SURVEYS

June 2011 Survey on Covenant Enforcement

Mon, 6 Jun 2011 10:21:49 -0400

Survey Questions

1. Has your association ever gone to court over your covenants?

2. If yes, what was the outcome of the court action and what type covenants seemed to be (or not to be) legally enforceable?

3. How do you enforce your covenants? If you have any written procedures for this, please send them with this survey or tell us where online we can see them.

4. Have you ever put a lien on property for a covenant violation? If yes, have you encountered any legal problems with enforcing the lien?

Reporting Neighborhoods
Number of neighborhoods returning surveys: 22 (list at end of report)
Number of Lots within the returned surveys: 3746

Survey Results
Court Cases
Number going to court: 4
Number winning in court: 2
Number losing in court: 1
Number settled by a court ordered Special Referee basically resulting in a tie: 1
Written Procedures to Enforce Covenants
Number with written procedures: 9
Number with no written procedures: 5
Number not specifically answering this question: 8
Liens Filed for Covenant Violations
Number placing liens: 5

Comments on Going to Court
From Beacon Shores: The case involved the HOA suing a homeowner because he was building an unattached garage with a guest quarters above. Due to heavy case loads, the Judge assigned an “impartial” attorney as a Special Referee to hear the case on behalf of the court. The case was conducted as if it were a court case with depositions, testimony in two court hearings, and ultimately a ruling by the Special Referee approved by the Judge. The outcome of the case was a compromise solution which allowed the garage to be attached to the house by an open breezeway with a gazebo in the middle, such that the structure could be considered a part of the primary residence.

From Keowee Key: We won [the court case] and were awarded $100,000 in legal expenses. The courts are going to hold you to a standard of reasonableness when it comes to the enforceability of covenants. They will also look for consistency in enforcement. Overall, the courts are friendly to associations who consistently enforce their covenants.

From South Oak Pointe: Our fence covenant (as written by Crescent) started out with "Fences and Walls. No wooden fence, or brick or stone wall may be erected... " While the covenant is obviously intended to cover all fences or walls in its entirety, the offending fence was metal (architectural aluminum) in construction. The judge hung his hat on this inconsistency, even though state law specifically says the entirety of the covenant should be considered in a decision, not just one particular excerpt. Our attorney said we stood a very good chance to win on appeal, but . . . we decided to cut our losses and move on.

From Teakwood Plantation: A lot owner submitted house and landscaping plans to the architectural review committee (ARC) which rejected them because the house was placed at the extreme rear of the lot where it would be looking into the rear of the existing house next door. . . The Assn. brought suit, and we were required to enter binding arbitration. The decision of the arbitrator was in our favor, and supported enforcement of our covenants. There are still bad feelings . . . in the neighborhood about this whole affair.

Comments on not Going to Court
From Beacon Shores: After the garage case, we modified our by-laws to require a Member Vote before initiating Legal Action to enforce the Covenants. Since Legal action proved to be quite expensive and divisive to the community, the intent was to make sure that all other measures to enforce the covenants were exhausted and that the majority of the community was in favor of taking the legal step.

From Cherokee Bay: Our attorney advised that if even if we got a judgment against the property owner for a blatant violation, there was nothing we could do. The property owner would just ignore it. The cost for legal fees and court costs would probably be somewhere in the vicinity of $3,000-$4,000. Our problem is that some property owners ignore the covenants with regard to new additions or work on their property and keeping boats, trailers, etc. in places where they are not allowed.

From Wellington Pointe: Wellington Pointe has not gone to court for covenant enforcement. We have met with lawyers on the issue and were told that judges would support enforcement of the covenants, within reason. It was emphasized that it was important to enforce all of the covenants and to be sure they were enforced equally with all property owners. The most significant problem we have encountered has been with the wording of the covenants. As an example, the covenants require trailers be kept behind the house but say nothing about prohibiting trailer storage on a vacant lot.

Comments on Procedures
From Crestview: We require written permission for EVERY activity. No more he said this or he said that. Equally important- we revised our Covenants to require arbitration/mediation or the use of the Master in Equity. No more of this court action which drags on and on. All of this information is available on our web site at http://crestviewoa.org. There is a link to our Guidelines and another to our Covenants. The revised section requiring arbitration is 12.1(a).

From Emerald Pointe: We have a Covenants Committee that is charged with initial adjudication of complaints. Any complaint submitted to the committee must conform to two specific regulations: 1) The complainant must first speak with the accused violator to try and resolve the matter; 2) If no resolution is reached, a written complaint including the date when the two parties met and the specific Article and Section numbers of the covenant allegedly violated must be submitted to the Covenants Committee.

From Riverlake: The Board of Directors created an ongoing “Rules and Regulations” document that serves to uphold the covenants and by-laws. These rules and regulations work in conjunction with the covenants and by-laws, and do not require the services of an attorney or the rigors of the filing process, to be enacted.

From Southwind Bay: We use our Management Company to inform Covenant violators. This puts a "third party" between neighbors.

From Waterford Pointe: We hire [a person] to approve plans and to follow new builds although we don’t have any going at this time. He also works in the same capacity at Keowee Key and I think Waterside. We use also use him as our enforcer and it has worked very well except for one situation.

Comments on Attorneys
From Beacon Shores: Our experience with difficult enforcement issues is that a negotiated settlement is a better solution for all parties (except the lawyers) than litigation. In the garage case we found that once litigation is started, the lawyers tend to want to speak for the parties and may actually interfere with the two parties reaching a negotiated settlement.

From Moonlight Bay on Lake Keowee: While I am not an attorney, due to the nature of my prior employment, I have had a lot of experience preparing documents for attorneys to present in court. I have clearly found that a well prepared attorney has a good chance of winning the case – no matter what side he represents. The cases that I have seen have most frequently resulted in a win for the best prepared attorney. That may be the homeowner because the HOA or POA just does not have the money to pay for good legal assistance. At least our POA has limited resources to fight for what is right. Wouldn’t it be nice if only the people who were right won cases?

