Archive for the ‘real estate’ Tag
Image via Wikipedia
If passed, H.R. 2454 will affect many homeowners associations as it is common practice to prohibit solar panels (and other alternative energy devices) by private covenant, at least in Georgia. See below for the specific provisions of H.R. 2454.
The language in the bill is similar to the language in the FCC’s OTARD (Over the Air Reception Devices) Rule regarding satellite dish installation in the same context.
Stay tuned to see how this plays out and how it will affect the architectural approval process in homeowners associations.
H.R.2454
American Clean Energy and Security Act of 2009 (Engrossed as Agreed to or Passed by House)
——————————————————————————–
SEC. 209. PROHIBITION OF RESTRICTIONS ON RESIDENTIAL INSTALLATION OF SOLAR ENERGY SYSTEM.
(a) Regulations- Within 180 days after the enactment of this Act, the Secretary of Housing and Urban Development, in consultation with the Secretary of Energy, shall issue regulations–
(1) to prohibit any private covenant, contract provision, lease provision, homeowners’ association rule or bylaw, or similar restriction, that impairs the ability of the owner or lessee of any residential structure designed for occupancy by 1 family to install, construct, maintain, or use a solar energy system on such residential property; and
(2) to require that whenever any such covenant, provision, rule or bylaw, or restriction requires approval for the installation or use of a solar energy system, the application for approval shall be processed and approved by the appropriate approving entity in the same manner as an application for approval of an architectural modification to the property, and shall not be willfully avoided or delayed.
(b) Contents- The regulations required under subsection (a) shall provide that–
(1) such a covenant, provision, rule or bylaw, or restriction impairs the installation, construction, maintenance, or use of a solar energy system if it–
(A) unreasonably delays or prevents installation, maintenance, or use;
(B) unreasonably increases the cost of installation, maintenance, or use; or
(C) precludes use of such a system; and
(2) any fee or cost imposed on the owner or lessee of such a residential structure by such a covenant, provision, rule or bylaw, or restriction shall be considered unreasonable if–
(A) such fee or cost is not reasonable in comparison to the cost of the solar energy system or the value of its use; or
(B) treatment of solar energy systems by the covenant, provision, rule or bylaw, or restriction is not reasonable in comparison with treatment of comparable systems by the same covenant, provision, rule or bylaw, or restriction.
(c) Solar Energy System- For purposes of this section, the term `solar energy system’ means, with respect to a structure, equipment that uses solar energy to generate electricity for, or to heat or cool (or provide hot water for use in), such structure.
By Amy H. Bray, partner in our Commercial Real Estate Department
Do you want to use this blog article?
You may, as long as you include this complete bio with it:
Amy H. Bray is a Georgia attorney, focusing her practice in community association and real estate law matters.
Her firm, Andersen, Tate & Carr, P.C., works with all manner of clients in business and personal matters, providing “big firm” sophistication with suburban law firm attention and service.
Website: www.atclawfirm.com
Blog: www.andersentatecarr.wordpress.com
Copyright © 2009 & 2010, Amy H. Bray & Andersen, Tate & Carr, P.C.
Image via Wikipedia
In some subdivisions, membership in the homeowners association is voluntary. Generally, these associations are older and the voluntary nature of the association arose because mandatory homeowner associations were not as common as they are now.
Over time, these voluntary homeowners associations may struggle, as they try to maintain expensive amenities (pools, tennis courts, lakes, and dams) with a small and unpredictable income stream. The association may have to close or abandon the amenities due to the expense of maintenance that is borne by few members.
Converting a voluntary association to mandatory membership creates a situation where such associations can anticipate their income and gives them legal means to collect unpaid dues (“assessments”) for members’ fair share of the maintenance costs. This conversion can make administration of amenities easier.
However, the process is hard work and depends heavily on communicating the value of preserving and enhancing the amenities (and their direct effect on the value of all lots within the development) to all of the owners in the community. Below is a brief summary of the initial steps that can be taken in this conversion process.
Form an organizing committee
Assign tasks to committee members:
- Marketing/Communication chairman,
- Attorney liaison, and
- Membership chairman.
Contact an attorney with experience representing community associations in converting to mandatory membership.
Give the attorney all existing legal documents for the association.
- Covenants,
- By-laws, and
- Articles of Incorporation.
