Post by Admin on Jan 8, 2014 22:36:38 GMT -5
Although I believe that SLohA's Declaration contains no provision giving the authority to amend the Covenants,I'll pretend, for the sake of argument, that it does. Board holds that the authority was subsequently granted in an amendment which of course, cannot be valid if the original authority to amend was absent. For all practical purposes, until the argument is settled, SLohA must march on and fix it later if necessary. For the purposes of this blog, I'll simply write from another owner point of view who is voting. (I cannot, of course, since I am not a member.)
The content of the proposed amendments is another matter. As a general starting point, it should be remembered that covenants were drawn to resist changes by making amendments nearly impossible to achieve. Changes should also be tested with a basic question "What problem are we trying to solve with this proposed change"? If the answer to that question is unclear, or the benefits are dubious or not present, the proposal should be rejected until the question and answer is clearly understood. In other words, the default should be NO to changes and only changed to YES if you believe that there is a clear and compelling need to solve a broad problem of governance.
The proposed changes will be posted here with some comments, in blue, I will offer for consideration.
The meeting was pleasantly and ably conducted by Mik L who hit the right note of competent and folksy. I couldn't help thinking how different the inclusive and respectful tone of the meeting was compared to BOD meetings. It was "standing room only". (KL made a comment that he wished he could get this kind of turnout at BOD meetings and I almost felt sorry for him for a nanosecond.) People seemed comfortable asking questions and Mik offered answers that mostly made sense--with a few exceptions. It was very apparent that he was aware of the possible trouble amendments and his discomfort showed on the covenant change proposing to lower the voting threshold to pass future amendments and on the barrage of questions on #14 (language change expanding powers of Board of Directors to decide about commercial activity).
S-bag LAKE OWNERS ASSOCIATION, INC. PROPOSED COVENANT CHANGES January 7, 2014
Current Covenant:
2. Said lot sH all be used exclusively as a recreational vehicle site.*
Proposed Covenant:
2. Said lot may be used as either a recreational vehicle site or a manufactured/modular home site. The words "Lot" and "Site" are synonymous and are interchangeable.
Why Changed:
Add manufactured/module home and move second sentence from an (*) asterisk at bottom of page to a covenant.
Seems reasonable to me with reservation: I wish that some effort had been made by a special committee to "previsit" the new, unanticipated problems the park might have to deal with with the increased density of population and additional stress on infrastructure--especially the wastewater plant. Probably this advance theoretical planning would not change the desire to amend in any case. If I could vote, I would vote YES.
Current Covenant:
3. All recreational vehicle sites sH all be reserved and restricted for recreational vehicles. For the purpose of this Covenant and Restriction, a recreational vehicle is defined in the Rules and Regulations as amended from time to time. Mobile homes sH all be excluded from this definition and are therefore excluded from use of the sites.
Proposed Covenant:
3. RESERVED
Why Changed:
Remove recreation vehicle verbiage, clean up covenants; now addressed in other covenants. The word
"RESERVE" is used to retain the current Covenant numbering.
#3 will stay if #2 is not passed. If #2 is passed, #3 is unnecessary.
Current Covenant:
4. One (1) recreational vehicle sH all be located and maintained on each site, except for sites classified as Duplex, Unit II Plat Book 61, Pages 18 through 20. Duplex sites have two (2) sections and one (1) recreational vehicle may be located on each section. All recreational vehicles, all permanent exterior improvements to the recreational vehicle, and permanent improvements to the property sH all be approved by the Association.
Proposed Covenant:
4. One (1) recreational vehicle or manufactured/modular home may be located and maintained on each site, except for sites classified as Duplex, Unit II Plat Book 61, Pages 18-20. Duplex sites have two (2) sections; one (1) recreational vehicle may be located on one section, and one (1) recreational vehicle or manufactured/modular home on the other section. All permanent exterior improvements to the recreational vehicle or manufactured/modular home, and permanent improvements to the property sH all be approved by the Association.
Why Changed:
Add manufactured/modular verbiage
According to the rules committee, there is only one lot left that is not built out and so the change only affects one lot. Not True. It affects every future owner of this type of lot--the successors in title. I don't think that this arrangement has been well-thought out--usage is too intense--and I would vote NO if I were voting and get the committee to rethink the entire issue within a broader context than "one lot" as currently exists.