Comments on Liens
From Beacon Shores: The Board has levied substantial fines for three incidents involving setback violations. In one case, the fine was partially paid by the builder, and a lien was filed to collect the remaining part of the fine. It is interesting to note that the house was sold and conveyed at a closing and the closing attorney did not discover the presence of the lien. The builder voluntarily paid the remainder of the fine after the closing. We released the lien upon receipt of the amount owed.

From Crestview: Yes, we currently have a lien on a person’s property for about $8,000 to replace some trees that he cut down without written permission. We used a lawyer to write him about the lien and to place it on his property. The important item is to have the procedures in place to enforce an action and to document everything in writing.

From Keowee Key: No, [we have never filed a lien for a covenant violation]. Be careful. There are plenty of embarrassing stories out there that reinforce a negative stereotype of community associations. The media just loves the story about the evil association that cracks down on an 8-year old's lemonade stand because it violates the "no business" covenant.

Written Procedures
The following Associations either submitted detailed written procedures for dealing with Covenant Complaints or stated that they have them. If you would like to see their document(s), please let us know and we will put you in touch with the proper person: Beacon Shores , Crestview (http://crestviewoa.org), Emerald Pointe (http://emerald-pointe.com/links.htm Click on EPOA Policy Book), Keowee Harbours, Keowee Key (www.keowee-key.com. Click on "Resource Center" tab), Port Santorini, Riverlake, South Oak Pointe, Teakwood Plantation (http://www.teakwoodplantation.org/cgi-bin/documents.pl)

Survey Participants
Beacon Shores (Lake Keowee)
Cherokee Bay (Lake Hartwell)
Crestview (Lake Keowee)
Emerald Pointe (Lake Keowee)
Edgewater (Lake Hartwell)
Keowee Harbours (Lake Keowee)
Keowee Inlet (Lake Keowee)
Keowee Key (Lake Keowee)
Keowee Shores (Lake Keowee)
Marina Point (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Moonlight Bay (Lake Keowee)
North Harbour (Lake Keowee)
Oak Stone (Lake Keowee)
Port Santorini (Lake Keowee)
Riverlake (Lake Hartwell)
Shelter Cove (Lake Keowee)
South Oak Pointe (Lake Keowee)
Southwind Bay (Lake Keowee)
Teakwood Plantation (Lake Hartwell)
Waterford Pointe (Lake Keowee)
Wellington Pointe (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

April 2011 Survey on Outbuildings

Wed, 27 Apr 2011 10:27:55 -0400

I. Survey Questions:

1. Has your association defined what an ‘outbuilding’ is?
2. What construction and lot placement restrictions do you have?
3. Is there a minimum/maximum square footage, max number of stories and/or height?
4. Do you use an architectural firm for review? If so, please give name.

II. Reporting Neighborhoods:
Number of neighborhoods returning surveys: 14 (list at end of report)
Number of Lots within the returned surveys: 3164

III. Survey Results:
Number defining the word outbuilding: 4
Number with construction and lot placement restrictions: 9 (3 do not allow outbuildings)
Number with minimum/maximum square footage, max number of stories and/or height: 9
Number using an architectural firm for review: 0 (1 uses an engineer)

IV. Comments of Interest:

Definitions of Outbuilding:
From Moonlight Bay on Lake Keowee: We have an indirect definition of an outbuilding as it is defined as “All buildings and outbuildings” and requires that an outbuilding comply with all construction requirements as would a “building.”

From Moonlight Bay on Hartwell: It is any unattached storage type building.

From Emerald Pointe: As the word outbuilding is used in our covenants but not specifically defined word for word, we would default to a plain and ordinary meaning of the term such as “a building separated from and subordinate to the main house.”

Architectural Review:
From Waterford: The construction and location of outbuildings (gazebo, potting shed, storage shed, statues, gates, playhouses, etc.) shall be subject to the review and approval of the ACC [Architectural Control Committee]. We use Richard Hartford for both review of the Blueprints and enforcement. He is an engineer and does a great job.

From Edgewater: The guidelines as written allow us to review the details of any proposed structure and prevent those that we feel are not appropriate or consistent with our requirement that lots are to be used exclusively for residential purposes.

From Riverlake: We have an Architecture Chair and a committee that reviews new construction and construction to existing homes.

V. Survey Participants
Berwick Court (Lake Keowee)
Crestview (Lake Keowee)
Emerald Pointe (Lake Keowee)
Edgewater (Lake Hartwell)
Keowee Key (Lake Keowee)
Marina Point (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Moonlight Bay (Lake Keowee)
Port Santorini (Lake Keowee)
Riverlake (Lake Hartwell)
Shelter Cove (Lake Keowee)
South Oak Pointe (Lake Keowee)
Teakwood Plantation (Lake Hartwell)
Waterford (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

April 2011 Survey on Derelict Boat Procedures

Mon, 4 Apr 2011 21:16:51 -0400

I. Survey Questions:
1. Has your association encountered this problem before? If so, would you describe steps you took to resolve the problem.
2. Have you ever given a boat slip owner a special assessment for repair of his/her individual slip?
3. Have you removed a boat and stored it at another location? If yes, what location? How were fees recovered?
4. Have you fined, or threatened to fine the boat slip owner if the boat were not removed after a reasonable timeframe? If yes, what was the amount of the fine?
5. Have you placed liens against the boat slip owners’ property if they fail to pay for repairs or fines?
6. Have you had an attorney provide guidance to you in a related matter? If yes, please advise what was recommended, the name of the attorney, and how the problem was ultimately resolved.

