Capital improvement fund and resale disclosure fee
The homeowners of SunBird Golf Resort will be asked to vote on amendments to the CC&Rs in January 2015. Each amendment will be voted on separately.
In order to ensure everyone has an opportunity to understand the issues, a different amendment is being addressed each month in the SunBird News. This month we will discuss fees charged to first time home buyers in SunBird.
In 2012 the HOA Board of Directors revised Policy No. 9, “Capital Improvement, Funding and Account,” to state as follows:
The Capital Improvement Fund account was approved October 27, 2008.
The purpose of this account is to save money for funding capital improvement projects as approved by the Board of Directors. The primary funding of this account is from the Capital Contribution Fee assessed to all new SunBird home buyers. This fee amount is $1,000 with $750 allocated to the Capital Improvement Fund and $250 to the Special Projects Fund.
Capital Improvements are defined as any new improvement or remodel project that costs more than $50,000. The HOA Board may maintain a Capital Improvement Account and adopt a payment program to fund this account each year. The funds received shall be deposited in a separate account with (sic) FIC insured institution.
This policy (sic) revised policy will go into effect January 1, 2013.
The Board proposed that the intent of this policy be added to the CC&Rs to ensure that all new home buyers are informed of the purpose and distribution of these funds. Ekmark & Ekmark, the legal firm representing SunBird Golf Resort HOA, recommended two changes:
1. Fees
It is not a good idea to attach dollar amounts to fees described in the CC&Rs because, while circumstances may change, this document can only be changed by a vote of the membership. The Board should have flexibility in establishing fee rates “from time to time.”
2. Special Projects
Capital Improvements include Special Projects. If they are not defined in the CC&Rs then the Board has the flexibility to adjust the amount and purpose through a policy change which only requires a vote of the Board.
Therefore, the proposed amendment reads:
6.7(B) Contribution to Capital Improvement Fee
The Board, in its sole discretion, may charge a Contribution to Capital Improvement Fee (“CCIF”) to all Owners upon acquiring a Lot within the Premises. The amount of the CCIF shall be established from time to time by the Board. Except as otherwise set forth herein, the CCIF shall be considered a membership fee in the Association and shall be charged upon each purchase of a Lot. The CCIF shall not be required of a present Owner who sells their present Lot and purchases another Lot within the Premises, so long as such Owner only owns one Lot within the Premises. The Board may adopt rules governing this exception. The CCIF shall be collectible at the close of escrow and shall be subject to the same lien rights as the Assessments. The funds received shall be deposited in a special account with a responsible depository and may be in the form of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, and FDIC insured institution or the United States of America. The CCIF shall be used for maintenance, repair, replacement, or capital improvements of the Common Areas or other areas that benefit the Association, but shall not be used for any work on any portion of any Lot. Payments made pursuant to this Section shall be nonrefundable and shall not be offset or credited against or considered as advance payment of the Annual Assessment or any other Assessments levied by the Association pursuant to this Declaration.
A yes vote means:
1. Current Board policy and practice will now be included in the CC&Rs.
2. The Board has the flexibility to change the amount of the fees as necessary.
3. Following the recommendation of our lawyers.
A no vote means:
1. The HOA should find alternate methods, such as additional homeowner assessments, to fund Capital Improvement Projects because the statement is a policy rather than a restriction.
In 2012 the HOA Board of Directors revised POLICY No. 19, “Resale Disclosure Statement and Contribution,” to state as follows:
Beginning January 1, 2012 the Resale disclosure fee shall be $400. A contribution to the Capital Improvement Fund shall be paid for by all new buyers of a home in SunBird equal to the HOA Board designated dollar figure, which may be reviewed and revised on a periodic basis. Current SunBird residents who sell their present home to purchase another home in SunBird will be exempt from the contribution to the Capital Improvement Fee.
The Board proposed that this policy be added to the CC&Rs to ensure that all new home buyers are informed of the purpose and distribution of these funds. Ekmark & Ekmark have proposed a statement which reflects statutory law:
The Association shall charge a Resale Disclosure Fee on new members governed by the Association in accordance with A.R.S. 33-1808(C). This fee shall be used for the purposes set forth in the law, and the amount charged shall be in accordance with the law.
A yes vote means:
1. Current Board policy and practice will be stated in the CC&Rs.
2. Following the recommendation of our lawyers.
A no vote means:
1. If state law were to change, the HOA could be required to cover disclosure costs from the budget because the statement is policy rather than a restriction.
View this amendment on page 12 of the Amended, Restated and Consolidated Declaration of Restrictions for SunBird Golf Resort Homeowners Association, Inc. on the website at www.sunbirdhoa.com.