In this installment discussion continues regarding the Partial Assignment of Developer Rights, Resolutions and Policies which include Fining and Collections created by the board after turnover and the authority of the Architectural Control Committee (ACC).
This is important to EVERY property owner:
If the unit you live in has not voted, or you have not been allowed or provided an opportunity to vote for or against changes to your unit restrictions and covenants, they cannot be re-written or enforced by the board or any other entity, like the ACC. They also cannot be re-written at any point in time, but only during their rollover dates according to the verbiage contained within each unit’s restrictions.
To further validate this point Texas Property Code – Section 209.004 (h) states that the dedicatory documents (deed restrictions and covenants) can only be changed by an affirmative vote of 67% of the owners of each unit. This percentage would apply if we didn’t already have an existing statement for dedicatory documents to be changed in our unit verbiage.
This is similar to the bill the Texas Senate will pass stating that cities cannot annex a suburban area without a vote of the people living there…
Three different legal firms were consulted during the process of reviewing the above referenced documents to assess the validity of these statements. Attorneys from all three legal firms responded in agreement with the same thing. If it isn’t in the original deed restrictions (the dedicatory documents which run with the land and that you receive in your title documents to your property when you purchased it) these “created after the turnover” resolutions and policies cannot be enforced nor can the property owners be bound by them. They may be recorded but they are not legally binding against our properties according to the consultations provided.
To illustrate the summary above, below is discussion regarding each point:
PARTIAL ASSIGNMENT OF DEVELOPER RIGHTS (also known as “turnover).
To see the Partial Assignment of Developer Rights, click here.
The Partial Assignment of Developer Rights gave the property owners of Timberwood Park the right to management their assessment fees as outlined in our deed restrictions under Paragraph 8. This was originally controlled by our developer until “turnover” occurred and as part of the turnover process, the document known as Partial Assignment of Developer Rights was created.
Paragraph 4 of the Partial Assignment of Developer Rights states that TPOA is being assigned the rights of the developer as outlined in Paragraph 8 of our deed restrictions. Paragraph 8 of our restrictions reads and is quoted below:
- An assessment of $_____ annually per tract owner (which may be paid semi-annually or annually), shall run against each tract in said property for the use and maintenance of parks and operating costs according to rules and regulations of Seller. The decision of the Seller, its nominee or co-signee with respect to the use and expenditure of such funds shall be conclusive and the Purchaser shall have no right to dictate how such funds shall be used. Such assessment shall be and is hereby secured by a lien on each tract respectively, and shall be payable to the Seller in San Antonio, Texas, on the 1st day of June each year, commencing June 1, ______, or to such other persons as Seller may designate by instrument filed of record in the Office of the County Clerk of Bexar County, Texas. In cases where one owner owns more than one (1) tract there will be only one (1) assessment for such owner. Provided, however, that if such an owner should sell one or more of his tracts to a party who theretofore did not own property, then said tract or tracts so transferred shall thereafter be subject to the lien provided herein. Seller shall have the option of increasing said assessment on an annual basis but in no case should assessment increase by more than 10% in any one year.
Paragraph 8 of our deed restrictions pertains to the assessments collected to manage our development. Note that this assessment is secured by a lien on each tract of land. Collection process states the assessment is due the 1st day of June and the 1st day of January each year in some units or annually/semi-annually in others, varying depending on the unit in which you live. The only mechanism for collection mentioned in this paragraph is via lien.
As a product of turnover, documents were generated to create policy which did not previously exist in our unit deed restrictions. The current collection policy, written after turnover contradicts what is in your unit’s deed restrictions, can be found by clicking “here”. The difficulty with this document is it was created after turnover, and does not follow your unit’s deed restrictions. Deed restrictions are the primary documents which declare what can or cannot be done on, or to your property in a development. Typically, in a development, additional support documentation is produced forming additional governance and requirements, but that is not the case in Timberwood Park. We have unit by unit deed restrictions, along with the agreement to form an HOA serving the good of all property owners, but little else was recorded and structured as part of our original development running with the land.
