Volume 1, Issue 1 A New Homeowner's Suprise
By Robert McConnell Productions
Home Owners' Associations
Volume I Issue 1
By Robert McConnell Productions
Introduction
Dear Homeowner,
This section is for everyone who is currently living in a homeowner’s association or thinking of buying a home which might be located in a homeowner’s association or in a development that has covenants but no association. We invite you to e-mail us with ideas that you have found helpful to improve meetings, interpret covenants, or places to go to get help with solving homeowner association problems. We will post those ideas to our page under this section. If you have a problem, e-mail us with your problem and we’ll try to help.
Robert McConnell Productions
YOUR HOME IS NOT NECESSARILY YOUR CASTLE
I vowed that I would never, ever buy a home in a homeowners association! I am a savvy parliamentarian that has been answering e-mails for the last five years from people all over the country with meeting problems. I know the problems that homeowners are having with their neighbors about who control "what" and "who" can make what decisions. I know that many people get elected to their homeowner’s association board and think they have now become king, dictator, ruler of the universe in their own little fiefdom, called "Canta Rana Estates", "Happy Hills Hollow", "Surf Beach Estates". These people believe that they do not have to answer to anyone or follow any rules but what they think they should do or what they think is the right way to approach things.
So now why am I currently living in this kind of an association and how did I get myself into this mess?
It’s very simple. It’s called moving quickly and letting your daughter find you the "perfect" home.
We wanted to relocate our business, Robert McConnell Productions, for the last few years and return to the West where we grew up. We also had to be close to an aging family member who needed our help. Several years ago when we were looking to relocate to Arizona, we discovered that most of all the neighborhoods we looked in had covenants. Our real estate agent was trained to fax us the covenants before we looked at a house. We never found anything that fit our needs for a house that included space for an in home business. So then we began to look in California. We were also aware that in California homeowner associations are very popular. But we didn’t find anything that met our needs there.
In January of 1999 a friend recommended Gig Harbor, Washington and a Realtor. Our daughter suddenly decided to pick up and move to Seattle area, in January too. So the Realtor found us some houses, our daughter became our eyes, and low and behold, the perfect house, with a perfect place for the business, and separate place for living, appeared on the market, at the right price. And it was a done deal. We moved in two and a half months of making an offer. Never did we think that it was in a homeowner’s association. Our Realtor never mentioned it nor did we get any documents at closing that stated we were in an association.
I didn’t find out about it until I called the owner about whether we wanted to buy the refrigerator and some other things. He casually mentioned the association in the conversation. I immediately replied, "This house is in a homeowner’s association? What does the association do? What are the dues?" He replied, "We plant flowers and have an annual picnic. The dues are twelve dollars a year." I thought, "I can handle this." After all I was in the middle of trying to sell the house in Indiana and get renters to stay in it for the summer while it was on the market. I had to pack, paint, settle affairs, write resignation letters to the organizations in which I was an officer and handle the business while Mr. McConnell traveled across the country to get set up in the new location. A homeowner’s association was not my priority.
(At this point, I want to thank my parents who are in the moving business who came out to Indiana to pack everything and help paint. I would never have been ready for the moving van if they hadn’t help. They also drove across the country with the dog and me. Thanks mom and dad!)
New neighbors – the president
After I arrived in beautiful Gig Harbor, unpacked boxes, set up the house and office, I then started asking neighbors about the Homeowner’s Association.
My next door neighbor, who had just bought his house, but had lived two doors down in a rental, knew the president and vice president. They both lived across the street! How convenient.
I was told that the association went defunct and that it had just re-organized. I had just missed the meeting where they elected new officers. But not to worry nothing was really happening.
I went over one day and introduced myself to "Mr. President’s wife". She was very cordial. She was even enthused when I told her I was a Registered Parliamentarian and was offering my services free of charge to help them get organized. I talked with her several times over the next few months. I asked for governing documents, but nothing was forth coming. I asked her to have her husband call me; I’d like to talk. It never happened.
One day I say him working in the yard. I went over and introduced myself to him. I was positive that he would rejoice to see me and certainly welcome my services. Wrong. He was aloof and assured me that everything was going fine and there would be no problems. Perhaps he would ask me to help at some future time. The end.
Summer passed into fall. We were enjoying being with family, visiting the mountains, and meeting new friends. December came. We had a family emergency to take care of and that started taking much of our time. Robert’s mother had a stroke and now it was our turn to help her out.
Then came January 2, 2000. We made it through Christmas, Y2K, and News Years. A letter arrived in the mail. It was from the Canta Rana Estates Homeowner Association. In it was our dues assessment. I discovered we had two lots. So now we had to pay double. It included a letter, which told how the board had been working through the fall to "revitalize" the association. It gave a brief back ground about the papers for the corporation not being filed for the last few years and how they had to hire an attorney to get them re-instated in good graces with the Secretary of State.