Importantly, passage of #4 is predicated on passage of #2. If #2 is not passed and #4 is passed, you have a group of lots where manufactured homes are permitted. This is a piggyback problem.
Page 1
Current Covenant:
6. No hedges in excess of twenty-four (24) inches in height and no fences, walls, mailboxes, clotheslines, freestanding radio or television antennas sH all be permitted on any site. Only Association-approved improvements and equipment will be allowed on each site.
Proposed Covenant:
6. No hedges in excess of twenty-four (24) inches in height and no fences, walls or post-mounted mailboxes sH all be permitted on any site. Only Association approved improvements and equipment will be allowed on each site.
Why Changed:
Remove antenna and clothesline verbiage per current Federal and state rulings, and add "post- mounted" to mailbox.
Makes sense-I'd vote YES if I were voting. Federal and state laws trump our doc's use restrictions and we really don't have any choice in reality. This is just an update to conform with superior statutory law.
Current Covenant:
7. No sign of any character sH all be displayed or placed upon any site except a sign bearing the name of the owner, not to exceed five (5) inches by twenty (20) inches. No sign sH all be attached to trees in any location in S-bag Lake.
Proposed Covenant:
7. No sign of any character sH all be displayed or placed upon any site except as authorized per the Associations' Rules and Regulations, and Florida Statutes, Chapter 720, as may be amended from time to time. No sign sH all be attached to trees in S-bag Lake.
Why Changed:
Move control of signs to the Rules and Regulations.
Ok I admit to being spooked by the recent proliferation of signs being placed on every open space on the property with a new "rule de jour". If the purpose of the change to move control of "signs" to R & R, why add "...and Florida Statutes, chapter 720, as may be amended from time to time"? Why not just add that signs have to be approved by the association and move it to R & R? And why was this particular covenant singled out for a change? The only problems with signs have been management company putting them up everywhere--not owners' putting up signs on their lot. It is not really of the same importance as "prohibition on commercial activity" and certainly not a broad problem of governance. Signs come under similar societal changes as flags, antennas and clotheslines and are also subject to local ordinances. Again, it fails the "What problem are we trying to solve test? This one should just be left as is "If it ain't broke, don't fix it". If I was voting, I would vote NO on principal.
Current Covenant:
11.No commercial activity of any kind sH all be conducted on any site, except as provided in the Regulations, and those areas designated by the Association for commercial use.
Proposed Covenant:
11.No commercial activity of any kind sH all be conducted on any site, except as provided in the Regulations, and those areas designated by the Board of Directors for commercial use.
Why Changed:
Change Association to Board of Directors.
This is the proposed changed that caused people to pay attention--and rightfully so. People are starting to really see how the actions of a "compromised" board can drastically alter the pleasant lifestyle of a community. There is also something embarrassingly transparent in this obvious attempt by the board to get full control over commercial activity. (I have always thought that there are other "agents" of the BOD that want to set up auxillary, fee-based services in SLR such as real estate sales & leasing). You can't fool all the people all the time--people picked right up on the relationship of this proposed covenant change and the illegal internet assessment and occupation of K C N commercial activity on common property. I am not concerned about this one having any chance of passing!
Resounding NO vote if I was gonna vote!
PAGE 2
Current Covenant:
13. Each site owner sH all be considered a member of S-bag Lake Owner's Association, Inc., (hereafter referred to as the Association.) The Association owns the following common property and facilities located within S-bag Lake: the streets, fences, greenways, parks, beaches, that portion of S-bag Lake included in the plat of the property, the lagoon, canals, bulkheads, bridges, culverts, water and waste treatment plants, on site and distribution systems, street lighting system, street and other signs, recreation center, comfort stations, laundry facilities, entrance gate and landscaping, pools, boat docks, trading post, post office, transfer station, greenhouse, storage area and such other common buildings and facilities as may be acquired by the Association in the future. The Association sH all levy and collect a reasonable assessment against site owners sufficient to cover each lot owners' proportionate share of actual cost of operating and maintaining all these said activities and for providing water, electricity and garbage disposal services, sewage service, general maintenance, and carrying out of its managerial duties hereunder. Likewise, the Association sH all include in the assessments so made, a sum adequate to pay all real property and other taxes on said facilities. The collection of these sums sH all be provided for in an adequate manner to assure the maintenance necessary. The assessments for expenses sH all be levied in accordance with the by-laws of the Association.