II. Reporting Neighborhoods:
Number of neighborhoods returning surveys: 22 (list at end of report)
Number of Lots within the returned surveys: 3453

III. Survey Results:
Number that have encountered this problem: 3
Number engaging an attorney and/or physically removing a derelict boat: 2
Number offering specific suggestions: 5

IV. Specific actions taken by two associations
From Stoneledge: We ended up sending a letter to our delinquent owner. This letter was drafted by our HOA attorney and the unit in question was being rented. Our HOA attorney is Darryl Moss of Weissman, Nowack, Curry & Wilco, P.C in Atlanta, GA. We never had to proceed beyond the letter as the owner paid up.

From Wynward Pointe: We have encountered this issue. Our covenants did not directly address this issue. The boat was initially in a boat dock and obviously deteriorating. We contacted DHEC, Duke Energy, FOLKS and others as we were concerned about pollution of the lake if it continued to deteriorate. Ultimately, the home went into foreclosure and the dock was removed. However, the boat was just tied to the deck ramp and left. Still, DHEC, Duke and all other responsible agencies would not respond. In fact, we were told that there was nothing they could do until it posed a threat.

One day, it began to sink and one of the neighbors called Wayne McCall who declared it as salvage as it was sinking. He removed it before it was completely submerged and hauled it away. We are still not sure of the legality but were not extremely concerned as the owners had abandoned both the property and the boat. We did not seek legal advice and this is not a legal determination but just our experience.
It was obviously a frustrating issue for us as the homeowner had not paid dues or performed covenant required property maintenance. As such, a lien with fees & interest had already been placed on the property. We exercised the maximum penalty assessment allowed by our covenants on the property so really had no other financial recourse for the derelict boat situation.

V. Comments of Interest:
From Moonlight Bay on Lake Keowee: Regarding boat removal, I would be careful to comply with “SC eviction laws and notices.” It would be good if we had an attorney who could work for the common good of all our associations. I for one would like an introduction to a good attorney that other HOA’s may use. If someone is pleased with their HOA attorney, I would like an introduction.

From Keowee Shores: If the Association is in South Carolina and checks with the DNR, the State has regulations regarding abandoned boats which are quite helpful. At least a few years ago, if a boat were reported abandoned, the State would make an effort to contact the owner, and if they cannot after a time, ownership of the boat is transferred to the person reporting. Solves all the liability problems, but doesn't repair the dock, etc.

From Chickasaw Point: The Chickasaw POA does not get involved in the docks, and a separate dock owners’ association handles the maintenance and other problems. The Lake Hartwell Association tracks down derelict boat owners on Hartwell and gives the information to the Corps of Engineers.

VI. Survey Participants
Beacon Shores (Lake Keowee)
Berwick Court (Lake Keowee)
Chickasaw Point (Lake Hartwell)
Crestview (Lake Keowee)
Cross Creek (Seneca)
Emerald Pointe (Lake Keowee)
Keowee Harbours (Lake Keowee)
Keowee Inlet (Lake Keowee)
Keowee Shores (Lake Keowee)
Marina Point (Lake Keowee)
Moonlight Bay (Lake Keowee)
North Harbour (Lake Keowee)
Oak Stone Shores (Lake Keowee)
Riverlake (Lake Hartwell)
Shelter Cove (Lake Keowee)
South Oak Pointe (Lake Keowee)
Stoneledge (Lake Keowee)
Teakwood Plantation (Lake Hartwell)
Waterford (Lake Keowee)
Waterford Pointe (Lake Keowee)
Wellington Point (Lake Keowee)
Wynward Pointe (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

November 2010 Survey on Confidentiality and Dues

Thu, 18 Nov 2010 16:49:10 -0500

I. Survey Questions:
1. Regarding dues, does your board of directors disclose to its association’s lot owners the following:
Amount of dues outstanding in total? Yes or No
Lot numbers with past due amounts? Yes or No

2. Is there any other information regarding dues that your board views as confidential and therefore does not disclose to the general lot owners?

3. Any other comments regarding confidentiality would be appreciated.

II. Reporting Neighborhoods:
Number of neighborhoods returning surveys: 21 (list at end of report)
Number of Lots within the returned surveys: 5326

III. Survey Results:
Number disclosing amount of dues outstanding in total: 15
Number disclosing specific lot numbers and/or names of delinquent owners: 7
Note: Two communities indicated they have no delinquencies and therefore have nothing to disclose. A third community said it had no delinquencies but would disclose all information should any owner become delinquent.

IV. Comments of Interest

Full or partial disclosure:
From Wellington Pointe: We include the amount of unpaid dues in our financial report, but disclose lot information only when requested, such as at an annual meeting. We have not considered that information confidential, but have not included same in our newsletter. In general, we have 33 equal partners with all entitled to whatever information is known to its officers and directors.

From Oak Stone Shores: We feel that all owners in Oak Stone Shores are partners in the association and therefore should be aware of all things regarding finances. Full disclosure is our general rule.

From Moonlight Bay on Lake Keowee: The Association does not provide any information with regard to specific lots except to the specific lot owner, except any information that is obtained via public records. We are considering filing liens when dues are more than 6 months past due. At that point the “Lien” will become “public knowledge” and therefore, we believe, should be able to be communicated to all lot owners without the risk of divulging confidential information, since it becomes public information at the time the lien is recorded.

From Keowee Shores: Our view is that the financial status of the Association is information that all Owners are entitled to, and therefore the information is shared. Financial status is published only once a year at the annual meeting. If there is controversy regarding publication of dues status, addressing it at a membership meeting with a formal motion and vote is the best solution. It seems highly unlikely that members would not support publication by a wide margin.

From Edgewater: Yes, including property owner’s name of record. This information should be available to all property owners since it directly affects them.

From Beacon Shores: We have no confidentially regarding dues or finances.

