ARS Special Assessments for Capital Improvements
Our Bylaws state that Special Assessment for Capital Improvements may be done once a year with a majority vote of 67% or more and requires a special meeting with at least 60% of voting members. If a quorum of 60% isn’t at the first meeting a second special meeting requiring at least 50% voting members may be held within 60 days.
Is there anything in the ARS that would contradict any part of this?
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Susan,
Currently, no. But I would advise you to read the exact language of your governing documents very carefully. Typically, a special assessment must be approved by a supermajority of all votes in the association. Quorum requirements do not apply to such votes. If you want to send me the exact language of your governing documents, I can provide better guidance. In this session, I will propose legislation that will standardize the approval requirements for special assessments and loans for these communities.
Dennis
Thank you! Here is the verbiage:
In addition to the annual assessments authorized above the association, may levy in any assessment year a special assessment applicable to that year only for the purpose of defraying in whole or in part the cost of any construction, reconstruction, repair, or replacement of a Improvement upon the common elements, including fixtures and personal property related there-to provided that any such assessment shall have this assent of 67% of the votes of each class of members who are voting in person or by proxy at a meeting duly called for that purpose. Written notice of any meeting called for the purpose of taking an action authorized under the section shall be sent to all members not less than 10 days nor more than 50 days in advance of the meeting at the first meeting, called the presence of members or of the proxies entitled to cast 60% of all the votes of each class of membership shall constitute quorum. If the required quorum is not present, another meeting may be called subject to the same notice requirement and the required quorum at the subsequent meeting shall be 1/2 of the of the required forum at the proceeding meeting. No such subsequent meeting shall be held for more than 60 days following the preceding meeting.
Susan,
This is very dangerous language that could result in a significant special assessment approved by a tiny population of the community. It is suitable for the association but awful for all the homeowners who must pay the assessment. In the first case, 67% of 60% of the community or 40.2 percent of the community is required to approve the special assessment, but if the 60% quorum is not achieved, then the approval requirement is only 20.1percent of the community. In situations like this, you must work hard first to make sure that the quorum is met for the first meeting and far surpassed as much as possible to ensure that at least 51% of the members get a say in the matter. That would require 75% of the population of the community would have to participate in the meeting to ensure that more than 50% of the community agrees to the assessment.
My proposed legislation would set a state limit of a majority of all eligible votes in the community as the necessary approval to apply a special assessment.
Dennis
Thank you so much Dennis!