Proposed Covenant:
13. Each site owner sH all be considered a member of S-bag Lake Owners Association, Inc., (hereafter referred to as the Association.) The Association owns the following common property and facilities located within S-bag Lake: The streets, fences, greenways, parks, beaches, that portion of S-bag Lake included in the plat of the property, the lagoon, canals, bulkheads, bridges, culverts, water and waste treatment plants, on site and distribution systems, street lighting system, street and other signs, recreation center, comfort stations, laundry facilities, entrance gate and landscaping, pools, boat dock, post office, transfer stations, storage area, Memorial H all, club house, beach house and such other common buildings and facilities as may be acquired by the Association in the future. The Association sH all levy and collect a reasonable assessment against site owners sufficient to cover each lot owners' proportionate share of actual cost of operating and maintaining all these said activities and for providing water, electricity and garbage disposal services, sewage service, general maintenance, and carrying out of its managerial duties hereunder. Likewise, the Association sH all include in the assessments so made, a sum adequate to pay all real property and other taxes on said facilities. The collection of these sums sH all be provided for in an adequate manner to assure the maintenance necessary. The assessments for expenses sH all be levied in accordance with the by-laws of the Association.
Creation of the Lien and Personal Obligation of Assessments. Each Owner of any Lot by acceptance of a deed thereof, whether or not it sH all be so expressed in such deed, is deemed to covenant and agree to pay the Association: (1) annual assessments or charges; (2) special assessments for capital improvements, such assessments to be established and collected as hereinafter provided. The annual and special assessments, together with interest, costs, and reasonable attorneys' fees sH all be a charge on the land and sH all be a continuing lien upon the Property against which each such assessments is made. Additionally, the costs and fees incurred by the Association as a result of the Association's defense of any mortgage foreclosure proceeding as to any property, or similar proceeding where the Association asserts its lien rights and interest on a property, sH all also be a charge on the land and become part of the assessment and continuing lien on the property. All such assessments, together with interest, costs, and reasonable attorneys' fees for collection thereof, sH all also be the personal obligation of the person who was the Owner of such Property at the time when the assessment fell due. The personal obligation for delinquent assessments sH all not pass to his successor in title unless expressly assumed by them.
Subordination of the Lien to Mortgage. The lien of the assessments provided for herein sH all be subordinate to the lien of any first mortgage. Sale or transfer of any Lot sH all not affect the assessment lien. However, the sale or transfer of any Lot pursuant to mortgage foreclosure or any proceeding in lieu thereof sH all not extinguish the lien of such assessments as to payments which became due prior to such sale or transfer, as set forth in Chapter 720, Florida Statutes, which may be amended from time to time. No sale or transfer sH all relieve such Lot for liability for any assessments thereafter becoming due or from the lien thereof.
Why Changed:
Correct Owners' to Owners, remove trading post and greenhouse, add Memorial H all, club house, and beach house to list of buildings. Add last two paragraphs on the advice of our Attorney per Florida Statute 720.
Editor Comment: Forget Owners to Owners comment--it was a misreading of the handout and referred to the punctuation of the correct use of "Owners" --not to a provision "Owners to Owners". Correct Owners to Owners? What Owners to Owners? There is no provision in the current document that in any way relates to Owners to Owners--whatever that means. It is a new provision and fails the Amendment test. It is not an amendment.
As an aside the lien power of the Association is well documented in all the documents; what is the need for restating the obvious? The legislature is changing Florida laws concerning mortgage foreclosures and accumulated assessments nearly every session. There are more revisions to come. Owners are subject to these laws under common law and it does not clarify or broaden a covenanted use restriction. It adds something new which I would want to know more about why put it in the Covenants. It is procedural law governing the treatment of mortgage foreclosures which is under constant revision during the mortgage crisis in Florida. I can't imagine how "immortalizing" a constantly changing procedural law in our covenants can be beneficial to a covenants document. I think it will possibly confuse and cause problems when it gets changed next year...and the next.
