SPOTLIGHT ROYDEN-MAY NEWSLETTER
Below is a Newsletter used in a protracted battle with a “Rogue HOA”.
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Dear neighbors, continuing our education and advocacy on behalf of individual homeowners, we are sad to report that our current board has again botched the 2017 Annual Assessment.
By now you all have received the Presidents’ LETTER dated April 29, 2016, You probably have thrown it aside, ……..But wait! Violations are screaming off of the page!!!
Yes, the LETTER represents 10 years and counting,. of violations to a simple Covenant-Article IV-Covenant for Maintenance Assessments!
On May 31, all of the current Directors’ terms end….All SEVEN…..That means on June 1, 2016….. Royden will have NO MEMBER ELECTED BOARD!!!
This continued display of incompetence and lack of understanding of simple HOA governance and Roberts’ Rules for a non-profit, must clearly end.
With 7 open board slots this year,….. the END IS NEAR….But we need to get engaged members!!!
Here are the FACTS (all in one place), issues we have been writing about for years and the incompetence of the LETTER!
Spoiler Alert…..It gets’ into the nitty gritty details of budgetary procedure. You can believe us, and now skip to the END…If NOT…Here it IS!
All you need to know, to understand the violations, included in the LETTER from THE President, are two provisions from a copy of the Royden By-Laws and Covenants.
The Covenants for Annual Maintenance Assessments are on the website and covered in the subdivision Phase I/II-Article IIIA-Section 4 and….. Phase III and Phase IV-Article IV-Creation of lien and personal obligation. Less than 2 pages and you are an informed homeowner (not many are!) Here’s what you will see that will irrefutably confirm the past violations.
1) “Fixing of the Maintenance Assessments” is a final billing action, and legally binding action, made by the board of directors for a non-profit organization.
The FIXING of the Annual Assessments, must be made by the Board by May 1 of each year. Article IV-Section 7-Commencement…. Did you get that from the LETTER…NO!
2)The Fixing Action involves Annual and Special Assessments, is a Lien and Bill that is DUE and PAYABLE on May 31. Also Section 7…Did you get that from the LETTER?…NO!
3) The Maximum Annual Assessment allowed is $210.00, as stated in Article IV-Section 3. The LETTER Statement “For the coming year the board has fixed the assessment at $320.00” violates Article IV at several levels and mainly the Maximum Annual Assessment of $210.00. Just that Simple folks! but wait…the Board would have you think this clause was amended…NO WAY!
4) The deceptive Attempt to Amend Covenants last year was a failed exercise in proper HOA governance. Not a single proscribed resolution was outlined in last years’ “ballot” by the legally challenged treasurer(a lawyer no less). No resolution was properly presented and voted upon last year, that can pretend to meet NC Law or the CCRs’. However, for the first time, the Board tried to paper the record with the incorrect $320.00 value. They employed the Maximum Annual Assessment language that is only covered and stated in……….. Article IV . No amendments took place and Article IV was acknowledged!
5)The LETTER did not include an estimate of the ACTUAL Annual Expense incurred in 2015-2016 nor the planned ANNUAL BUDGET for 2016-2017. The LETTER mentions but does not show “the basis” or “the projection” of what the 2016-2017 Annual Budget expenses are to be included in the Annual Budget. The Article IV Annual Maintenance budgets’ PURPOSE allows for only the total amount to be spent on common area maintenance only, by category.
6)The Board has obviously failed to develop the required PRO-FORMA Financial statement for 2015-2016 by expense category. The 2016-2017 Annual Budget and 10% Contingency credit are then determined from the PRO_FORMA Financials (a “pro-forma” is 11 month actual/one month projected Income Statement, Cash Flow and Balance Sheet) A concept that I am sure no one on the board comprehends!!!
7)From the PRO-FORMA, the Board could have determined the Annual Assessment and the 10% Contingency Credit *if Total assets exceed the Covenant). They didn’t calculate both categories so….NO FIXING WAS MADE in the LETTER, before May 1, 2016, as required by the covenant Article IV.
