Attorney Review of Bylaws to guide Board on special assessment.
MEMORANDUM REGARDING SPECIAL ASSESSMENT
Governing Authority
The authority to levy a special assessment is governed by Article VIII, Section 1 of the Association’s By-Laws.
Each lot owner, by acceptance of deed, covenants and agrees to pay: annual assessments; and special assessments for capital improvements. All assessments constitute a charge against the lot and a personal obligation of the owner.
Authority to Levy Special Assessment, Article VIII, Section 6 – “Special Assessments for Capital Improvement”
The Association may levy a special assessment in any assessment year only for the purpose of defraying, in whole or in part, the cost of: Construction, Reconstruction, Repair, or Replacement of a capital improvement upon the common area, including fixtures and related personal property. The By-Laws do not authorize special assessments for general operating expenses.
Procedural Requirements for Adoption of Assessment
A. Meeting Requirement, Article VIII, Section 6.
The special assessment must be approved at a meeting called for the purpose of consideration of such capital improvement. A regular meeting not specifically noticed for this purpose does not satisfy the By-Laws.
B. Notice Requirement, Article VIII, Section 7
“Notice and Quorum for any Action Authorized Under Section 5 and 6”
Written notice must:
- Be sent by regular mail
- Be sent to all members
- Be delivered not less than 30 days and not more than 60 days prior to the meeting
- State that the meeting is called to establish a special assessment
C. Quorum Requirement, Article VIII, Section 7.
At the first meeting: Members present in person or by proxy must be entitled to cast 60% of all votes, in person or by proxy, of each class of membership.
If quorum is not achieved:
- A subsequent meeting may be called
- Same notice requirements apply
- Required quorum is reduced to one-half of the original quorum requirement
- The subsequent meeting must occur within 60 days of the preceding meeting
D. Voting Threshold, Article VIII, Section 6.
Approval requires consent of two-thirds (2/3) of the voting interest of the members who cast votes. The By-Laws require two-thirds of those voting — not two-thirds of all members.
Billing and Enforcement
A. Billing and Due Date, Article VIII, Section 1.
Assessments are billed annually. Due within 30 days after billing. Late payment fee applies
Summary of Steps for Valid Adoption of Special Assessment
To establish a valid special assessment under the By-Laws, the Association must demonstrate:
- The assessment was for a qualifying capital improvement (Art. VIII, §6).
- A meeting was properly called for that purpose (Art. VIII, §6).
- Written notice was mailed 30–60 days prior (Art. VIII, §7).
- Proper quorum was present (Art. VIII, §7).
- Two-thirds of votes cast approved the measure (Art. VIII, §6).
The required numbers for a quorum for the HOA.
For any assessment, would need a special meeting with votes cast of either in person or proxy votes equal to 60% (quorum) of 414 lots or 248.4 (rounded to 249).
- Use the number of 249 votes
- Of those votes 2/3 of 249, or 164.3 votes (rounded to 165) would need to be yes, for the vote to pass.
If there was not a quorum 249 votes at first meeting, then a second later meeting could be scheduled.
New numbers for a second special meeting:
- New quorum 50% of 249 or 125 rounded.
- 2/3 yes votes required to pass would be 82.5 rounded to 83 yes votes.