And why add it to a covenant describing details about our common property? Is that to avoid the appearance of adding a New Covenant? This fails the "sniff test" and "common sense test". It's messy and unnecessary and possibly illegal because it is not an Amendment to anything. It is not ripe to vote on. Unless the attorney can make a decent case for the compelling need and show that it can be adopted as an amendment to something, as well as validate the placement within the document, I would vote NO (if I were voting) and revisit and clarify the issue next year.
Current Covenant:
15. These Covenants and Restrictions may be amended or released provided said amendment or release is
Page 3
approved by written ballot by the owners of not less than three-fourths (3/4) in number of the lots shown on the above-described plats.
Proposed Covenant:
15. These Covenants and Restrictions may be amended or released provided said amendment or release is approved by written ballot by the owners of not less than three-fourths (3/4) of ballots received, provided a quorum of 51% of members are represented.
Why Changed:
Lower number needed to approve Covenants from number of lots to % of ballots received, provided at least a quorum of 51% of members is represented. From past election results, the required number of votes to change a covenant would change from 592 to 450+/-, still a difficult number to reach!
This generated many questions and rightly so. There are many excellent reasons to keep the voting threshold to change covenants very high. The 75% of membership is generally recognized as unrealistically high and puts associations needing to make changes in a chokehold and unable to do anything.
First and foremost, covenants are the superior governing document specifying the property and contractual rights of owners. Our forefathers (ha the developers!) did not want them changed and made it difficult with a high voting threshold. Covenants give constructive notice to the public about the "bundle of rights" that attach to the real estate so they are just not about Saddlebaggers. You do not want to change them without intensive scrutiny and the language of change must be precise and meet a legal standard which must be careful not to tred on the original contract rights of owners. Amendments can "flesh out" the original covenants or expand rights--but they cannot take away those rights. Associations that inadvertantly abrogate rights get in trouble down the road when cH allenged and cost Associations gobs of legal fees.
Covenants are also now used by underwriters for lending institutions considering loans for property located within CID's (common interest developments). These types of loans carry special risks because of the powers of Associations to alter the value of the collateral real estate. Underwriters who read atypical or loosey-goosey language in Covenants will squirm and refuse to "pass" the property for a loan.
I believe that this change might be unfavorably regarded by loan underwriters and make it more difficult to acquire financing. The voting threshold reduction is a drastic one--FIFTY percent! It is not a typical threshold among CID's and this fact alone will raise a flag. Typically, CID's who are able to pass a voting threshold reduce it from 3/4 to 2/3; and a few to 50%. Those percentages relate to total parcels and are not qualified by a "quorum requirement" as this amendment proposes to do.
Here is how the #'s change under the various voting parameters:
Current (75% of 787 parcels): 592 to pass
Proposed (75% of ballots received with a 51% quorum: A 51% quorum reduces the 787 by half to 402 parcels and then the 75% affirmative vote is calculated): 302 to pass
Notice that the vote is for BALLOTS RECEIVED by 51% of parcels! Not TOTAL "voting parcels" or "entire membership". Very unusual and Very low. This is too aggressive. Too bad because SLohA needs to adjust the threshold but this is just a bad idea.
Other Associations: 2/3 of 787 parcels = 528 In my opinion, this is more appropriate and reflective of the superior status of the document.
As you can see, the lowering is 50%+ and is LESS THAN the voting threshold to pass a RULE which requires 50% of parcels: 394 to pass a rule versus 302 to pass a covenant. This is just nonsense.
(I am unable to understand the number in the example above ie 592 vs 450+ under any scenario. Perhaps someone understands how that number was arrived at. I do admit to being numbers-cH allenged except for very simple arithmetic.)
Rules are on the very bottom of the legal pile in terms of the hierarchy of governing documents and always carry the lowest voting thresholds. To have our covenants easier to change than our rules will surely raise a flag among anyone risk-assessing SLohA for whatever purpose.
Among other things, it raises the question of "Why" and calls attention to the proportion of investor-owned properties in here-- which is an undesirable (riskier) condition for lenders. In a very rapidly changing industry and an economic climate that seems to be looking for ways to NOT extend loans, a too-low voting threshold gives them a reason to deny.
