HOA assessments not benefitting all homeowners; state of NC

[Greg P.]

Hello all - I thought I would come to this community for advice on a matter that has been a problem in a neighborhood I own two properties in for over 5 years. This is in the state of NC.

Situation: I own two properties in a "cluster home" community (detached, ~1,200sf homes built in late-80s / early-90s). We have a fairly active HOA with very opinionated, headstrong leaders - I would go so far as to say some are borderline bullies. I live in one home, rent out the other.

~60 homes in the community. 45 homes have wood decks, 15 do not. Many of the decks are original (upwards of 30 years old) and need replacing. The house I live in does not have a deck, and the house I rent out has a deck that was repaired by previous owner, so it's only a few years old.

Problem: HOA wants to assess everyone in the community to build new decks ($4,000 to $5,000). I, and many of my neighbors, will not benefit in any way from this assessment, either because our houses don't have a decks or folks have been frustrated with the HOA and paid out of pocket to replace theirs.

HOA plans to force this through. I'm not sure how, as assessments require a vote, and most people don't show up to the meetings. The HOA has also done some unethical things, including building new decks for almost all of the HOA board members using funds from dues (no assessment from any of these owners) while leaving everyone else wondering if they repair their own decks will they get hit with a $5K assessment in a year or two. As a result, people are waiting to do anything with their decks - many of the decks look awful, and yes, some pose serious safety issues.

Questions: Can the HOA legally force everyone in the neighborhood to pay, even those who will receive no benefit from the assessment? HOA leadership is positive they can do this. What are our options as owners who will receive no benefit from the assessment? What legal instruments exist to prevent this vote from going through? Are there any lawyers in this community who would be able to represent the homeowners in this situation?

Thank you!

[Richard F.]

Aloha,

You need to examine your project's Declaration. This spells out what elements are owner responsibility, and which are HOA responsibility. It is likely also that different units have a different percentage of "common interest", which affects what you are charged for monthly fees and assessments. You indicate a substantial difference in construction types for the units, so I would certainly expect to see different percentages.

You also mention some owners have made their own repairs due to frustration with HOA. This, along with the fact they are talking about a Special Assessment, would indicate to me that the HOA has inadequate financial reserves and has simply failed to plan for the replacement of the wooden decks. This is a failure of the Board, and it is very likely they could be held personally responsible if they have not followed the mandates in their By-Laws and Declaration. It is quite common for Boards to NOT increase monthly fees over many years, to keep those fees low, but in doing so they are not funding the statistically expected repair or replacement of ALL common and limited common elements...which is their #1 Job.

You should receive annually a year end financial report, and an Operating Budget and Reserve Funding Plan for the upcoming year. Learn how to interpret these, especially the Reserve Funding Plan, as it will reveal the need for future Special Assessments.

Homeowners need to attend Board meetings periodically to ask questions and ensure the Board IS following their own Governing Documents AND all laws. When no one attends meetings, Boards often take the attitude that it is "their" HOA and they can do whatever they want. This is simply not the case.

I recommend you check for a local chapter of the Community Association Institute. They have a lot of resources and local information for HOA Boards AND Owners on operating an HOA.