Limited or no disclosure:
From Teakwood Plantation: We have not provided this info (dues delinquency) to members outside the Association Board. On one or two occasions, we have allowed members experiencing "hardship" to pay dues on an installment plan, but have not informed the general membership.

From Pineridge Pointe: So far, all of the issues in Pineridge Pointe regarding past-due dues have been handled privately between the Board and the individual. No notice of amounts outstanding or lots in arrears have been disclosed, but we have managed to collect in all delinquencies so far without much fuss. If someone were stubborn in refusing to pay their share, I believe the Board would consider making that decision public as one of the tools at our disposal to encourage cooperation.

From Keowee Key: We do not advise members concerning delinquent assessments or foreclosures. The General Manager, working with the knowledge of the Finance committee and controller, takes appropriate action when needed and obtains legal advice as it is needed.

From Chickasaw Point: The list is available at the office but we don’t publish anything for distribution. Everything is available to Lot Owners.

IV. Survey Participants
Beacon Shores (Lake Keowee)
Berwick Court (Lake Keowee)
Chickasaw Point (Lake Hartwell)
Crestview (Lake Keowee)
Edgewater (Lake Hartwell)
Emerald Pointe (Lake Keowee)
Keowee Key (Lake Keowee)
Keowee Shores (Lake Keowee)
Keowee Subdivision (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Moonlight Bay (Lake Keowee)
North Harbour (Lake Keowee)
Oak Stone Shores (Lake Keowee)
Pine Ridge Pointe (Lake Keowee)
Port Santorini (Lake Keowee)
Riverstone (Lake Keowee)
Shelter Cove (Lake Keowee)
South Oak Pointe (Lake Keowee)
Teakwood Plantation (Lake Hartwell)
The Summit (Lake Keowee)
Wellington Point (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

October 2010 Survey on Foreclosures and Bankruptcies

Thu, 21 Oct 2010 16:56:18 -0400

I. Survey Questions:
1. Has your association placed liens on properties for unpaid dues/fees? Yes or No
If yes, do you file new liens every year if the dues remain unpaid?

2. Were you able to collect when foreclosed properties were sold, and the sellers did NOT declare bankruptcy? Yes or No
If yes, what steps did you take? Did you seek a legal opinion/assistance?

3. Were you able to collect when foreclosed properties were sold and your HOA was notified by the Court that the sellers DID declare Chapter 7 or Chapter 11 bankruptcy? Yes or No If yes, what steps did you take? Did you seek a legal opinion/assistance? Are there steps HOAs can take without an attorney? Are they time critical?

4. Does your HOA annual budget include a line item or provision for uncollected dues?

II. Reporting Neighborhoods:
Number of neighborhoods returning surveys: 27 (list at end of report)
Number of Lots within the returned surveys: 3560

III. Survey Results:
Number placing liens on properties for unpaid dues/fees: 17
Number with no unpaid dues and therefore no needed liens: 9
Number filing new liens every year if dues remain unpaid: 11 (Note: Four associations reported that re-filing was not needed because dues were paid after liens were filed.)
Number able to collect on foreclosed properties (no bankruptcy): 6
Number able to collect on foreclosed properties (with bankruptcy): 2
Number including a budget line item for uncollected dues: 7

IV. Comments of Interest

Regarding collections:

From Oak Stone Shores: So far we have not been able to collect on foreclosed properties when they have been sold at auction. Steps: 1) Filed a lien. 2) Responded to the foreclosure court to assert our claim. 3) Attended the court foreclosure hearing. We consulted with several real estate agents for their experience and also consulted with a real estate attorney concerning our response to the foreclosure court.

From The Summit: We were able to collect when bankruptcy was involved if a bank was the final owner.

From Riverlake: We collected the amount due through the closing attorney when he was notified of the liens. No additional legal advice was necessary.

From Teakwood Plantation: We had two lots in short sale then foreclosure. Both homes had liens put on them. When a home goes into foreclosure, as I understand it, the foreclosure is kind of like bankruptcy, and the lien is voided. However, when in foreclosure the bank owns the house and the bank is responsible for the dues. In our case the same bank owns both houses and the bank has paid the dues.

From South Oak Pointe: We were able to collect when foreclosed properties were sold, and the sellers did not declare bankruptcy, by speaking with the attorneys handling the transaction.

From Port Santorini: We did collect on a foreclosed property by contacting the bank and working closely with the realtor with whom it was listed. Did not use legal assistance.

From Keowee Harbours: If the attorneys conducting the title searches do not discover the outstanding liens, it may be difficult to recoup funds that were in arrears at the time of closing. In most instances, the monies in arrears are less than the legal costs involved in trying to recover them.

Regarding Budget Procedures:

From Riverstone: We will seriously anticipate that 5 to 10% of 2011 dues will not be collected as income when preparing our 2011 budget.

From Moonlight Bay on Lake Keowee: Currently we reserve 100% for lots owned by the Developer and 20% for other lots.

IV. Survey Participants
Beacon Shores (Lake Keowee)
Cane Creek Harbor (Lake Keowee)
Chickasaw Point (Lake Hartwell)
Emerald Pointe (Lake Keowee)
Keowee Harbour (Lake Keowee)
Keowee Shores (Lake Keowee)
Keowee Subdivision (Lake Keowee)
Marina Pointe (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Moonlight Bay (Lake Keowee)
Mountain View Pointe (Lake Keowee)
North Harbour (Lake Keowee)
Oak Stone Shores (Lake Keowee)
Pine Ridge Pointe (Lake Keowee)
Port Santorini (Lake Keowee)
Riverlake (Lake Hartwell)
Riverstone (Lake Keowee)
Shelter Cove (Lake Keowee)
South Oak Pointe (Lake Keowee)
Teakwood Plantation (Lake Hartwell)
The Summit (Lake Keowee)
The Woods (Lake Keowee)
Waterford Pointe (Lake Keowee)
Waterford (Lake Keowee)
Waterstone (Lake Keowee)
Wellington Point (Lake Keowee)
Wynward Pointe (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

September 2010 Survey on Community Street Signs

Mon, 13 Sep 2010 08:23:10 -0400

I. Survey Questions:
1. Has your community replaced the original street signs with more decorative signs and if so what process did you go through?
2. Has your community tried to replace its signs but were not allowed to do so by the county?
3. Are your streets owned and maintained by the county or are they private (owned by developer, association, or individual lot owners)?

