. Here are the
topics
and
highlights of the meeting. Reminder: All association
members are invited to attend these regular Board meetings.
Agenda
1. Call for a quorum of Directors --> Attending: Jeanine
Balsis, Claudia Quehl, George Sinclair, Art
Stadlin, Mike
Theoret, Pat Whitesel. Absent: Nancy
Maloney
Other Attendees:
Harmony
Management -- Jerry Lemerise,
Manager
Porges Hamlin Knowles Prouty -- Stephen Thompson, Esq., Richard Weller, Esq. (absent)
Other interested residents of Hawthorn
Park
2. Introduction of
guests
3. Opening statement - reason for meeting -> The purpose of the meeting was to
discuss rental restrictions with legal council, and directly related
issues.
4. Report on survey results
Taking a survey is not a required
prerequisite for Association action. However, the Board decided
to get the "pulse" of the community prior to embarking on a costly
process to amend the HOA documents. The tally of the
rental surveys shows a strong preference for a restriction on rentals,
with the one year minimum lease as the favored option. 77 members
(84%) responded (many thanks to all phase captains for the huge
response).
#1 - 21-1/2* (28%) no rentals
#2 - 39-1/2* (51%) one year
#3 - 12
(16%) 6 months + 1 day
#4 - 3
(4%) no change
#5 - 1
(1%) write-in 1 month
*voted for more than one option.
MOTION: A
motion was made to amend the HOA documents to restrict rentals.
The motion passed unanimously by Board members present.
5. Proposed
amendments to C&R, Bylaws
- Minimum rental period
- Term of Directors
- Fences
- Assessments & Fines
6. Board discussion with attorneys [Editor's
Note: This section is organized by topic to aid in future
reference, and not always in the sequence things came up at the meeting.]
RENTAL RESTRICTIONS Q&A:
Q: How quickly could the change become
effective?
A: Relatively quickly, assuming there
is consensus on the Board, a majority of Association members, and the
rental restriction is unburdened with other more complex intentions of
amendments. It typically takes 4 to 6 weeks after the Association
vote.
Q: How would "grandfathering" work?
A: In a situation where an existing
lease does not conform to the new restriction, the current tenant is
grandfathered. Bookings and reservations for future rentals are
not grandfathered. After the current tenant's lease terminates,
the homeowner must abide by the new restrictions.
Q: Should the Board institute
"approval" procedures for renters?
A: It is recommended that there
be a tenant application made to the Board, a background check, an
application fee, and a security deposit to the Association. The
purpose of the security deposit is to cover the payment of fines should
the tenants fail to follow the rules of the community.
Q: Should we include a provision
for "exceptions"?
A: No, unless the exact and
specific circumstances for an exception are defined in the HOA
documents. And since this is difficult given the wide
possibilities that might trigger a desire for an exception, it is
recommended that there be no provisions for exceptions.
Q: Should we incorporate wording
that distinguishes between "owners" and "investors"?
A: No. Every investor is
and owner.
Q: Do we need a meeting to vote
on new amendments or just a written vote?
A: Yes, you need a
meeting. It is critical to avoid procedural defects. Proper
notice must be given by US Mail, written ballots, limited proxies, and
exact wording of the amendment(s).
Q: Who will prepare the ballots
and proxy statement?
A: [Note from editor: This is my
understanding. Please e-mail me any corrections.]
Legal
wording of the Amendment -- PHKP, with review by the Board
Limited Proxy Statement -- PHKP, with
review by the Board
Cover Letter in the mailing notice of
Special Meeting -- Jerry Lemerise, with input from Board
Ballot -- PHKP, with review by the Board
Copying and Mailing -- Harmony
Management
Collection of Ballots -- Harmony
Management
Q: Will we vote separately for
each amendment?
A: Yes, that would be wise.
Q: Should the Board suggest on
the ballot how Association members should vote?
A: No. However, the Board
may be persuasive in the cover letter for the mailing.
Q: How would the Board detect
that a rental situation is going on?
A: It's almost always the
immediate neighbors who detect the situation and make the Board aware.
Q: Can investor-owners who rent
bring a lawsuit against the Association? And will this create the
need for special assessments to cover the Association's legal fees?
A: Sure, anyone can sue anyone
for anything. And mounting a defense has costs. But it is
unlikely so long as the changes to the rules are done legally and all
due process is adhered to. The HOA is fully within their rights
to change the rules of the community.
Q: How will incomplete leases be
handled, e.g., the case where 1-year leases never seem to have tenants
staying full term?
A: The amendment can be worded
such that only one lease may be entered into during each calendar year,
for example. Also, consider making it against the rules to
sub-lease.
Q: How will we detect and stop
disguised rentals, e.g., "I'm not renting. I'm the owner's
ex-wife's brother-in-law twice removed."? Some associations
require an official list of immediate family, who are the only ones
allowed to stay in the home.
