Lien

Posted in: Brunswick Place
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  • dleslie
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Respectfully Disagree

GFB:

I respectfully disagree with you on this one. The governing documents are not specific to what can be included in a special assessment. They only allow for ''...defraying in whole or in part, the cost of any construction .... of a capital improvement upon the common area ...''. The legal assessment was instituted as a way to keep track of each assessment so that each could be accounted as needed. The legal assessment helped defray the cost burdened by the HOA general account and/or ditch account.

While the documents do not specifically say that legal fees are an acceptable assessment, they also do not say that hiring any other trade and/or professional is acceptable. It would seem that ANY measure that could defray the cost would be acceptable. I think that is why the document is loose.

Lets say for example, the HOA wanted to build something in the park (say for talking purposes, a club house). We could go hire a contractor to go build something. But before we hire a contractor, we would hire an architect, attorney, engineer, etc. All of these professionals would be hired to accomplish specific tasks geared toward the goal of building the club house at the best price possible; all of which DEFRAY cost.

Perhaps a change to the CC&R's is needed for clarity. Are you a member of the HOA? If so, perhaps you would volunteer to review the CC&R's for possible amendments.
& again I respectfully disagree

==
And therein lies the problem.

I have actually encountered this exact same issue in another homeowners association, which is why I am trying to alert you to the issue. The judge deemed the special assessment for legal fees not allowed under the CC&Rs as written, which were almost identical to the ones you have.

The liens were dismissed. The assessments that had already been collected had to be returned for any resident who did not waive the return. Fortunately only a very few had to be returned.

I am not a member of your HOA, but a board member of another one. And we have amended our CC&Rs as follows to prevent special assessment purpose issues in the future:

Section 5. Purpose of Special Assessments.

(a) The special assessments levied by the Residents Association shall be used in particular for improvements deemed necessary, including but not limited to, the cost of repairs, replacements and additions, the cost of labor, equipments, materials, management and supervision, payment of taxes assessed against the common area on the improvements if required, the procurement and maintenance of additional insurance as may be required, in accordance with the Bylaws, the employment of attorneys to represent the Residents Association when necessary and such other needs may arise.

By gfb
reply to David

I duplicated this here in case the other got lost:
==
And I respectfully disagree. And therein lies the problem.

I have actually encountered this exact same issue in another homeowners association, which is why I am trying to alert you to the issue. The judge deemed the special assessment for legal fees not allowed under the CC&Rs as written, which were almost identical to the ones you have.

The liens were dismissed. The assessments that had already been collected had to be returned for any resident who did not waive the return. Fortunately only a very few had to be returned.

I am not a member of your HOA, but a board member of another one. And we have amended our CC&Rs as follows to prevent special assessment purpose issues in the future:

Section 5. Purpose of Special Assessments.

(a) The special assessments levied by the Residents Association shall be used in particular for improvements deemed necessary, including but not limited to, the cost of repairs, replacements and additions, the cost of labor, equipments, materials, management and supervision, payment of taxes assessed against the common area on the improvements if required, the procurement and maintenance of additional insurance as may be required, in accordance with the Bylaws, the employment of attorneys to represent the Residents Association when necessary and such other needs may arise.

By gfb
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  • dleslie
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reply to gfb

Thanks for your input on the language revision for our consideration. Our situation is different from your experience as our legal fees were directly connected to defraying cost as allowed in our CC&R's. I would agree with you IF the legal fees were not associated with, and/or directly connected to, defraying cost as allowed.
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