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Capital Improvement = ???

Our CCRs say that Capital Improvements must be items that are over $1,000 in value and have a life expectancy of 3 years or more. Fine.

But then they say this bizarre sentence, “Items of a like structure which are less than $1,000 when all such items are multiplied by the single value of the one like item shall be considered a Capital Improvement”.

Can you please give me a “dummies” translation of that sentence?… or an example as to how it is used?

Many thanks!

3 Responses

  1. dennisl

    This one is easy. If your association needed to replace all the street signs in the community and each individual sign cost $150 but there were 20 such signs. The total cost of the project would then be $3,000 and would satisfy the criteria for a capital expense.

    Dennis

    1. F1sh7

      Thanks, Dennis!… makes great sense… dunno why they write it so complicated… seems it could be written simpler.

      1. dennisl

        Lawyers write CC&R’s so that they can then interpret them to say whatever they want. Clarity in statute and clarity in governing documents are the attorneys worst enemies because it ties their hands, and they lose their ability to interpret those provision as positions in any way that they want.

        Dennis

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