II. Reporting Neighborhoods:
Number of neighborhoods returning surveys: 25
Number of Lots within the returned surveys: 6061

III. Survey Results:
Number with county owned streets: 19
(Note: One neighborhood is included here because all but three of its streets are county owned.)
Number with privately owned streets: 6
Number with county owned streets that have replaced original signs: 2
(Note: One association received county approval for the new signs while the other did not. The county is forcing the removal of the non-approved street signs.)
Number with county owned streets denied requested new signs: 1

IV. Comments of Interest

From Keowee Harbour: Our streets are owned by the community and we have replaced our street signs without going to the county. We paid for them through our assessments.

From Riverlake: Our association did put decorative wooden signs in our neighborhood to designate speed limits, slow for golf carts, children playing, hidden drives, etc. We had them up from 2006-2010 . . . Oconee County informed us this spring that they were illegal and that we had to remove them or the county would. Too bad because they did add a nice touch to the roadside. Obviously, gated communities and perhaps other types of neighborhoods can have them, but not those maintained by Oconee County. We did not replace county signs but we added decorative signs to what existed. We did not apply for or request permission to do so. They lasted 4 years. County rules required their removal.

From Teakwood Plantation (in Anderson County): We discussed this at a Home Owners meeting. Our cursory investigation indicated that it could be done (with county approval), but the cost (around $3,000) was beyond what the members thought reasonable.

From The Summit: Looked into replacing the signs but cost was too much. Also, we had to figure out how to meet the county fire requirements for the signs. Not worth the effort.

From Waterford Pointe: We replaced our county signs a couple years ago after getting county approval and agreeing to maintain the signs.

IV. Survey Participants
Beacon Shores (Lake Keowee)
Berwick Court (Lake Keowee)
Chickasaw Point (Lake Hartwell)
Crestview (Lake Keowee)
Cross Creek (Seneca)
Edgewater (Lake Hartwell)
Emerald Pointe (Lake Keowee)
Keowee Harbour (Lake Keowee)
Keowee Inlet (Lake Keowee)
Keowee Key (Lake Keowee)
Keowee Shores (Lake Keowee)
Keowee Subdivision (Lake Keowee)
Lakeside/White Harbor (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Moonlight Bay (Lake Keowee)
Oak Stone Shores (Lake Keowee)
Pine Ridge Pointe (Lake Keowee)
Riverlake (Lake Hartwell)
Riverstone (Lake Keowee)
South Oak Pointe (Lake Keowee)
Southwind Bay (Lake Keowee)
Teakwood Plantation (Lake Hartwell)
The Summit (Lake Keowee)
Waterford Pointe (Lake Keowee)
Waterstone (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

June 2010 Survey on Board of Directors’ Liability Insurance

Fri, 18 Jun 2010 14:29:05 -0400

I. Questions asked in the survey:
1. Does your association carry this kind of insurance coverage?
2. Have your rates increased significantly this year?
3. Are you satisfied with your current insurance agent and insurance company?
4. If you are satisfied, who is your agent/company?

II. Survey Results from Reporting Associations:
Number of participating associations: 21 (list at end of report)
Number of Lots within the returned surveys: 1550
Number with Board Liability Insurance: 14
Number without Board Liability Insurance: 6
Note: Cross Creek does not have an Owners Association and reports that its books, including insurance matters, are open only to the developer.
Number with significant rate increase: 2
Number with no significant rate increase: 12 One association did not answer this question.
Number satisfied with insurance carrier/agent: 12
Number dissatisfied with insurance carrier/agent: 2

III. Suggested agents/insurance carriers

Please note: MLCA does not operate, control in any way, or endorse any information, products, or services on the following list of insurance agents/carriers. MLCA cannot and does not guarantee or warrant the fitness for any purpose the accuracy, timeliness, or usefulness of any opinions or other information provided through the list. In no event will MLCA be liable for any decision made or action taken by anyone or any association in reliance upon information provided through the list. A USER'S SOLE AND EXCLUSIVE REMEDY FOR DISSATISFACTION WITH A PARTICULAR SERVICE IS TO STOP USING THE SERVICE. MLCA is providing this alphabetized list along with the name of the recommending association(s).

Anne McAllister's State Farm agency in Seneca: Used by Crestview, Emerald Pointe, North Harbor, South Oak Pointe, and Southwind Bay

Byrd-McLellan Agency in Seneca (864-882-2302), Insurance Company is Auto-Owners: Used by Port Santorini and Pine Ridge Pointe

Lewis Patterson’s State Farm agency (654-2420): Used by Keowee Shores

Terence V. Roberts’ State Farm Agency in Anderson, SC: used by Edgewater

Upstate Insurance Agency/ Agent is Chris Lawrence/ Insurance Company is Auto-Owners: Used by Oak Stone Shores

IV. Comments of Interest
From Port Santorini: We have 99 lots and pay just under $800. That includes liability, our docks and 5 acres of common area.

From Pine Ridge Pointe: For a $1,000,000 Errors and Omissions liability / Personal Injury / Advertising Injury policy (that includes other misc coverage) our annual premium this year rose to $675 from $659 in 2009 -- still exceptionally reasonable compared to what I could find when I went shopping prior to renewing our policy this year -- in fact, I was told by more than one company to hold on to that policy because we wouldn't find anything else even close to that low a price anywhere else.

