that is not listed in the Declaration of Covenants? If so, this by itself is a violation of the covenants.



This is blatantly false!
AugustinD


Posts:313


04/27/2021 9:39 AM  
Posted By MaxB4 on 04/27/2021 9:28 AM
Posted By AugustinD on 04/26/2021 7:48 PM
Posted By JeffR11 on 04/26/2021 7:17 PM
No - it is a new capital project.
Please confirm: Is the Board adding a capital asset that is not listed in the Declaration of Covenants? If so, this by itself is a violation of the covenants.



This is blatantly false!
Uh huh. You and I disagree.
MaxB4
(Maine)

Posts:214


04/27/2021 9:45 AM  
Posted By AugustinD on 04/27/2021 9:39 AM
Posted By MaxB4 on 04/27/2021 9:28 AM
Posted By AugustinD on 04/26/2021 7:48 PM
Posted By JeffR11 on 04/26/2021 7:17 PM
No - it is a new capital project.
Please confirm: Is the Board adding a capital asset that is not listed in the Declaration of Covenants? If so, this by itself is a violation of the covenants.



This is blatantly false!
Uh huh. You and I disagree.



We had 297 items listed in the original reserve study, and not one of those items is ever listed in the CCRs, not one.
SheliaH
(Indiana)

Posts:3923


04/27/2021 9:49 AM  
And this is why I dislike “is this legal” questions. It usually doesn’t take long to see the poster has already made up his/her mind and wants other people to agree (aka amen corner). However, we live in different states with different statutes (and sometimes no statutes at all) and what the documents say or don’t say can be all over the place – especially if they haven’t been updated since the dawn of the Industrial Revolution.

In my experience, the “is this legal” questions are usually a bit more (sometimes a lot) complicated than what the OP thinks they are. Or he/she has received an answer he/she doesn’t like and is fishing for what fits the narrative. I suspect Jeff was looking for a specific answer that fit whatever he’d already made up his mind about – and the vagueness of his question didn’t help AT ALL. A capital project can be anything ranging from new roofs for everyone to a clubhouse that perhaps no one really wants – we don’t live in Jeff’s community, so the secrecy is a waste of time.

Maybe I’m just dense, but for me, this may have made a little more sense if the question read something like:

Our board wants to proceed with a project to (description), without homeowner approval. It will cost between $120K - $160K and to pay for it, the board has decided to shift monthly dues for 2021 (what does that even mean?) and a larger percentage of funds are going into the operating budget this year so the funds for the project don’t have to come from the reserve fund.

And that bit about the board being “a clever bunch and they decided to shift monthly dues for 2021” is written with a bit of emotion, which can get in the way of having an adult conversation about serious issues (you become less concerned about unpacking the issue and more about being right and don’t listen to anything or anyone else).

As some of you have indicated, the answer may depend on what the project is (a major repair or replacement of a capital item), how many units are in the community, how much are assessments (so we have some idea of the money), is there a reserve fund and is it being funded regularly, have there been any discussions in the community about the project (special homeowner meetings are great for this) and my usual go-to question – have you gone to the board with any of your concerns and if so, what was the response? If not, why not?



AugustinD


Posts:313


04/27/2021 9:51 AM  
Posted By MaxB4 on 04/27/2021 9:45 AM
We had 297 items listed in the original reserve study, and not one of those items is ever listed in the CCRs, not one.
Depends on the meaning of "listed in the CCRs."
JohnC46
(South Carolina)

Posts:10952


04/27/2021 9:55 AM  
Shelia

I call what you described as shopping for an answer one wants. It happens quite a bit on this chat. Usually you can smell them as their post will be little more then a one liner like:
Can my BOD fine me? Can my BOD tell me where to park?
AugustinD


Posts:313


04/27/2021 10:01 AM  
Posted By SheliaH on 04/27/2021 9:49 AM
In my experience, the “is this legal” questions are usually a bit more (sometimes a lot) complicated than what the OP thinks they are. Or he/she has received an answer he/she doesn’t like and is fishing for what fits the narrative. I suspect Jeff was looking for a specific answer that fit whatever he’d already made up his mind about – and the vagueness of his question didn’t help AT ALL. A capital project can be anything ranging from new roofs for everyone to a clubhouse that perhaps no one really wants – we don’t live in Jeff’s community, so the secrecy is a waste of time.
Where's the like button? Because I'd hit it 100 times for SheliaH's post above.

Posted By SheliaH on 04/27/2021 9:49 AM
And that bit about the board being “a clever bunch and they decided to shift monthly dues for 2021” is written with a bit of emotion, which can get in the way of having an adult conversation about serious issues (you become less concerned about unpacking the issue and more about being right and don’t listen to anything or anyone else).
That line about "a clever bunch" raised my eyebrow as well.

