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Credit association dues from rental income


jmsc7ron

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We have a small community, 41 homes. We took partial title on a foreclosed property and have been renting it for the past year which has given us a large surplus of funds. We have no assets to maintain in the community and we have ample money in reserves for insurance dedcutibles, bad debt, etc. Rather than lower the yearly assessment we would like to give a 'credit' on each homeowners account for the coming year since if we lowered the assessment it would be hard to raise it back up next year. Our lawyer doesn't think we should give any money back to the community (there's a surprise) although he can't site any legal reason not to. As treasurer I feel it is foolish to leave thousands of dollars sitting in account doing nothing when we could give it back to the community. Can you comment on any precedent you know of or any legal issues you could forsee if we issue the credit?

Thanks !

Jim Martinelli

jmartinelli@aol.com

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Our lawyer doesn't think we should give any money back to the community (there's a surprise) although he can't site any legal reason not to. As treasurer I feel it is foolish to leave thousands of dollars sitting in account doing nothing when we could give it back to the community. Can you comment on any precedent you know of or any legal issues you could forsee if we issue the credit?

Well, it's also foolish to pay a lawyer whose advice you don't trust. But in any case...

There's no parliamentary objection to giving money to members. There is a prohibition in RONR against assessing any additional fees beyond the dues specified in the bylaws, unless the bylaws provide for that sort of thing. But since HOAs can and often do have specific language in their bylaws, or statutory rules about assessments, the default rules in RONR may not apply to this situation.

You may or may not be right about the difficulty of restoring the assessment to previous levels, but that's going to depend on your bylaws (etc.) not on RONR.

As far as legal matters, you need to consult an attorney--one that you do trust.

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Ah, but of course. Any idea of any forums out there that might be able to provide advice?

What you are talking about would be very dependent on State and local laws. So even if you found a forum, they might give you great advice that applies only in their state. Or even if you found someone in your own state, your county and city statues might be different.

I would ask your lawyer for legal advice and trust your board on the decision if it should be done.

Those are the best source for information, not some stranger on the internet.

And if you do not trust one or the other, then you have deeper issues than can be resolved by a forum.

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