From North Harbour: Our insurance agency is quick to respond to any query; in fact they were very responsive with regard to a recent personal (BS) property claim, paying everything but our $500 deductible on the loss. They also provide me a break-down of our insurance costs each year so that charges may be appropriately assigned to HO and BS accounts.

From Keowee Shores: Most insurers don't want to fool with a small association like ours (19 lots). We found this out when rates were high and we were seeking alternate insurers.

From Crestview: We have 57 lots and no amenities. We have a 1 million dollar umbrella policy. There is a $500 deductable. The monument is insured for about $7,000. Our rates have stayed the same for several years. We pay about $720 per year.

IV. Survey Participants
Beacon Shores (Lake Keowee)
Berwick Court (Lake Keowee)
Cane Creek (Lake Keowee)
Crestview (Lake Keowee)
Cross Creek (Seneca)
Edgewater (Lake Hartwell)
Emerald Pointe (Lake Keowee)
Keowee Inlet (Lake Keowee)
Keowee Shores (Lake Keowee)
Keowee Subdivision (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Normandy Shores (Lake Keowee)
North Harbour (Lake Keowee)
Oak Stone Shores (Lake Keowee)
Pine Ridge Pointe (Lake Keowee)
Port Santorini (Lake Keowee)
Riverlake (Lake Hartwell)
Shelter Cove (Lake Keowee)
South Oak Pointe (Lake Keowee)
Southwind Bay (Lake Keowee)
Wellington Pointe (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

June 2010 Survey on Single Family Residential Requirements

Fri, 18 Jun 2010 14:15:14 -0400

I. Questions asked in the survey:
1. Does your community allow for home ownership by more than one family?
2. Does your community allow for home ownership by a business entity (such as an LLC)?
3. Do you have any specific covenant language prohibiting ownership by a business entity or more than one family or are your covenants “silent” on this?
4. Has your neighborhood ever had any property ownership by more than one family or by a business entity?

II. Survey Results from Reporting Associations:
• Number of participating associations: 26 (list at end of report)
• Number of Lots within the returned surveys: 1915
• Number allowing ownership by more than one family: 21
• Number prohibiting ownership by more than one family: 5
• Number allowing ownership by a business entity: 20
• Number prohibiting ownership by a business entity: 6
• Number submitting specific language prohibiting ownership by more than one family and/or a business entity: 3
• Number with any past or current property ownership by more than one family or by a business entity: 12

I. Interesting Comments:
From Wynward Pointe: The association covenants are somewhat vague on this. While it is stated that property usage is intended for single family dwelling usage it does not specifically address ownership. There are at least two homes in the community that are owned by multiple families – typically structured as an LLC.   Our covenants do contain specific language prohibiting vacation type ownership (time shares, etc) as well as prohibiting short term rentals. Any rental requires a 1 year minimum contract. Also, no transient activities to include camping on unimproved lots are permitted.

In December 2009, we obtained legal counsel from a real estate attorney in Greenville regarding our options in the event of business/corporate ownership. Unfortunately, the legal opinion given based upon his reading of our covenants confirmed that little could be done prior to purchase. However, various conditions of usage can be dealt upon occupancy but these are difficult barring any significant external covenant violation issue such as upkeep, transient usage, etc.

From Emerald Pointe: On the face of it Emerald Pointe’s covenants appear to restrict the neighborhood to single family owned residences. The covenants state that Emerald Pointe is to be “. . . an exclusive residential community of single-family residences.” Our covenants, however, never define single-family residence. Is it a residence owned by a single person or single married couple, or would it include a male/female unmarried couple, or would it include a couple of the same sex, etc? Does it simply mean a residence occupied by a single family (however that may be defined) at any given time? Without a precise definition of single-family residence Emerald Pointe must allow for all of the above possibilities.

We received legal advice cautioning against making our covenants more restrictive. Any effort to “tighten” our covenants would invoke grandfathering via South Carolina’s “Takings Provision” of the law. Any covenant made more restrictive would apply only to lots sold after the covenant change. Any current lot owner would be grandfathered under the old covenant. Having two sets of covenants in effect for different lots (and perhaps on more than one covenant issue) would be a record keeping nightmare.

From Keowee Harbours covenants: No lot may be used except for residential purposes and only one single-family residence shall be erected, altered, placed or permitted on any lot. . . Nor may two or more Single Families or adult individuals purchase or construct a house on a Residential Lot with the intent and/or purpose of alternating occupancy of the house.

Single Family shall mean and refer to one family consisting of one or more persons, each related to the other by blood, marriage or legal adoption, or no more than two unrelated adult persons residing together as a single housekeeping unit, in addition to any household or personal servant staff.

From Port Santorini covenants: Only single-family dwellings . . . shall be permitted on any lot designated as single family residential. Single Family Dwelling- A residential dwelling for one or more persons, each related to the other by blood, marriage, or legal adoption, or a group of not more than (3) three adult persons not so related, together with domestic servants, maintaining a common household in such dwelling.

No single-family residence may be used for vacation rental. A vacation rental is hereby defined as:    1.   Rented, leased or assigned to tenancies for any period of less than one hundred eighty (180) continuous days duration. 2.   Made available for occupancy, possession, sleeping accommodation or lodging for one or more persons, for valuable consideration, for any period of less than one hundred eighty (180) continuous days duration.

Timeshare- No lot or improvement thereon will be used, sold, developed, divided or  in any way used as a vacation time sharing plan . . .