According to our deed restrictions arrears assessment fees are secured by lien which means they can by collected if a suitable/mutual arrangement is made between the HOA and the property owner involved, or in the alternative, it cannot be collected unless the lien for it is satisfied which typically occurs when a change of ownership occurs or a financial change to the property occurs, like someone taking out a mortgage, a refinance, or some other transaction which is secured by the land and where title must be cleared in order for the transaction to occur. There is not a “collection policy” written into our original governing documents to ownership of our property.
Have you incurred/paid collection fees to the HOA and/or Spectrum?
As with the above referenced discrepancies and inconsistencies, there is no fining policy set forth in our deed restrictions, nor do our unit deed restrictions allow for such a policy. The category of income on our financials “Fining Income” is made up of property owners who have been fined for a “violation” or some other infraction which may or may not be enforceable according to our deed restrictions.
Have you incurred/paid a fine to the HOA and/or Spectrum?
RESOLUTIONS/AMENDMENTS TO OUR MANAGEMENT CERTIFICATE.
To see the resolutions filed by the board since turnover, you will need to see all 7 of the existing “Amendment to Management Certificates” where the board filed amendments to documents which were created after the turnover and attached them to the Management Certificate. These documents added our unit restrictions as an Exhibit attachment to the document stating the document was binding to purchasers, successors, heirs and/or assigns.
The documents are extensive but as an example, Amendment 3 to the Management Certificate for Timberwood Park Owners Association, Inc. can be found by clicking here. None of the amendments were voted on by property owners as is required by our deed restrictions to amend any unit restriction.
According to each unit restriction within Timberwood Park (and there are 64 units – all of which you can find clicking here “…. unless and until the majority of the then property owners of each unit have voted by majority to change those unit restrictions, they cannot be changed.” This applies unit by unit, not one blanket principal for the entire development. Depending on the unit, some restrictions run for 10 years automatically renewing again for 10 years, some 25 years then automatically renewing, some 20, etc. and each unit is specific.
An additional statement was added at the end of paragraph 4 of the Partial Assignment of Developer Rights when it was written stating architectural rights are also assigned stating in part “….and to exercise architectural control over the construction of improvements.” Where in paragraph 8 of our deed restrictions does it grant the board the right to exercise architectural control?
The problem with “created after the deed restrictions” resolutions is the only architectural rights which exist in our deed restrictions refer to new construction. There is no existence of architectural rights for “improvements” in our deed restrictions therefore our deed restrictions do not grant the board/ACC the right to specify specific design criteria other than what is in the original deed restrictions. Some examples, but not all inclusive, of those things which cannot be regulated by the board or ACC:
- Color of home – exterior or interior
- Types of Windows
- Type of siding
- Burglar bars
- Roof Pitch
- Home orientation
- Garage orientation
- Solar panels
- Religious Symbols
As has been said in the previous 3 installments, it is up to you, the property owner to decide whether your development is being managed properly and in accordance with your unit’s restrictions.
Running an HOA is not just about social activities and events held in our park which of course everyone enjoys. Running an HOA entails day-to-day knowledge of the business end of the organization and being responsible for decisions made which impact property owners. The HOA board should represent property owners fairly and equitably as a whole and in doing so provide open transparency when writing documentation which it believes it can enforce against property owners. Further, our unit deed restrictions require a vote to make ANY change to them.
Good management of the neighborhood further recognizes that the property owners should be consulted, included and polled on a regular basis for any planned improvements to our common areas, large expenditures which may or may not impact current and future assessment rates and for any CHANGES TO OUR OPERATING/GOVERNING DOCUMENTS!
In summary, a recap is offered below for topics previously discussed:
- Installment #1 – Financial review and resulting discrepancies showing inconsistencies with expenses versus the financial statements the property owners see for the years 2014-2016. While answers have been requested for these inconsistencies, much of them remain unanswered.
- Installment #2 – Conflict of interest in our by-laws with property management resulting in violation of our HOA by-laws
- Installment #3 – Disenfranchisement of the Villas of Timberwood Park.
The next board meeting is August 1, 2017 at 7 pm in the clubhouse. Come ask questions!