BFTGG,TGI

JeffR11
(California)

Posts:14


04/27/2021 11:40 AM  
What a bunch of opinionated, hyper-sensitive babies - truly amazing.

Please have at it - tell me about myself and my motivation and intelligence,


JeffR11
(California)

Posts:14


04/27/2021 11:40 AM  
What a bunch of opinionated, hyper-sensitive babies - truly amazing.

Please have at it - tell me about myself and my motivation and intelligence,


JeffR11
(California)

Posts:14


04/27/2021 11:40 AM  
What a bunch of opinionated, hyper-sensitive babies - truly amazing.

Please have at it - tell me about myself and my motivation and intelligence,


JohnT38
(South Carolina)

Posts:569


04/27/2021 12:15 PM  
Posted By JeffR11 on 04/27/2021 11:40 AM
What a bunch of opinionated, hyper-sensitive babies - truly amazing.

Please have at it - tell me about myself and my motivation and intelligence,






I know nothing about you or you motivation or intelligence but I do know I'm glad you don't live in my community.
MarkM19
(Texas)

Posts:790


04/27/2021 12:29 PM  
Jeff,
I love when people challenge others on Intelligence and then hit Submit 3 times to send 1 Reply. That's smart.

I am glad you live in Ca. and not in any of our HOAs. Please stay put and don't move to Texas we do not need any ankle biters here.
JeffR11
(California)

Posts:14


04/27/2021 12:37 PM  

I would not promote the fact that you are from Texas.

It only confirms that your IQ is close to 50.
MarkM19
(Texas)

Posts:790


04/27/2021 12:43 PM  
Jeff,
Is that the best you got? Actually I was smart enough to leave Ca. 4 years ago before many figured it out just what a dump it is turning into.

Are all of the homeless camps starting new HOAs in Ca.?
KerryL1
(California)

Posts:8018


04/27/2021 1:21 PM  
Insulting other states seems way beneath you, MarkM, and does not benefit anyone. I'm really disappointed as you seemed to be a generous person.
MaxB4
(Maine)

Posts:214


04/27/2021 1:40 PM  
Posted By MarkM19 on 04/27/2021 12:43 PM
Jeff,
Is that the best you got? Actually I was smart enough to leave Ca. 4 years ago before many figured it out just what a dump it is turning into.

Are all of the homeless camps starting new HOAs in Ca.?



You know Mark, I am believer in the 2nd Amendment, though not like the wack jobs out there, but IF I had a choice between walking by a group of homeless or a group of idiots with their AR-15 strapped to their chest, I will take the homeless every day of the week, and twice on Sunday.

Yes, California has issues, but so do all the other states in some form or another.
MichaelS56
(Minnesota)

Posts:181


04/27/2021 2:06 PM  
Bye Jeff.
MarkM19
(Texas)

Posts:790


04/27/2021 2:17 PM  
Kerry,
I apologize to the good people of California. I guess I was just doing a little tit for tat. I got stuck in a Rabbit hole with an A hole.
SheliaH
(Indiana)

Posts:3923


04/27/2021 2:36 PM  
Takes one to know one!

Besides, YOU were the who jumpstarted this with your question - if you were looking for a thoughtful answer, you should have been able to provide a few details. If you want a quick answer to what should be a serious question, this probably isn't the website for you, because most of really want to help. Doesn't mean we're always right. You can accept some, none or all of the responses you get.

Have a nice day!
MaxB4
(Maine)

Posts:214


04/27/2021 2:53 PM  
Posted By SheliaH on 04/27/2021 2:36 PM
Takes one to know one!

Besides, YOU were the who jumpstarted this with your question - if you were looking for a thoughtful answer, you should have been able to provide a few details. If you want a quick answer to what should be a serious question, this probably isn't the website for you, because most of really want to help. Doesn't mean we're always right. You can accept some, none or all of the responses you get.

Have a nice day!



Actually, people here made the answer more difficult than it should have been. The answer Jeff is looking for who be in his CCRs. It is quite simple. If a special assessment is not being used for funding, there is no state statue regarding membership approval.
AugustinD


Posts:313


04/27/2021 4:59 PM  
Posted By MaxB4 on 04/27/2021 2:53 PM
Actually, people here made the answer more difficult than it should have been. The answer Jeff is looking for who be in his CCRs. It is quite simple. If a special assessment is not being used for funding, there is no state statue regarding membership approval.
If the Board is adding a discotheque, among other things, and said discotheque is not a common element listed in the CCRs, then membership approval is required by way of amending the covenants.