From Waterford Pointe covenants: Residential Restrictions. Each Lot shall be used exclusively for single family, non-transient residential purposes . . . No Lot and no Improvements may be used for hotel or other transient residential purposes. Each lease relating to any Lot or any Improvements thereon (or any part of either thereto must be for a term of at least six (6) months, must be in writing, and must provide that the tenant is obligated to observe and perform all of the terms and provisions hereof applicable to such Lot and/or Improvements.

From Marina Point: I'm not sure if excluding groups of people from purchasing real estate would be legal under the Fair Housing Act. How could you enforce something like this?

IV. Survey Participants
Bay Ridge (Lake Keowee)
Berwick Court (Lake Keowee)
Cane Creek (Lake Keowee)
Chattooga Lake (Lake Chattooga)
Crestview (Lake Keowee)
Edgewater (Lake Hartwell)
Emerald Pointe (Lake Keowee)
Keowee Harbours (Lake Keowee)
Keowee Inlet (Lake Keowee)
Keowee Shores (Lake Keowee)
Keowee Subdivision (Lake Keowee)
Marina Point (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Normandy Shores (Lake Keowee)
Oak Stone Shores (Lake Keowee)
Parkview South (Lake Hartwell)
Pine Ridge Pointe (Lake Keowee)
Port Santorini (Lake Keowee)
Riverstone (Lake Keowee)
South Oak Pointe (Lake Keowee)
Teakwood Plantation (Lake Hartwell)
The Summit (Lake Keowee)
Waterford (Lake Keowee)
Waterford Pointe (Lake Keowee)
Wellington Pointe (Lake Keowee)
Wynward Pointe (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

June 2010 Survey on Covenant Violation Fines

Thu, 17 Jun 2010 14:05:01 -0400

I. Questions asked in the survey:
1. Has your association implemented a program to fine property owners for covenant violations?
2. If yes, please comment on the acceptance and effect of the fines.
3. If yes, please state your schedule of fines for specific offenses.

II. Survey Results:
Number of participating associations: 26 (list at end of report)
Number of Lots within the returned surveys: 3579
Number of reporting associations with no specific schedule of fines: 17
Number of reporting associations with detailed schedule of fines: 4
Number of reporting associations with limited schedule of fines (primarily new construction): 5

III. Detailed Fines
Of reporting associations, Crestview has the most detailed schedule of fines. Their covenants are available online at http://www.crestviewoa.com/covenants/covenants_2009.pdf. Covenant Article IX contains the parameters under which its Environmental Control Committee (ECC) functions. Crestview reports:
We have a provision in our covenants that require arbitration or mediation rather than using the court system to settle a dispute. This revision to our covenants was passed last year by the owners and incorporated in our covenants. With that revision, we included a list of fines since the arbiter or mediator will ask how to determine that a certain ‘violation’ was fined at a certain amount.

Fines may be levied for infractions of the Covenants or these Guidelines as determined by the ECC and approved by the Board. The Owner will be advised of the fine by certified letter. The Owner may appeal the fine within 30 days of receipt of the certified letter to the Board during its normal meeting schedule. The appeal to the Board will be final.

An example of fines follows and is not meant to be an all inclusive list. These fines may be adjusted by the ECC according to the magnitude of the infraction. These fines do not include the cost to correct the infraction. LBA refers to Lakeside Buffer Area.
• Concrete spillage or construction debris dumping on unapproved area - $250
• Dirt tracked from building site - $150
• Building site in unkempt condition - $25 per day
• Silt fencing not properly maintained or installed per ECC - $25 per day
• Washout into lake from silt fencing not installed/maintained or LBA not maintained in natural state - $150 each washout zone
• New home construction in excess of Covenant 12 month exterior completion requirement or 18 month CO Guideline requirement - $25 per day
• Vegetation/tree removal from LBA without written ECC approval - $1,000. Depending on the magnitude of the infraction, the Tree Valuation Schedule may be imposed.
• Construction vehicles or other vehicles in LBA - $500 each infraction
• Debris burning - $200
• Grass or other unapproved vegetation in LBA - $10 per sq. ft. of area and $25 per week
• Wall or other unapproved structure in LBA - $15 per sq. ft. of area and $30 per week
• Unapproved vehicle, watercraft or trailer in driveway or property – $25 per day
• Damage to common area - $200
• Disposal of yard debris on property other than Owners - $100 per occurrence
• Swimming pool or back flushing pool water drained into lake - $500 per occurrence

Wynward Pointe’s Covenants Article 7, Section 21 creates a Construction Oversight Committee. Their covenants are available online at http://www.wynwardpointe.org/Site/CCRs.html. Wynward Pointe reports:
Fines can be levied upon the recommendation of our Construction Oversight Committee for a variety of covenant violations but typically have only involved lot maintenance and upkeep issues. The process requires 3 separate communications upon violations found in two week increment inspection schedules. Upon non-compliance after the 3rd communication, a $50 fine is levied plus the maintenance issue is performed by the association (if a simple weed, grass, mowing or lawn upkeep issue). The cost of the maintenance plus the $50 fine is billed to the homeowner. If not paid, a lien is placed upon the property. This amount compounds at 1 1/2 % interest per month until paid.

Two other components of the Amended Covenants include the ability of the board to place a lien on unpaid association dues with the compounded interest schedule as described above. Lastly, upon all new construction, the homeowner is required to fill out a Construction or Renovation Escrow Deposit form which provides building permit numbers, builder names , etc as well as submit a $2,000 escrow that is held until successful completion and proper clean-up of the construction. This process is also managed by the Construction Oversight Committee which is chaired by the Association Vice-President.

Oak Pointe reports:
We have had violations and our actions -Cut down trees in lake set back. We have written the owners...the fine was the cost of replacement trees planted. Letters of notification and cost have always resulted in the owner hiring people to re plant the trees.
-Non payment of owners annual dues....liens have been placed for the cost of the dues plus 10% fine and $100-400 filing fee.