They then printed the annual budget and stated that the assessments were based upon the budget when ratified. They stated that the dues were due on January 1 (we didn’t get the letter until after the first) and that they would be delinquent on February 29, 2000. The letter also announced that there would be a meeting on February 15th at 7:30pm. They invited us to submit in writing any questions or items that we might want on the agenda. The letter was not signed by a person but just typed "Board of Directors".
My first reaction was -- what happened to the $12.00 dues? We were being assessed and we had no covenants, no bylaws and didn’t even know how to get them.
But my parliamentary training kicked in. I first started talking with neighbors. One woman that I was talking walks with regularly had a copy of the covenants and brought them for me to read. I made a copy of it. I immediately called the Secretary of State’s office and asked how much a copy of the cooperation papers cost. It was $10.00. I sent a request not only for the corporate papers but also for copies of the documents of the association’s re-instatement.
I then found out that Washington State has adopted codes concerning the procedures of homeowner’s associations. I was able to call the Revised Code’s office and request them free of charge. I was also told where to find the information on the WEB. But I still didn’t have bylaws.
After researching I found out in the covenants that the assessment they levied was not allowed without a membership vote. I also wrote to have my questions addressed at the meeting and requested bylaws from the association. I never heard a word.
I again went over and offered my services for the meeting. But I never received a response.
THE MEETING
The weekend before the meeting, we had to be in Montana caring for my mother-in-law. When we arrived home we found a notice on our door that the meeting had been changed to a different location. I was grateful that I found it. Another neighbor called to tell me that it had been moved.
When we arrived at the meeting, the board members (all four of them) were sitting in the front behind the table. The president wrote the names and phone numbers of the members of the board on the black board for all of us to write down.
I decided before hand that I was going to be quiet unless I really needed to say something. Wyatt Erupt and his brothers were more prepared for the show down at the Okay Corral than the president and his crew. He knew there was going to be trouble by some of the letters and telephone calls that he received, but he wasn’t prepared for the explosion that took place at the meeting.
Normally I would have tried to help and bring peace but I was quiet because I thought the president needed to see first hand what could happen when the board itself doesn’t follow the rules.
Those who have been to these kinds of meetings have experienced first hand what happened. One man was very irate. He was told the association was defunct and that is why he bought his house. He had been in a homeowner’s association and did not want to be in another! He kept the meeting very interesting.
I questioned the board’s ability to charge the assessment and was told it was correct. The budget was never ratified and the meeting ended about 9:30pm, which we were told in the letter that was the time they planned to adjourn. Nothing was settled; nothing was voted upon.
Most of us left with questions unanswered and the assessment unresolved. During the meeting I made it known that I was a Registered Parliamentarian. Several members came up to me afterwards asking questions. I got the address and telephone number of one couple who had lived in the development from the beginning. The next day I paid her a visit and she gave me a copy of the bylaws. I now had all the documents.
I discovered that since the board had gone defunct the last budget in place according to state law was the one adopted in 1994. The assessments were at that time were $30.00. The covenants stated that the board could not increase the assessments more than 5% without a vote of two thirds of the members voting in person or in proxy. The state codes state that the budget must be ratified by the members at a meeting. If it is not ratified then the previously adopted budget is in continuation until the board submits another budget to be ratified by the members.
Since we didn’t get to ratify neither the budget nor vote on the assessments, the board had no business charging us. I then found that the state codes allow 10% of the members to call a special meeting. Our bylaws state that it takes 25% of the members to call a meeting. But state law prevails. In working with the neighbor that gave me the bylaws, I composed a letter and designed a petition to call a special meeting to ratify the budget and vote on the assessment. Together we got one third of the member to sign the petition in a few days. Many of the people who live here are renters. Many weren’t home when we knocked on doors.
The letter was sent to the president by certified mail, return receipt requested. A copy was sent by regular mail to the secretary. The letter gave them a 16-day deadline to reply to our requests.
The president’s wife wasn’t at home when the mail was delivered so they didn’t pick it up for several days. I kept going to my mailbox to see if the return receipt was there. Nothing. Finally, I called to see if they received the letter. The president’s wife told me the secretary called when she received her letter and they hadn’t gotten to the post office to pick up the official letter.
What has been most interesting during this entire process is that no one has ever contacted me to let me know they were considering the letter or passing it along to the attorney. The date that I gave for them to reply arrived. There was no letter. I waited for about a week and a half. One day I was out walking. I decided to knock on the door of the President’s wife. I asked her, "Is the board going to do anything about my letter?" She assured me that they had turned it over to the attorney and something was happening.