I would vote NO on this, if I were voting.
Overall, I am not excited or impressed with the proposed changes and I think that most of them will not/should not pass. The above is provided for informational and educational purposes. I am not an attorney and I can't even vote, so if you require legal clarification upon which to act, you should see an attorney.
The content of the proposed amendments is another matter. As a general starting point, it should be remembered that covenants were drawn to resist changes by making amendments nearly impossible to achieve. Changes should also be tested with a basic question "What problem are we trying to solve with this proposed change"? If the answer to that question is unclear, or the benefits are dubious or not present, the proposal should be rejected until the question and answer is clearly understood. In other words, the default should be NO to changes and only changed to YES if you believe that there is a clear and compelling need to solve a broad problem of governance.
The proposed changes will be posted here with some comments, in blue, I will offer for consideration.
The meeting was pleasantly and ably conducted by Mik L who hit the right note of competent and folksy. I couldn't help thinking how different the inclusive and respectful tone of the meeting was compared to BOD meetings. It was "standing room only". (KL made a comment that he wished he could get this kind of turnout at BOD meetings and I almost felt sorry for him for a nanosecond.) People seemed comfortable asking questions and Mik offered answers that mostly made sense--with a few exceptions. It was very apparent that he was aware of the possible trouble amendments and his discomfort showed on the covenant change proposing to lower the voting threshold to pass future amendments and on the barrage of questions on #14 (language change expanding powers of Board of Directors to decide about commercial activity).
S-bag LAKE OWNERS ASSOCIATION, INC. PROPOSED COVENANT CHANGES January 7, 2014
Current Covenant:
2. Said lot sH all be used exclusively as a recreational vehicle site.*
Proposed Covenant:
2. Said lot may be used as either a recreational vehicle site or a manufactured/modular home site. The words "Lot" and "Site" are synonymous and are interchangeable.
Why Changed:
Add manufactured/module home and move second sentence from an (*) asterisk at bottom of page to a covenant.
Seems reasonable to me with reservation: I wish that some effort had been made by a special committee to "previsit" the new, unanticipated problems the park might have to deal with with the increased density of population and additional stress on infrastructure--especially the wastewater plant. Probably this advance theoretical planning would not change the desire to amend in any case. If I could vote, I would vote YES.
Current Covenant:
3. All recreational vehicle sites sH all be reserved and restricted for recreational vehicles. For the purpose of this Covenant and Restriction, a recreational vehicle is defined in the Rules and Regulations as amended from time to time. Mobile homes sH all be excluded from this definition and are therefore excluded from use of the sites.
Proposed Covenant:
3. RESERVED
Why Changed:
Remove recreation vehicle verbiage, clean up covenants; now addressed in other covenants. The word
"RESERVE" is used to retain the current Covenant numbering.
#3 will stay if #2 is not passed. If #2 is passed, #3 is unnecessary.
Current Covenant:
4. One (1) recreational vehicle sH all be located and maintained on each site, except for sites classified as Duplex, Unit II Plat Book 61, Pages 18 through 20. Duplex sites have two (2) sections and one (1) recreational vehicle may be located on each section. All recreational vehicles, all permanent exterior improvements to the recreational vehicle, and permanent improvements to the property sH all be approved by the Association.
Proposed Covenant:
4. One (1) recreational vehicle or manufactured/modular home may be located and maintained on each site, except for sites classified as Duplex, Unit II Plat Book 61, Pages 18-20. Duplex sites have two (2) sections; one (1) recreational vehicle may be located on one section, and one (1) recreational vehicle or manufactured/modular home on the other section. All permanent exterior improvements to the recreational vehicle or manufactured/modular home, and permanent improvements to the property sH all be approved by the Association.
Why Changed:
Add manufactured/modular verbiage
According to the rules committee, there is only one lot left that is not built out and so the change only affects one lot. Not True. It affects every future owner of this type of lot--the successors in title. I don't think that this arrangement has been well-thought out--usage is too intense--and I would vote NO if I were voting and get the committee to rethink the entire issue within a broader context than "one lot" as currently exists.
Importantly, passage of #4 is predicated on passage of #2. If #2 is not passed and #4 is passed, you have a group of lots where manufactured homes are permitted. This is a piggyback problem.