Note: Last year at May 31, 2015 Total Assets were $36,660.62. A 10% Contingency Reserve Credit of $244.65 was due but never applied to each members’ account. No Mention was made as to the projected status of the 10% Contingency Reserve credit this year and how much credit was to be given in the fallacious “FIXING” in the LETTER.
8) So, it’s now past May 1, 2016 and we have a flaw filled fixing letter, that has no budgetary foundation, related to any past or future Annual Budget or any idea as to the status of the 10% Contingency reserve credit…..AND…..an inference of revelations to come in the ANNUAL PACKAGE!!! TOO Late. Any meeting in June was to be an annual meeting to introduce the new board and outline future plans!!!!
9)Also Hidden in the LETTER as subterfuge is a key SPECIAL ASSESSMENT violation(s) related to $8,500 in “structural wall repairs”. Quietly over the past 4 years, the Royden Board has improperly spent over $20,000.00 in reconstruction of our outdated stucco walls. Article IV-Section 4 clearly states that a separate Special assessment, be FIXED, each year, whenever reconstruction is required. The Royden Boards have never followed this covenant in the past 12 years!!!!! A total disregard of clear and unambiguous covenant language.
10) Accordingly, all members must conclude that the LETTER can only be characterized as MUMBO JUMBO, from an obviously “accounting/budget making” challenged president (and treasurer).
Certainly the LETTER presented nothing that would make our homeowners’ proud. The letter clearly shows a total lack understanding of the responsibilities of a homeowner association board and can only be concluded to be incompetent drivel……………………………..BUT….WHO CARES!!!!!-Its’ only $320.00!!!!…say most of our members…they’re just volunteers!!!!……VIOLATING THE LAW!!!!!
Then there is the Royden SCANDAL COVER-UP……Lack of issue visibility, lack of open board meetings, availability of minutes, culminating with the fact that a member. Rinaldi, was sued/sanctioned, by the Royden board, earlier this year, without member approval, just because he uncovered the boards malfeasance for over 10 years’. Royden has been awarded over $6,000.00 in Attorney’s fees, payable in June 2016. Even though the Board has clearly admitted to the violations his claim presented to the courts.
The protracted legal action, by Rinaldi, over the last 2 years, was unreported to the membership, just like the probable miss-appropriation of funds that occurred between 2011-2014. If NOT, then why not issue the past financial information as required by NC Law and the covenants. WHY…because prior Boards have been miss-led by their attorneys, Horrack Talley, and now are forced by the Directors’ and Officers Liability Insurance carrier, to perpetuate violations to the RHA covenants and NC Law. Who will stand up and sue them now…Look what they did to Rinaldi and what it cost him!!!!!..We need JUST ONE!
As clearly confirmed by our newsletters, the RHA Board has botched the annual assessment for 2016-2017 and failed to meet Article IV-Covenant for Maintenance Assessments.
The Board basically acknowledged that violations had been made for the past 10 years, with two actions introduced last year, in response to our prior lawsuit:
I) The Board acknowledged that A Maximum Annual Assessment provision was part of the RHA Covenants. This provision is in……..ARTICLE IV!!!!
ii) The Board acknowledged that Total Assets were the same as fiscal reserve and that excesses should result in a credit. This Provision also is in…..ARTICLE IV.
iii) The Quid pro quo then is…..ARTICLE IV IS THE CONTROLLING COVENANT FOR ALL ANNUAL MAINTENANCE ASSESSMENTS.-The major claim of Rinaldis’ Lawsuits.
These Board acknowledgements can therefore no longer be covered up and clears the way for the NEW BOARD and the seven (7) open slots as of May 31, 2016, to file a DIRECTORS’ AND OFFICERS’ LIABILITY claim, against the offending prior Attorneys, Boards’ and Presidents..Yes, Michael Hunter and Horrack Talley are offending parties as they hold a relationship of assumed trust and negligently allowed the violations to persist. The Directors’ and Officers Liability claim is estimated to be over $350,000.00 in improper, un-approved Annual Maintenance Assessments, over the past 10 years.
Our extensive files, factual basis and exhibits will make prosecution of our claim a piece of cake, for any new attorney group.