On April 5th, we received a letter addressing all the issues I had raised and a date for another meeting. On May 1, we will ratify the budget, vote on the assessments and elect board members. Now we’ll see how it’s all handled.
We will keep you up to date on the continuing saga of being a member of a homeowner’s association.
EXAMPLES OF LETTERS SENT TO THE ASSOCIATION
LETTER #1.
Janet S. McConnell
4303 67th Avenue NW ~ Gig Harbor, WA 98335 ~ USA
Phone 253-265-3499 ~ Fax 253-265-1550
January 27, 2000
Board of Directors
Canta Rana Homeowners Association
PO Box 2494
Gig Harbor, WA 98335
Dear Friends and Neighbors,
In reading the Covenants of the association, Article III, Section 3. Maximum Annual Assessment, I’ve noticed a discrepancy between what the covenants state the Board of Directors can assess ($60.00) and the bill that we have received. ($65.00) Would you please explain this at the meeting that you are having February 15th?
I would also like to suggest that the Board set a day that we can have a "spring clean up" in the neighborhood. I’ve noticed beer bottles, pop cans, paper and general trash as I take my walks. Since there was no summer carry in perhaps we can have a get-together after the clean up.
As a new member of the association, I would like a copy of the bylaws, and a list of the officers of the association, their phone numbers and addresses. If there is a list of all the home owners I would appreciate a copy of that, too.
Since the Association is just re-organizing, I would like to offer my services to the Board as a Registered Parliamentarian with the National Association of Parliamentarians. I can help with such things as writing bylaws, following correct meeting procedures and putting documents together to meet the incorporation laws of the state.
I look forward to hearing from you. Thank you for your consideration of these matters.
Sincerely,
Janet S. McConnell
LETTER #2.
Members of Canta Rana Estate Homeowners’ Association
Janet S. McConnell, Contact
4303 67th Avenue NW
Gig Harbor, WA 98335
USA
Home Phone 253-265-3499
February 28, 2000
Mr. John Doe, President
Canta Rana Estates Homeowners’ Association
4218 67th Ave. NW
Gig Harbor, WA 98335
Dear Mr. Doe:
Attached you will find a signed letter/petition from 42 members of the association who are requesting a special meeting to ratify the budget and set any assessment for over 5%. According to state law (RCW 64.38.035) it takes 10% of the membership, which would be 12 members, and according to our bylaws(Article III, Section 2) it takes 25%, which would be 29 members. (Our figures on based upon the letter the Attorney sent to the Secretary of State to re-instate the corporation which was 113 lot owners) Therefore, we have enough to have a special meeting and hope that you will consider calling it soon. Please see the third to the last paragraph of the attached letter for our other requests.
Mrs. Carol Krona and I have canvassed most of the neighborhood. We would like to share with you the most common remarks that we have heard.
1. There are those members who are happy that the association is back in action and hope to see areas cleaned up in the neighborhood. Only two lot owners refused to sign the petition, even though they agreed with us, because they didn’t want to discourage the board from going forward with the association. One man has let us know that he wants to serve on the board.
2. Many of the people that signed were very concerned that they never received letters about the re-organization meeting held last year. They are also upset with the amount of the assessment. Many remember that the last assessment was $30.00 or have that figure in their recent closing documents. Many did not like getting a letter from a board with no signatures on the letter. Others were very disappointed not to have attended the meeting. One man, a former member of the board, was at the school at another meeting. When he went to find the Association meeting at the school, he could not find it. He later found out that it had moved. Somehow he didn’t get the notification of moving the meeting.
3. There are some homeowners that would like to dissolve the association’s corporation. Some would like to have no organization at all; others would like to dissolve and start fresh with new covenants and new bylaws.
What we found to be most interesting was the isolation that members of our association feel. They don’t know each other and have many excuses why they can’t meet their neighbors. Everyone that we talked to thanked us for taking the time to stop by and explain what was going on in the association and for taking an interest in it.
What I would like to see is for the board members to take more of an interest in building a sense of community first. I believe if the board members would take the time to do what Carol and I have done the board will see that many people want to help. Many have good suggestions about how to improve things.
I was a member of an organization where the president went to all the interest groups and talked to the members about the goals of the organization. A very controversial issue was solved this way so at that meeting everything went harmoniously. May I suggest that you ask different people in the neighborhood to have a coffee meeting where they invite in the other neighbors to meet the board. Talk to them about the association and why it is necessary. Let them get to know you and let them see that you have only the best interest in mind for everyone. And, let them know that you don’t have a hidden agenda. (We did hear complaints like this just like at the meeting.)