Page 1
Current Covenant:
6. No hedges in excess of twenty-four (24) inches in height and no fences, walls, mailboxes, clotheslines, freestanding radio or television antennas sH all be permitted on any site. Only Association-approved improvements and equipment will be allowed on each site.
Proposed Covenant:
6. No hedges in excess of twenty-four (24) inches in height and no fences, walls or post-mounted mailboxes sH all be permitted on any site. Only Association approved improvements and equipment will be allowed on each site.
Why Changed:
Remove antenna and clothesline verbiage per current Federal and state rulings, and add "post- mounted" to mailbox.
Makes sense-I'd vote YES if I were voting. Federal and state laws trump our doc's use restrictions and we really don't have any choice in reality. This is just an update to conform with superior statutory law.
Current Covenant:
7. No sign of any character sH all be displayed or placed upon any site except a sign bearing the name of the owner, not to exceed five (5) inches by twenty (20) inches. No sign sH all be attached to trees in any location in S-bag Lake.
Proposed Covenant:
7. No sign of any character sH all be displayed or placed upon any site except as authorized per the Associations' Rules and Regulations, and Florida Statutes, Chapter 720, as may be amended from time to time. No sign sH all be attached to trees in S-bag Lake.
Why Changed:
Move control of signs to the Rules and Regulations.
Ok I admit to being spooked by the recent proliferation of signs being placed on every open space on the property with a new "rule de jour". If the purpose of the change to move control of "signs" to R & R, why add "...and Florida Statutes, chapter 720, as may be amended from time to time"? Why not just add that signs have to be approved by the association and move it to R & R? And why was this particular covenant singled out for a change? The only problems with signs have been management company putting them up everywhere--not owners' putting up signs on their lot. It is not really of the same importance as "prohibition on commercial activity" and certainly not a broad problem of governance. Signs come under similar societal changes as flags, antennas and clotheslines and are also subject to local ordinances. Again, it fails the "What problem are we trying to solve test? This one should just be left as is "If it ain't broke, don't fix it". If I was voting, I would vote NO on principal.
Current Covenant:
11.No commercial activity of any kind sH all be conducted on any site, except as provided in the Regulations, and those areas designated by the Association for commercial use.
Proposed Covenant:
11.No commercial activity of any kind sH all be conducted on any site, except as provided in the Regulations, and those areas designated by the Board of Directors for commercial use.
Why Changed:
Change Association to Board of Directors.
This is the proposed changed that caused people to pay attention--and rightfully so. People are starting to really see how the actions of a "compromised" board can drastically alter the pleasant lifestyle of a community. There is also something embarrassingly transparent in this obvious attempt by the board to get full control over commercial activity. (I have always thought that there are other "agents" of the BOD that want to set up auxillary, fee-based services in SLR such as real estate sales & leasing). You can't fool all the people all the time--people picked right up on the relationship of this proposed covenant change and the illegal internet assessment and occupation of K C N commercial activity on common property. I am not concerned about this one having any chance of passing!
Resounding NO vote if I was gonna vote!
PAGE 2
Current Covenant:
13. Each site owner sH all be considered a member of S-bag Lake Owner's Association, Inc., (hereafter referred to as the Association.) The Association owns the following common property and facilities located within S-bag Lake: the streets, fences, greenways, parks, beaches, that portion of S-bag Lake included in the plat of the property, the lagoon, canals, bulkheads, bridges, culverts, water and waste treatment plants, on site and distribution systems, street lighting system, street and other signs, recreation center, comfort stations, laundry facilities, entrance gate and landscaping, pools, boat docks, trading post, post office, transfer station, greenhouse, storage area and such other common buildings and facilities as may be acquired by the Association in the future. The Association sH all levy and collect a reasonable assessment against site owners sufficient to cover each lot owners' proportionate share of actual cost of operating and maintaining all these said activities and for providing water, electricity and garbage disposal services, sewage service, general maintenance, and carrying out of its managerial duties hereunder. Likewise, the Association sH all include in the assessments so made, a sum adequate to pay all real property and other taxes on said facilities. The collection of these sums sH all be provided for in an adequate manner to assure the maintenance necessary. The assessments for expenses sH all be levied in accordance with the by-laws of the Association.