Our files have over 300 hours of research and $10,000.00 in legal/sanctions costs for the sole purpose of making ROYDEN a better community.
With a successful D&O claim, each Royden Homeowner would then be entitled to over $2,400.00. NOW FOR THE GOOD NEWS!!!
THE CASE FOR A NEW BOARD AND NEW FRONT ENTRANCES:
The 2006-2009 Easement Lawsuit, as the ORBS MATTER issue showed, will prevent the RHA from EVER upgrading the front entrances. The RHA failed Easement Lawsuit of 2006-2009 , caused the RHA to lose control of the front entrances and cost Royden members over $250,000.00.The vitriolic easement holder relationship is a legacy that Royden should be ashamed of and will forever prevent an upgrade to these corroding and outdated stucco walls!!!! See now why no special assessments are being FIXED, The Board is covering up the fact that they have lost control of the ability to make capital improvements on one section of the entrance…and thus on all entrances.
THE GOOD NEWS….With the proceeds, from the successful D&O CLAIM, that Counterpoint recommends, the NEW Royden BOARD, could ask each member to invest their $2,400.00 into Royden, pay back the easement holders and have over $150,000.00 left over…………………. for a NEW Remodeled Front Entrances.
A Re-Modeled Front Entrance that will make a new, upbeat branding statement, and support even higher basic home values, Royden properties and home-owners deserve no less/
We encourage all Royden members , to try to understand the covenants and past issues, take a stand on the COVER-UP and D&O Claim issue. Attend this years’ Annual meeting and raise some of the questions outlined herein. Only with individual member involvement will the COVER_UP end and the D&O Attorneys’ will be forced to stop running OUR HOA…… and stop the LIES their COVER_UP require and allow future Boards’ to consolidate the covenants and finally FOLLOW THEM!.Long Live Article IV!!!
BTW..What should the PRESIDENTS FIXING LETTER have said about the 2016-2017 Annual Assessment!…
A)Total Assets were over $36,660.00 on May 31, 2015…RHA took in $24,150.00 ($175.00X138) or a total available Cash of $60,810. 00 as of June 1, 2015.
B)The Maximum 2015-2016 Annual Budget, the Board could appropriately spend, without any approved Special Assessments, social spending and legal fees(Paid by D&O policy) was $28,980.00.
C)That means in budget terms…Cash Available-$60,810-Expenses-$28,980.00-Cash on Hand May 31, 2016 (Pro forma)= $31,830.00
This would mean that total assets, or fiscal reserve should be $31,830.00 by May 31, 2016.
D)With the Article IV, Equal To 10% contingency reserve provision, taking precedence over the By-Laws, no more than $15,000.00 provision, the 10% Contingency reserve is limited to$2,898.00,.
All Fiscal reserve excesses then results in a credit due each member. Some thing that had not happened in the last 10 years, when Fiscal reserves were routinely over $25,000 and as high as $45,000.00.
E) Drum roll….The Fiscal Reserve Excess credit as of May 1, 2016 is……($31,830.00-$2,898.00=$28,932.00 divided by 138) ……………….Equals……$210.00 Credit.(to each member as of May 1. 2016…
E) Again, with a Maximum Annual Assessment for 2016-2017 of $210.00 and a Fiscal Reserve Credit of $210.00……….., this years Annual Assessment should be…..
AGAIN…..DRUM ROLL!!!!!……$0.00…..Nada, zilch, squat…… AND Rinaldi wants his Sanction money of over $6,000.00 back!!!!
For More:Visit associationbusters.com for our blog Spotlighting Royden. Here you can respond to all the issues the Royden Cover-Up involves over the past ten years. Also Scott Norwood, of the Observer. has been requested to follow-up his “Tough Love among neighbors “piece in the April 16, 2016 Observers’ Home Design Section, with a “Tough Love among neighbors-Sanctions” piece. We’ll see if he will be interested in the Royden Story. Maximum pressure will be applied to force the NEW BOARD to finally follow NC LAW and the RHA CCRs’. Homeowners’ should expect nothing less!!!! No Justice…No Peace!