Again I am offering my services to help get things organized. One of the things that I am concerned about is how the organization is going to handle proxy voting. I see many organizational things that need to be done, and again I am willing to help in any way possible.
Sincerely,
Janet McConnell
LETTER # 3
Members of Canta Rana Estate Homeowners’ Association
Janet S. McConnell, Contact
4303 67th Avenue NW
Gig Harbor, WA 98335
USA
Home Phone 253-265-3499
February 23, 2000
Mr. John Doe, President
Canta Rana Estates Homeowners’ Association
4218 67th Ave. NW
Gig Harbor, WA 98335
Dear Mr. Doe:
We, the undersigned, are writing to you concerning the dues assessment that the Board of Directors sent to the membership in January. The question concerning the Board’s right to assess $65.00 was not answered to our satisfaction at the business meeting Tuesday, February 15, 2000. We are also concerned that the State Laws concerning Home Owner Associations, RCW 64.38, have not been followed concerning adoption of the budget, and Board meetings have not been open to the members.
RCW 64.38.025 states that after the Board adopts a budget, it is to be ratified by a majority vote of the members of the association at a meeting called to consider the budget. Since this has never happened (and refer to the statement in your letter of December 22, 1999, that "when ratified, this budget will amount to an annual assessment of $65 per property".), we don’t understand how any assessments can be charged by the Board since the members have not ratified the budget. The state laws say that if a budget has been rejected by the members, then the budget last ratified by the members shall continue "until such time as the owners ratify a subsequent budget presented by the Board of directors." Since no budget has been ratified by the members, it is logical that the last budget that would be in effect is the one from 1994, which was the last time dues were assessed to the members.
Mr. and Mrs. Roland Krona have been members of the association since 1978. They have the receipts of the last assessments from 1990 - 1994, please see attached. During these years, the assessments were set at $30.00. There was no change during those four years.
After carefully studying the covenants, and consulting with a Registered Parliamentarian who has worked with Homeowner Associations, Mr. Harold Corbin, it is our opinion that the Board can only raise the assessments 5% based upon the highest assessment set by the Board prior to the year 2000, which is $30.00. That would mean the assessment that could be charged at this time would be $31.50, unless two- thirds of each class of members voted to raise it.
Even though the covenants state that the maximum annual assessment can be $60.00, according to our research, the Board has not yet set the assessment at that figure. In Article VII, Section 3, (a) of the covenants, it states that the maximum annual assessment may be increased each year not more than 5% above the maximum assessment for the previous year without a vote of the membership. Since there was no assessment the previous year, the Board would need to look at the last year the assessment was charged which was 1994. The maximum assessment at that time was $30.00.
We would also like to point out that there is a conflict between the covenants and bylaws on who is to set the dues [assessments]. In the bylaws it states, Article VIII, Section1. "Membership dues shall be determined each year at the annual meeting of the members by 2/3 majority vote. Such dues shall be set at an amount which takes into consideration the expenses of this corporation for taxes and maintenance of corporate properties, and such other items as the Board of Directors and members shall determine from time to time."
We realize that the Board has just re-organized and perhaps has not had time to review all the documents of the organization. We also realize that the Board did not know about the Revised Washington Code concerning Home Owners Associations. What we are concerned about is that the Board of Directors hasn’t asked for enough input from the members of the association. We feel that at the meeting on February 15th many people showed an interest in participating in the decision-making processes of this association. It has come to our attention that there were several members of the association who wanted to attend the February 15th meeting, but had prior commitments and whose opinions were not heard. We hope that the Board will take this into consideration when making decisions.
We, the undersigned, request the following: first, we want a professional (legal) opinion regarding the dues and assessments. (If you don’t want to pay an attorney to do this, then call a meeting and let the members decide by vote what the documents mean.) Second, we are requesting that the Board call a special meeting of the membership in accordance with State Law to approve the budget and adopt any assessment increase above 5%. Third, we want to be notified of any future Board meetings, pursuant to an open meeting provision in (RCW 64.38.035 (2)) so that we can attend them if we so desire. And finally, we want to point out that the $65.00 assessment that we have been charged is more than a 5% increase of $60.00 from which the board has based its assessment.
It is our hope that we can all work together for good, and that all business of the association will follow the proper procedures according to the State Codes (RCW’s), the corporate charter, the covenants, bylaws of our association, and common parliamentary practice.
We would appreciate an answer in writing by March 15th, 2000.
Sincerely,
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NAME ADDRESS
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Attachment letter, Members of Canta Rana Estate Homeowners’ Assoc. 2/23/2000
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NAME ADDRESS
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