Proposed Covenant:
13. Each site owner sH all be considered a member of S-bag Lake Owners Association, Inc., (hereafter referred to as the Association.) The Association owns the following common property and facilities located within S-bag Lake: The streets, fences, greenways, parks, beaches, that portion of S-bag Lake included in the plat of the property, the lagoon, canals, bulkheads, bridges, culverts, water and waste treatment plants, on site and distribution systems, street lighting system, street and other signs, recreation center, comfort stations, laundry facilities, entrance gate and landscaping, pools, boat dock, post office, transfer stations, storage area, Memorial H all, club house, beach house and such other common buildings and facilities as may be acquired by the Association in the future. The Association sH all levy and collect a reasonable assessment against site owners sufficient to cover each lot owners' proportionate share of actual cost of operating and maintaining all these said activities and for providing water, electricity and garbage disposal services, sewage service, general maintenance, and carrying out of its managerial duties hereunder. Likewise, the Association sH all include in the assessments so made, a sum adequate to pay all real property and other taxes on said facilities. The collection of these sums sH all be provided for in an adequate manner to assure the maintenance necessary. The assessments for expenses sH all be levied in accordance with the by-laws of the Association.
Creation of the Lien and Personal Obligation of Assessments. Each Owner of any Lot by acceptance of a deed thereof, whether or not it sH all be so expressed in such deed, is deemed to covenant and agree to pay the Association: (1) annual assessments or charges; (2) special assessments for capital improvements, such assessments to be established and collected as hereinafter provided. The annual and special assessments, together with interest, costs, and reasonable attorneys' fees sH all be a charge on the land and sH all be a continuing lien upon the Property against which each such assessments is made. Additionally, the costs and fees incurred by the Association as a result of the Association's defense of any mortgage foreclosure proceeding as to any property, or similar proceeding where the Association asserts its lien rights and interest on a property, sH all also be a charge on the land and become part of the assessment and continuing lien on the property. All such assessments, together with interest, costs, and reasonable attorneys' fees for collection thereof, sH all also be the personal obligation of the person who was the Owner of such Property at the time when the assessment fell due. The personal obligation for delinquent assessments sH all not pass to his successor in title unless expressly assumed by them.
Subordination of the Lien to Mortgage. The lien of the assessments provided for herein sH all be subordinate to the lien of any first mortgage. Sale or transfer of any Lot sH all not affect the assessment lien. However, the sale or transfer of any Lot pursuant to mortgage foreclosure or any proceeding in lieu thereof sH all not extinguish the lien of such assessments as to payments which became due prior to such sale or transfer, as set forth in Chapter 720, Florida Statutes, which may be amended from time to time. No sale or transfer sH all relieve such Lot for liability for any assessments thereafter becoming due or from the lien thereof.
Why Changed:
Correct Owners' to Owners, remove trading post and greenhouse, add Memorial H all, club house, and beach house to list of buildings. Add last two paragraphs on the advice of our Attorney per Florida Statute 720.
Editor Comment: Forget Owners to Owners comment--it was a misreading of the handout and referred to the punctuation of the correct use of "Owners" --not to a provision "Owners to Owners". Correct Owners to Owners? What Owners to Owners? There is no provision in the current document that in any way relates to Owners to Owners--whatever that means. It is a new provision and fails the Amendment test. It is not an amendment.
As an aside the lien power of the Association is well documented in all the documents; what is the need for restating the obvious? The legislature is changing Florida laws concerning mortgage foreclosures and accumulated assessments nearly every session. There are more revisions to come. Owners are subject to these laws under common law and it does not clarify or broaden a covenanted use restriction. It adds something new which I would want to know more about why put it in the Covenants. It is procedural law governing the treatment of mortgage foreclosures which is under constant revision during the mortgage crisis in Florida. I can't imagine how "immortalizing" a constantly changing procedural law in our covenants can be beneficial to a covenants document. I think it will possibly confuse and cause problems when it gets changed next year...and the next.
And why add it to a covenant describing details about our common property? Is that to avoid the appearance of adding a New Covenant? This fails the "sniff test" and "common sense test". It's messy and unnecessary and possibly illegal because it is not an Amendment to anything. It is not ripe to vote on. Unless the attorney can make a decent case for the compelling need and show that it can be adopted as an amendment to something, as well as validate the placement within the document, I would vote NO (if I were voting) and revisit and clarify the issue next year.