Ask for a fee quote letter outlining tasks and costs for tasks. Tasks may include amending all or a portion of the existing documents, creating new use rights in separate documents, creating consent forms, assisting with preparation of meeting notices and proxies.
Determine how many homes need to participate in mandatory membership for it to become effective. (It is not necessary, but can address fears that if only a few people sign up, the fees will be excessive.)
Determine fees to be charged for “initiation” into mandatory membership (if any), deadlines for joining (if any), and promotional period where initiation fee may be waived.
Determine how to handle owners that wish to continue as voluntary members.
- Fees for membership.
- Can they serve on the association board?
- Can they vote?
By Amy H. Bray, partner in our Commercial Real Estate Department
Do you want to use this blog article?
You may, as long as you include this complete bio with it:
Amy H. Bray is a Georgia attorney, focusing her practice in community association and real estate law matters.
Her firm, Andersen, Tate & Carr, P.C., works with all manner of clients in business and personal matters, providing “big firm” sophistication with suburban law firm attention and service.
Website: www.atclawfirm.com
Blog: www.andersentatecarr.wordpress.com
Copyright © 2009 & 2010, Amy H. Bray & Andersen, Tate & Carr, P.C.
Image via Wikipedia
This June, the Federal Housing Administration (“FHA”) announced that, pursuant to the Housing and Economic Recovery Act (“HERA”) of 2008, it is implementing a new approval process for condominium projects. This new program will allow lenders to determine project eligibility, review project documentation, and certify compliance with applicable U.S. Department of Housing and Urban Development (“HUD”) regulations.
HUD further issued guidelines and instructions on the options available to lenders for this review along with the guidelines for approving condominium projects. It is important to note that lenders will have responsibility for obtaining and keeping all the project legal documents, contracts, conveyances, plats, plans, insurance coverage, presale and owner occupancy conditions and any other documentation necessary in the review and approval of the condominium project. Lenders are further required to provide this information to HUD staff upon request for verification of compliance.
Keep in mind that this will mean that lenders will need to have some knowledge of, or obtain assistance with, how condominiums are formed and function. Phasing of condominiums will be a particular issue, along with occupancy requirements. Keep in mind that phasing can drastically affect the way owner-occupancy is calculated for approval purposes. Other issues to note are the requirement to have a current reserve study. Depending upon how complete the project is, an environmental review may be required. There are also particular requirements that apply to condominium conversions only.
Finally, lenders will be required to provide certifications on company letterhead, signed by a company authorized representative that the project complies with applicable FHA requirements, all condominium legal documents meet HUD regulations, state, and local condominium laws, and that the pre-sale and owner occupancy rations per loan are met. Obviously, this is a tricky certification for a lender to make, as it requires knowledge of the condominium laws in the jurisdiction where the condominium project is located, and compliance with those laws. HUD itself suggests that lenders may want to obtain an attorney certification for these issues. We also recommend that you get an attorney certification and, further, have an attorney assist you in drafting the certification to HUD so that it is based off the attorney’s certification to protect the lender.
Finally, keep in mind that there are severe penalties for making false certifications, with potential fines of up to $1,000,000 and/or imprisonment of up to 30 years. There may also be disbarment (for attorneys making false certifications) and civil liability for damages suffered by HUD.
For obvious reasons, it is important to have a strong system for reviewing and retaining documentation for condominium projects that will be subject to HUD-insured loans. We can help with setting up your internal controls and provide the certifications described above.
By Amy H. Bray, partner in our Commercial Real Estate Department
Do you want to use this blog article?
You may, as long as you include this complete bio with it:
Amy H. Bray is a Georgia attorney, focusing her practice in community association and real estate law matters.
Her firm, Andersen, Tate & Carr, P.C., works with all manner of clients in business and personal matters, providing “big firm” sophistication with suburban law firm attention and service.
Website: www.atclawfirm.com
Blog: www.andersentatecarr.wordpress.com
Copyright © 2009 & 2010, Amy H. Bray & Andersen, Tate & Carr, P.C.
Image via Wikipedia
There is no time like the present to think about making sure your community association is organized and taking care of its basic obligations. It can be easy to lose sight of the basic obligations that the association has to perform each year, especially when dealing with bigger issues such as the effects of foreclosures on your community or other difficult and emotionally-charged issues. This article is intended to provide you with a guide to the basic obligations so that you will not end up sweating the small stuff.