IV. Limited Fines
Five other associations report that they have specific limited fines primarily for construction violations. These fines are usually taken from an escrow account funded by the property owner prior to construction similar to that discussed above by Wynward Pointe.

V. Conflict Resolution instead of Fines
Waterford reports:
We implemented a procedure allowing owners to file a verbal or written form about any condition, event, structure etc. that they believed may be out of compliance or a violation of our covenants. The procedure called for a Board member and/or covenant compliance officer to inspect/investigate the complaint and recommend resolution. If the complaint was for a covenant violation that was not resolved by the property owner after an objective review, meeting, etc. a fine could be levied. There was no fine/fee schedule established. There have only been 2-3 complaints submitted during the 4+/- years of this procedure. So far, resolutions/compromises have been achieved to satisfaction of both parties and no fines have been levied.

IV. Survey participants
Berwick Court (Lake Keowee)
Cane Creek (Lake Keowee)
Chattooga Lake (Lake Chattooga)
Chickasaw Point (Lake Hartwell)
Crestview (Lake Keowee)
Cross Creek Seneca
Edgewater (Lake Hartwell)
Emerald Pointe (Lake Keowee)
Keowee Inlet (Lake Keowee)
Keowee Shores (Lake Keowee)
Keowee Subdivision (Lake Keowee)
Moonlight Bay (Lake Hartwell)
Normandy Shores (Lake Keowee)
North Harbour (Lake Keowee)
Oak Stone Shores (Lake Keowee)
Parkview South (Lake Hartwell)
Port Santorini (Lake Keowee)
Riverstone (Lake Keowee)
Shelter Cove (Lake Keowee)
South Oak Pointe (Lake Keowee)
Southwind Bay (Lake Keowee)
The Woods (Lake Keowee)
Waterford (Lake Keowee)
Waterstone (Lake Keowee)
Wellington Pointe (Lake Keowee)
Wynward Pointe (Lake Keowee)

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.

April 2010 Survey on Registered Agents for HOAs

Fri, 30 Apr 2010 16:27:30 -0400

Survey on Registered Agents

Original Survey: The survey went out only to Crescent Communities because it was thought they were the only ones involved. We discovered that ALL associations are affected by this.

The Situation: All South Carolina corporations, including nonprofits, must have a Registered Agent for communication purposes -- especially the service of legal process (like summons). If the state wants to communicate with a nonprofit, it does so by going through the registered agent. The Registered Agent provision of the law is found in Sections 33-31-501 and 33-31-502 (http://www.scstatehouse.gov/code/t33c031.htm) of the 1976 South Carolina Code of Laws, as amended.

The Problem: Few associations are aware of this, but virtually all have a registered agent. Some Crescent Communities learned this recently when they started receiving bills from their registered agents. Crescent hired CT Corporation of Atlanta, or its equivalent, to serve as the registered agent for its developments and never told the fledgling associations about it when said associations assumed control of themselves. No notice of the change from Crescent to control by each HOA was ever conveyed to the associations, and it has taken considerable time and effort to unravel the mysterious appearance of these invoices. Some of the associations were billed several hundred dollars for services they could do themselves because each association may serve as its own registered agent. Bill Keopnick, President of Pine Ridge Pointe Owners Association, spoke to a Crescent representative who “gets stacks of mailings from CT for Crescent properties all over the area.” Bill further states, “If any local former Crescent community is not getting invoices from CT Corp, it is probably because Crescent hasn't made the address change (or couldn't come up with a new address to offload their responsibilities).”

The Solution: Thanks to Bill Koepnick of Pine Ridge Pointe Owners Assn. and Mike Smith of Crestview Owners Assn. for figuring out the following solution:
1) Determine who serves as your Registered Agent. Do this by going to web address http://www.scsos.com/Search%20Business%20Filings, which is on the Secretary of State’s web site. Click on Corporation Search on the right side of the web page and then type your association name on the line reading Corporation Name. Your registered agent will be revealed. Don’t be surprised if it is HDQRTS. Some are.
2) If your agent is someone who lives in your community and from whom you do not receive bills, you are in great shape.
3) More than likely, your agent is a name you do not recognize at an address that might no longer exist, or it could be a company with a real address that is sending bills to you.
4) Change the registered agent from whomever or whatever it is to your association by going to web address http://www.scsos.com/forms/Non%20Profits/NP_ChangeOfRegisteredAgent.pdf at the Secretary of State’s web site for the required form. You must send in two copies of the form and a $10 check.
5) You may select a current resident of your community (i.e. Mike Smith of Crestview is the new registered agent for his neighborhood) or, if the agent’s name is really a title or location, you may leave the name alone and simply change the address. East Shores Owners Assn. has apparently done this by leaving the agent’s name as HDQTRS but changing the address to East Shores’ PO Box at the Seneca post office. The advantage to this approach is that East Shores will never have to change this again (unless their PO Box number changes). If you use an accounting and/or management firm, you could also use either understanding that when you change to a different accounting or management firm, you will have to change the registered agent again.

Original Survey Questions:
1. Has any other Owners Association had similar contact from CT Corporation in this regard? Five associations responded Yes.
2. Were they notified by Crescent that this change was being made? All five responded No.
3. How have they handled the change: kept CT as agent, found a new agent, or taken on the agency themselves? Four of the five have changed the agent to themselves. One just found out about this situation.

Communities participating in the survey:
Beacon Shores
Crestview
Emerald Pointe
Hidden Harbor
Oak Point
Pine Ridge Pointe
Riverstone
South Oak Pointe
Waterford
Waterford Pointe
Wynward Pointe

Disclaimer: MLCA is not able to offer legal advice and cannot respond to any requests for legal advice or the application of any law to specific facts. To understand and protect your legal rights, you should consult the lawyer of your choice regarding legal questions. There are attorneys who specialize in community association law.