Regarding the Special Assessment vote on August 9, 2007, two issues concern me.
First, I believe the Special Assessment proposed is in violation of the CC&Rs. Whereas CC&Rs paragraph 2.4.3 provides for the repayment of funds to the Declarant ?“?…for maintenance in excess of the Annual Assessments,'' CC&Rs paragraph 2.4.3 does not provide for the establishment of a reserve fund. CC&Rs paragraph 2.4.2 explicitly states that reserve funds are to be established through the Annual Assessments: ?“The Board of Directors may set aside part of the Annual Assessments as a reserve for the replacement of Common Area facilities, Common Facilities, and Drainage Area(s).?” CC&Rs paragraph 2.4.4 only provides for a Special Assessment to defray, ?“?…in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of a capital improvement on or which is a part of the Common Facilities, Drainage Area(s), or Common Area?…?” This statement implies that the construction, reconstruction, unexpected repair, or replacement has already been accomplished, as opposed to events that may occur in the future, since the reserve fund for future expenses is established in CC&Rs paragraph 2.4.2.
Per CC&Rs paragraph 2.4.3, the establishment of the reserve fund through the Annual Assessments would levy an assessment on an Unimproved Lot that is one-fourth (1/4) the Annual Assessment for Improved Lots. Therefore, I believe it is in the right of the Board of Directors to hold a vote regarding a Special Assessment levied equally upon each lot in the development to collect a total of $24,000, but the reserve fund needs to be established through a change in Annual Assessment, per CC&Rs paragraphs 2.4.3 and 2.4.5.
Second, the correspondence did not include any recent budget information. I would expect that a vote to repay the Developer and establish a reserve fund would set forth the current budget showing assessments received and itemized expenses paid and future expenses. Without this information, members of the HOA cannot determine proper management of the collected assessments or actions of the Developer.
I recommend the August 9, 2007, Special Assessment meeting be held to vote on the collection of $24,000 to repay the developer (after current budget information if furnished to HOA members) and to establish a date to vote on the increase of the annual assessment to establish a reserve fund.
By Ted Conklin
First, I believe the Special Assessment proposed is in violation of the CC&Rs. Whereas CC&Rs paragraph 2.4.3 provides for the repayment of funds to the Declarant ?“?…for maintenance in excess of the Annual Assessments,'' CC&Rs paragraph 2.4.3 does not provide for the establishment of a reserve fund. CC&Rs paragraph 2.4.2 explicitly states that reserve funds are to be established through the Annual Assessments: ?“The Board of Directors may set aside part of the Annual Assessments as a reserve for the replacement of Common Area facilities, Common Facilities, and Drainage Area(s).?” CC&Rs paragraph 2.4.4 only provides for a Special Assessment to defray, ?“?…in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of a capital improvement on or which is a part of the Common Facilities, Drainage Area(s), or Common Area?…?” This statement implies that the construction, reconstruction, unexpected repair, or replacement has already been accomplished, as opposed to events that may occur in the future, since the reserve fund for future expenses is established in CC&Rs paragraph 2.4.2.
Per CC&Rs paragraph 2.4.3, the establishment of the reserve fund through the Annual Assessments would levy an assessment on an Unimproved Lot that is one-fourth (1/4) the Annual Assessment for Improved Lots. Therefore, I believe it is in the right of the Board of Directors to hold a vote regarding a Special Assessment levied equally upon each lot in the development to collect a total of $24,000, but the reserve fund needs to be established through a change in Annual Assessment, per CC&Rs paragraphs 2.4.3 and 2.4.5.
Second, the correspondence did not include any recent budget information. I would expect that a vote to repay the Developer and establish a reserve fund would set forth the current budget showing assessments received and itemized expenses paid and future expenses. Without this information, members of the HOA cannot determine proper management of the collected assessments or actions of the Developer.
I recommend the August 9, 2007, Special Assessment meeting be held to vote on the collection of $24,000 to repay the developer (after current budget information if furnished to HOA members) and to establish a date to vote on the increase of the annual assessment to establish a reserve fund.
By Ted Conklin
