BOD CC&R Modification Intent

Posted by Jim Haar

The intent of the Board of Directors with regard to the proposed CC&R Amendments is clear to me.  That is, they want to amend the CC&R’s to make the approval of the Country Club  Lease Agreement  (and other $500K+ purchases) easier to pass.  Approving the proposed amendments (as discussed in the previous “No Choice – Vote No on Proposed CC&R Amendments” post) would allow the BOD to enter into a costly Country Club Lease Agreement with as little as 10% yes vote from homeowners (assuming the minimum quorum vote requirement of 20%).  That is, if the proposed amendments are approved, then this would set the standard for voting approval on the Lease Agreement.   The “Agreement to Stay Investigation” stipulation with the Attorney General’s office simply states that the owners must approve the Lease Agreement without defining what “approval” means.  Therefore, amending the CC&R’s as proposed provides the legal basis for homeowner approval. This is why at the Aspen Lodge meeting, the BOD refused to answer what voting standard would be applied to the Lease Agreement vote.

Do we really want passage of a multi-million dollar SGCC Lease Agreement subject to an approval vote as little as 10% of Somersett homeowners?  Given that SGCC membership (equity, associate and preview), probably equals this amount, passage is certainly guaranteed.

I have always been a proponent on letting the Somersett homeowners vote on whether or not a portion of our assessments should go to funding the SGCC for whatever reason, and we could all live with the results of this decision.  However, I never imagined a BOD proposing CC&R amendments such that this decision could be made by 10% of homeowners.  For a vote of this type 50% homeowner approval should be in effect.

Quite simply – This is an attempt to give the Board more control and the homeowners owners less control.  It comes down to whether or not we believe this to be in the best interests of the association at large and how much trust we would have in both the current and future Boards.  Based on actions to date by both the past and current Boards, I certainly do not!  What about you?

No Choice – Vote NO on Proposed CC&R Amendments

Somersett United
Somersett United

After analyzing the SOA Board of Directors (BOD) proposed CC&R Amendments and what was presented at the Aspen Lodge meeting, a NO vote is the only choice.  This based on the following;

The proposed change grants the BOD the authority to purchase, lease or annex real property up to $500K, for each individual purchase, on an annual basis, without unit owner vote, and with the ability to increase annual assessments up to 15% or levy a special assessment up to 25% of the annual assessment.

The proposed change grants the BOD the authority to purchase, lease, or annex real property over $500K (no limit) with unit owner approval.  However, unit owner approval is defined as a “Majority Percentage Vote” of a “Quorum”.   The term “Quorum” is not defined or otherwise described in the proposed amendments, but is covered under  existing  Article 2, Section 9 of the CC&R’s which states a Quorum  “shall be as specified in NRS 116.3109 and 116.311”.  This statute establishes a Quorum as 20% of all unit owners, unless otherwise provided for in the CC&R’s, which it is not. Therefore the BOD can obtain approval to purchase, lease, or annex real property, without limit by obtaining as little as a 10% affirmative vote of unit owners.  For example, if one assumes 2400 unit owners (we are currently slightly more than that), and 480 votes are cast (meets the quorum requirement) then an affirmative vote by only 241 unit owners would approve the BOD to purchase, lease or annex millions of dollars of real property at the expense of the other 2149 unit owners.  (Note: NRS stands for Nevada Revised Statutes and Chapter 116 is the law governing Homeowner associations),

Clearly one can see the folly of the preceding.   An Association’s BOD should not be granted the purchasing, lease or annexation powers proposed by the amendments.

Do not be fooled by the spin put on the “benefits” of the proposed amendments by the BOD.  For whatever motives, they have complicated what could have been beneficial amendments to the CC&R’s with something untenable,  as well as botching up the voting process. Why one may ask, did they not have homeowner meetings prior to finalizing the amendments and sending out the ballots (as was done with the BOD candidate nights)?  Why did they send out the CC&R ballots in the same packet as the BOD election ballots with only one “secret ballot’ return envelope when the dead line for the return of the two ballots are vastly different?  One could conclude they wanted homeowners to submit the ballots early before fully realizing its implications.

Bottom Line  –  a NO vote on the proposed CC&R amendments is a must. Then perhaps the new BOD can accomplish submitting reasonable CC&R amendments for homeowner vote.