Some of these obligations arise from the association’s organization as a nonprofit corporation. Others arise because the association is expressly given routine tasks to perform under its declaration of covenants, conditions, and restrictions (or in the case of condominiums, in the declaration of condominium or in the Georgia Condominium Act).
To begin, the board of directors of the association should be meeting regularly, preferably at least once each quarter, or as provided specifically in the association’s by-laws. Check your by-laws to see what the requirements for how often you must meet, when notices for these meetings must go out, how many directors must attend the meeting before anything can be accomplished. These nuances assure that the actions taken in the meeting are valid actions of the association. These meetings are open to the membership and members should be informed of the meetings and able to attend. Only certain topics may be discussed in executive sessions. If these requirements are not in the by-laws, or if there are currently no known by-laws for the association, I would highly recommend that the association set aside money for a legal review of its documents to determine what else might be missing – and to fix it.
The association officers, at the direction of the board of directors, should maintain permanent, current records of all board, committee, and member meetings and any waivers of notice for such meetings as provided in the Georgia Non-Profit Corporation Code §14-3-1601. The treasurer, or other officer, should maintain current and accurate accounting records for all money flowing through the association, as also required by the Georgia Non-Profit Corporation Code §14-3-1601.
Finally, the officers should make sure there is a current, up-to-date list of the association’s members available at each membership meeting, as provided in the Georgia Non-Profit Corporation Code §14-3-1601 and 14-3-720.
Each year, the association, as a nonprofit corporation, is required to file a registration and pay a fee to the Georgia Secretary of State. This registration updates all of the contact information for the association. You can find the registration form and pay the fee easily online at www.sos.georgia.gov/corporations/. If this step has been overlooked in the past, the association may have been dissolved by the Secretary of State and you will need to reinstate the association. This is very important as the authority to act under any declaration is given to the association. Even more important to the directors and officers is that the legal protections for their actions (any insurance coverage, indemnities in the documents, etc.) disappear if the association is dissolved.
Another annual responsibility that is often overlooked is the need to file a tax return. Even if your association is nonmandatory and has little or no money flowing through it, you will need to file a return. Make sure that a Federal tax identification number has been obtained for your association. If not, or if you are unsure, a tax professional or community association attorney can assist you with finding out if your association needs a number and help you get one. The association would file a form 1120 or a form 1120H with the Internal Revenue Service and a tax professional can help you with filling out these forms.
One thing to look out for, though, is advice that tells you that your association can be a 501(c)(3) tax exempt entity. The standards for becoming this kind of entity (and being tax exempt) are very specific and are very unlikely to include your association. Again, consult a tax professional before attempting to file for this status.
Other annual responsibilities include preparing an annual budget, computing annual assessments (dues), and compiling annual financial statements. These tasks are often required to be performed at the end of the association’s fiscal year, depending upon how the declaration and by-laws for the association are worded. If these tasks have not been performed, they should be taken care of without any additional delay.
Typically, owner/members have the right to see the budget and get notice of the annual assessments well in advance of due dates for payment, and the budget may be subject to approval by the association’s members. The financial statements will likely also be required to be prepared annually, by an independent public accountant, and there are a variety of standards that may be required. Check your documents (or with your attorney) to determine what your requirements are.
Finally, and most importantly, there must be at least one meeting of the members each year and the declaration and by-laws should give you guidance on how to call this meeting (what notices to send out and to whom). Unfortunately, these provisions are often a bit legalistic and spread out between various provisions in the documents. You may want to verify the process with a community association attorney before calling a meeting to make sure you have the process and documentation right.
By Amy H. Bray, partner in the Commercial Real Estate Department, Andersen, Tate & Carr, P.C.
Do you want to use this blog article?
You may, as long as you include this complete bio with it:
Amy H. Bray is a Georgia attorney, focusing her practice in community association and real estate law matters.
Her firm, Andersen, Tate & Carr, P.C., works with all manner of clients in business and personal matters, providing “big firm” sophistication with suburban law firm attention and service.
Website: www.atclawfirm.com
Blog: www.andersentatecarr.wordpress.com
Copyright © 2009 & 2010, Amy H. Bray & Andersen, Tate & Carr, P.C.