A: Some associations have a
guest provision that requires that the homeowner be in residence when
guests are using the house. Note that the definition of "family"
continues to evolve, and it is not advisable to key the rules to family
since it can be ambiguous.
TERMS OF
DIRECTORS Q&A:
Q: What do most other communities do?
A: Most other communities have
staggered terms to ensure continuity of Directors from year to year.
Q: How does it usually work?
A: In the annual election of
Directors to the Board, the top 2 or 3 (must decide) vote getters are
elected for a 2-year term. Others with fewer votes are elected to
1-year terms. In the event of a tie for last place, usually one
of the candidates will politely bow out. However, if they don't,
or if there are other oddball and ambiguous situations, a decision will
need to be made as to whether a run-off election is required, or if the
Board may simply make an immediate decision.
Q: Is this kind of amendment
difficult to execute?
A: No, it's a no-brainer.
FENCES Q&A:
Q: What do most communities do?
A: Most communities have an ARC
that establishes standards, and is fair, uniform, and consistent in the
enforcement of those standards. Some communities will include in
their HOA documents certain fence types or materials that are expressly
prohibited, such as chain link fences.
ASSESSMENT OF
FINES Q&A:
Q: Is our Article VIII, 8.14, (c)
legal? It says that fines levied by the Board against an Owner
shall be added to the Owner's annual assessment.
A: No. As a consequence of
the flag pole incident on the East Coast and Jeb Bush's sympathy with
the homeowner in that case, the Florida legislature has seen fit to
change the statutes such that fines are not collectable through liens
and foreclosures. The new law only applies to fines and not
assessments. Failure to pay assessments is still enforceable
through liens and foreclosure action.
Q: How do HOAs impose fines
going forward?
A: There is a new process
allowed by the State, known as a "Fining Committee." Since this
is new, Hawthorn Park should consider including it in the HOA documents
and implementing such a committee. The Fining Committee judges
the merits of the situation, offering a hearing with the fined
homeowner. If the homeowner fails to find relief and satisfaction
from the Fining Committee, they may take their case to Arbitration with
the State.
Q: Once a fine is levied, how is
it collected?
A: The Owner is billed. If
the owner does not pay, the Property Management Company (Harmony) will
not issue the required paperwork at the real estate closing when the
house is attempting to transfer ownership, which will make it
impossible for the Title Company to transfer title. The fine(s)
are then paid in full.
Q: Is there a State limit on
fine amounts?
A: Yes.
Q: Can our HOA documents simply
be worded something like, "The fine for XXXX is the highest amount
allowed by law"?
A: Yes.
Q: Would the members of the
Fines Committee be held harmless via insurance against lawsuits?
A: Yes, they should. This
is something that should be investigated to ensure coverage of all
Directors and Committee Members. There may be added cost for
added coverage.
Q: How is it possible to collect
fines from citizens and investor-owners in foreign countries?
A: Consider putting in place a
home owner security deposit requirement to handle this problem.
Remember that security deposits against homeowner fines will require
that all homeowners anti-up the same security deposit.
Q: Is it required that interest
be paid on security deposits?
A: No. Just make that
clear in the documents.
RELATED Q&A:
Q: What would it cost to completely
scrub our HOA documents, taking out reference to the builder and other
outdated references?
A: Not difficult. Probably
would cost between $1,000 and $2,000. Once scrubbed, it would be
framed as a Restatement, and would need to go through the extensive
voting process used for Annual Meetings.
Q: Could noise be addressed in
the HOA documents?
A: This could be addressed by
establishing a "Quiet Period" during each day. However, recognize
that noise is sometimes a judgment call or may require decibel
meters. Of course, some noise cases are quite clear, such as loud
pool parties at 2:00am.
Q: What gives the Board and the
Association the right to change the rules?
A: The law allows it.
Rules can be changed through due process.
Q: What exactly is the process
sequence to get the Amendments done?
A: Outline of the steps:
a)
Board provides written intent of each amendment
b) Rick Weller (PHKP) will draft the
legal amendment(s)
c) Board will review legal amendment(s)
d) PHKP will finalize the legal
amendment(s)
e) PHKP will prepare the Limited Proxy
and the Ballot
f) Cover letter written, mailing done
g) Special meeting
h) Assuming it passes, Certification
of Amendment to be executed by PHKP
i) Informative mailing to all Owners
MOTIONS:
+ It was moved that the Board move swiftly to amend our HOA documents
to include a rental restriction and overlapping terms. The vote
was unanimous. It was decided that other issues, such as Fines
Committee and Noise rules will be addressed later due to their
complexity. It appears there is no longer an intention to change
anything in the HOA documents with regard to Fences, as we have a
functioning ARC with uniformly applied standards.
+ It was moved that the Porges Hamlin Knowles Prouty law firm
be retained to support our implementation of the amendments. The
vote was unanimous. Next immediate step: The Board will
define and come to consensus on the specific intentions for both
amendments during the next week via e-mail.
