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Subject: Replacement of Archway
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Author Messages
JenniferG14
(Colorado)

Posts:4


08/21/2021 6:58 AM  
In 2006 an archway with our logo on it was erected at the third entrance to our RV resort. It was paid for by donations from people living on the streets close to the entrance. In June we noticed that the archway was leaning and the wood logs were rotting. It was removed at a cost of $911.00. The board president believed that the replacement of the archway was a maintenance expense and received bid from $10,000 to $12,000. We have a limit of maintenance expenses set at $2,000 without having a vote at the annual meeting. He then found someone who said he could rebuild it for $7,000 and the president gave him $3,500 up front. It turned out that the individual was a con man wanted in several states. He was not bonded, licensed, or insured. The money and the man are now long gone and the police are attempting to locate him but offer little hope of recovering the funds. That prior board still wants to replace the archway. It was not fully researched with no bids presented and was brought up at the annual meeting without a motion or discussion. The subject went directly to a vote and 51% of the eligible voters at the meeting approved the archway expense. It was only on the proposed budget for the $3,500 remaining from the original quote of $7,000. The new board elected at that annual meeting believes that the expense is too costly and that it should be considered a capital improvement expenditure and therefore requires 85% of the people at the meeting to approve it. They believe it should be replaced by donations from those living in the area who use the entrance and not use the HOA funds as 2/3 of the lot owners never use that entrance. What are we supposed to do?
Thank you
Jennifer Gehr
JohnC46
(South Carolina)

Posts:11665


08/21/2021 8:26 AM  
Jen

My first blush is repair/replacement should have been in and paid from Reserve Funds. Especially if the repair/replacement is near identical construction.
MichaelS56
(Minnesota)

Posts:300


08/22/2021 11:36 AM  
John is correct. An item such as that is part of the Replacement Reserve budget not operating. By the way did the rest of the board vote to give this "con man" the mone?
TimB4
(Tennessee)

Posts:17852


08/22/2021 7:28 PM  
Jennifer,

Once the archway (entrance monument) was accepted by the Association, it became the Associations responsibility and, as others have said, should have been included in any reserve study.

I also agree that it is a maintenance/repair expense and subject to your Associations procedures for such actions. Typically, this includes the fact that it's a shared expense. Note: if the Board does accept donations, that would likely be taxable income.

As for the $3,500, it was an expensive lesson to learn that procedures need to be followed and contractors need to be vetted.
JenniferG14
(Colorado)

Posts:4


08/23/2021 6:32 AM  
Thank you for your responses. It is an expensive lesson to learn and a reminder to all who are upset with this cost to either show up at the annual meeting or give your proxy to someone who will vote according to your interests. Again, thanks for the input.
Jennifer
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Forums > Homeowner Association > HOA Discussions > Replacement of Archway



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