There are many subdivisions (and condominiums) in metro Atlanta facing the problem of their development going unfinished with homes unbuilt, partially built, or owned by lenders and sitting empty. Especially in a development with common amenities (everything from pools to elevators) this can have a serious impact on the people who live there.
The status of the association in these developments can be frustrating to figure out, and in the middle of it all, essential bills, such as those for street lights, can go unpaid. Owners can even make the situation worse by refusing to pay their assessments – as they fear the developer or builder in control of the association may misuse or misappropriate the funds. Sometimes those assessments are the only source of revenue to cover essential expenses and no money from the developer is required to be paid (or available). Beyond that, the declaration that created the right to assess is unlikely to allow owners to withhold assessments for such a reason, putting the owners in the position of purposely underfunding the association and putting themselves in violation of the documents which could cause their voting rights in the association to be suspended.
So how should owners, builders, developers, and lenders deal with this situation?
The analysis is generally very fact specific, but often the best thing to do is (a) hand over control of the association and (b) reserve certain assessment and architectural control rights for any undeveloped lots to the builders/lenders.
Owners often outright reject this advice. They want to create a brand new, “fresh and clean” association to run the development because they do not want to inherit any problems the developer created. They also do not want to give up control over unbuilt lots for fear that something undesirable will be built. Unfortunately, given the way the right to levy assessments, engage in architectural control and enforce restrictions is created, this is an expensive and difficult project to accomplish. The rights of the original association would need to be legally “tied” to the new association, and consents from the owners of lots (including the developer, builder, and lender if they own any lots) would probably be necessary. Without a doubt an experienced community association attorney should be consulted before this route is chosen.
Even if these actions can be properly accomplished and a new association is created to step into the shoes of the old one, the goal of a “fresh” entity that is free of any existing liabilities of the original association is unlikely to be achieved. The new association may be seen as a successor to the original association. In that case the new association could still be given the obligations of the old association, even after all the expense and effort of incorporating a new entity.
Lenders and developers often do not want to give up control of the association, either, out of concerns that the owners will apply architectural controls and assessment rights in a way that will harm their ability to market and sell the remaining unfinished lots. This concern is generally well-justified, as purchasers of unfinished lots usually have a horror story to tell about a “problem association” that refused to allow them to build out a lot, causing time delays and imposing extensive standards that might even exceed those already existing in the development. The perception (right or wrong) that a good deal of time and effort will have to go into getting approvals from a homeowner-controlled association can negatively impact the marketability of the unfinished lots.
In this situation the homeowners and the developer (or lender in possession) need to reach a reasonable compromise to give the homeowners control over the association’s day to day operations while giving the developer or lender the rights they need to preserve the marketability of the unfinished lots. Everyone in the development benefits if the homes and common areas are properly cared for, by people present and invested in their care. Equally as important is the maximization of the value of the lots that are unfinished as that value has an impact on the values of the finished homes in the development.
In some cases, this solution is not the best solution, though. In some cases a lender that has taken possession of unfinished lots may be the best choice to run the association for a time, as a successor to the developer. A builder that is still engaged and has significant interest and value in the development may also be a good choice, depending upon the situation.
As mentioned before, the analysis is very fact-specific and must be driven by figuring out what each party is capable of, what each party needs, and what will reasonably work in today’s market. Of course, I highly recommend that you get experienced assistance with this type of situation, both from community association attorneys and from community managers. At the end of the day, what works best is to come up with a reasonable plan that deals with the current realities in the development.
Sometimes those plans are far from perfect, but without some action to fix what’s broken things will inevitably get worse, with less chance of fixing it.
–By Amy H. Bray, a partner in the Commercial Real Estate Department, Andersen, Tate & Carr, P.C.
Do you want to use this blog article? You may, as long as you include this complete bio with it:
Amy H. Bray is a Georgia attorney, focusing her practice in community association and real estate law matters.
Her firm, Andersen, Tate & Carr, P.C., works with all manner of clients in business and personal matters, providing “big firm” sophistication with suburban law firm attention and service.
Website: www.atclawfirm.com
Blog: www.andersentatecarr.wordpress.com
Copyright © 2009 & 2010, Amy H. Bray & Andersen, Tate & Carr, P.C.
Andersen, Tate & Carr, P.C. 