Current Covenant:
15. These Covenants and Restrictions may be amended or released provided said amendment or release is
Page 3
approved by written ballot by the owners of not less than three-fourths (3/4) in number of the lots shown on the above-described plats.
Proposed Covenant:
15. These Covenants and Restrictions may be amended or released provided said amendment or release is approved by written ballot by the owners of not less than three-fourths (3/4) of ballots received, provided a quorum of 51% of members are represented.
Why Changed:
Lower number needed to approve Covenants from number of lots to % of ballots received, provided at least a quorum of 51% of members is represented. From past election results, the required number of votes to change a covenant would change from 592 to 450+/-, still a difficult number to reach!
This generated many questions and rightly so. There are many excellent reasons to keep the voting threshold to change covenants very high. The 75% of membership is generally recognized as unrealistically high and puts associations needing to make changes in a chokehold and unable to do anything.
First and foremost, covenants are the superior governing document specifying the property and contractual rights of owners. Our forefathers (ha the developers!) did not want them changed and made it difficult with a high voting threshold. Covenants give constructive notice to the public about the "bundle of rights" that attach to the real estate so they are just not about Saddlebaggers. You do not want to change them without intensive scrutiny and the language of change must be precise and meet a legal standard which must be careful not to tred on the original contract rights of owners. Amendments can "flesh out" the original covenants or expand rights--but they cannot take away those rights. Associations that inadvertantly abrogate rights get in trouble down the road when cH allenged and cost Associations gobs of legal fees.
Covenants are also now used by underwriters for lending institutions considering loans for property located within CID's (common interest developments). These types of loans carry special risks because of the powers of Associations to alter the value of the collateral real estate. Underwriters who read atypical or loosey-goosey language in Covenants will squirm and refuse to "pass" the property for a loan.
I believe that this change might be unfavorably regarded by loan underwriters and make it more difficult to acquire financing. The voting threshold reduction is a drastic one--FIFTY percent! It is not a typical threshold among CID's and this fact alone will raise a flag. Typically, CID's who are able to pass a voting threshold reduce it from 3/4 to 2/3; and a few to 50%. Those percentages relate to total parcels and are not qualified by a "quorum requirement" as this amendment proposes to do.
Here is how the #'s change under the various voting parameters:
Current (75% of 787 parcels): 592 to pass
Proposed (75% of ballots received with a 51% quorum: A 51% quorum reduces the 787 by half to 402 parcels and then the 75% affirmative vote is calculated): 302 to pass
Notice that the vote is for BALLOTS RECEIVED by 51% of parcels! Not TOTAL "voting parcels" or "entire membership". Very unusual and Very low. This is too aggressive. Too bad because SLohA needs to adjust the threshold but this is just a bad idea.
Other Associations: 2/3 of 787 parcels = 528 In my opinion, this is more appropriate and reflective of the superior status of the document.
As you can see, the lowering is 50%+ and is LESS THAN the voting threshold to pass a RULE which requires 50% of parcels: 394 to pass a rule versus 302 to pass a covenant. This is just nonsense.
(I am unable to understand the number in the example above ie 592 vs 450+ under any scenario. Perhaps someone understands how that number was arrived at. I do admit to being numbers-cH allenged except for very simple arithmetic.)
Rules are on the very bottom of the legal pile in terms of the hierarchy of governing documents and always carry the lowest voting thresholds. To have our covenants easier to change than our rules will surely raise a flag among anyone risk-assessing SLohA for whatever purpose.
Among other things, it raises the question of "Why" and calls attention to the proportion of investor-owned properties in here-- which is an undesirable (riskier) condition for lenders. In a very rapidly changing industry and an economic climate that seems to be looking for ways to NOT extend loans, a too-low voting threshold gives them a reason to deny.
I would vote NO on this, if I were voting.
Overall, I am not excited or impressed with the proposed changes and I think that most of them will not/should not pass. The above is provided for informational and educational purposes. I am not an attorney and I can't even vote, so if you require legal clarification upon which to act, you should see an attorney.