Regarding communications: Maybe the challenge is asking for, and getting, details when the person clearly does not want to risk being identified by his HOA Board. This may be a vindictive Board with of course too much power to make his life miserable. I can understand not wanting to be identified.
MaxB4
(Maine)

Posts:214


04/27/2021 5:32 PM  
YOU keep saying that the something has to be a common element listed in the CCRs or the membership has to vote on it. Please cite the statue that backs up your theory or whatever you call it.

In Jeff's case, in order for the membership to vote on it, then it must say so in the CCRs. In the section I posted from the HOA I lived in, it only stated that the special assessment, if the source of the funding, had to be voted on by the membership. This would be rare case where the association has the funding without raising dues or creating a special assessment. It is legal to use funds originally earmarked for reserves to stay in operating and pay for the new project that way. The answer to Jeff's question lies in his own CCRs not on this forum.

So my qualifications will stand for themselves. I have been president of an HOA. I have been property manager in California managing over 120 properties of different types and sizes. I have owned a management company in California. I hold CMCA and AMS certifications from CAI and am working on my PCAM. I have attended HOA specific law reviews conducted in California twice a year for the past 12 years.

So Augustin, what do you bring to the table? Are you an attorney? Ever worked as a HOA property manager? Ever actually served on a Board? Or do we just surf the web looking for answers.
AugustinD


Posts:313


04/27/2021 5:37 PM  
Posted By MaxB4 on 04/27/2021 5:32 PM
YOU keep saying that the something has to be a common element listed in the CCRs or the membership has to vote on it.
Granted with a few caveats from California law.

You're dug into the position that a Board can spend money on anything it wants, regardless of whether it is listed in the covenants. You could give a da-- what the law of contracts says. You're posting grossly, disgustingly incorrect information here.



MaxB4
(Maine)

Posts:214


04/27/2021 5:56 PM  
Posted By AugustinD on 04/27/2021 5:37 PM
Posted By MaxB4 on 04/27/2021 5:32 PM
YOU keep saying that the something has to be a common element listed in the CCRs or the membership has to vote on it.

You're dug into the position that a Board can spend money on anything it wants, regardless of whether it is listed in the covenants. You could give a da-- what the law of contracts says. You're posting grossly, disgustingly incorrect information here.



WRONG....I posted this:

4.1.13 The Association has the right and power to prosecute or defend, under the name of the Association, any action affecting or relating to the Project or the personal property thereon, or any action in which all of the Owners have an interest in the subject matter of the action. Notwithstanding the foregoing, without the prior vote or written assent of a majority of the voting power of the Association, the Board may not institute any legal proceeding (including any arbitration or judicial reference proceeding) against any person or entity the cost of which could reasonably be expected to exceed Two Thousand Five Hundred Dollars ($2,500.00). In estimating the costs, the Board shall include all normal and customary court costs and attorneys' fees without regard to the possibility of recovering costs and fees if the Association were to prevail.

This passage from our CCRs stated that the Association had to get membership approval to litigate if the costs were to exceed $2500.00. This is what Jeff needs to look for in his CCRs. It is what the Association can and cannot do.

If I were managing or advising Jeff' Association, I would insist on surveying the owners to make sure the Board was working in the best interest of the owners.

Here is a cruel part. The CCRs will state that for a special assessment to pass it must be approved by a majority of owners in good standing after quorum is met. California statue only requires a majority of quorum. So you only need half of the normal votes.
MaxB4
(Maine)

Posts:214


04/27/2021 5:57 PM  
BTW, we fired the law firm, which was the second largest HOA firm in California and the management company for violating that section.
AugustinD


Posts:313


04/27/2021 6:06 PM  
Posted By MaxB4 on 04/27/2021 5:56 PM
Posted By AugustinD on 04/27/2021 5:37 PM
Posted By MaxB4 on 04/27/2021 5:32 PM
YOU keep saying that the something has to be a common element listed in the CCRs or the membership has to vote on it.

You're dug into the position that a Board can spend money on anything it wants, regardless of whether it is listed in the covenants. You could give a da-- what the law of contracts says. You're posting grossly, disgustingly incorrect information here.



WRONG....I posted this:
I could give a flying fig about what one set of covenants says. What the law of contracts and the statutes say is what counts.

Your position remains that the Board can spend money on anything it wants. It's wrong.
MaxB4
(Maine)

Posts:214


04/27/2021 6:18 PM  
Prove me wrong!
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Forums > Homeowner Association > HOA Discussions > Capital Projects - No Owner Approval



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