HOA Change of HOA Declaration and Insurance Coverage – 2025
January 9, 2025
Explanation of Proposed Changes to Declaration, Article V, Sections 2 and 3
We are proposing updates to Article V, Sections 2 and 3 of the Declaration to enhance clarity and provide greater flexibility in the management of our Association’s finances. These changes aim to ensure the Association operates efficiently while remaining transparent and responsive to our community’s needs.
1. Expanding the Purpose of Assessments
Previously, Section 2 limited the use of assessments to maintenance and repairs, creating potential confusion about whether administrative, legal, and other essential costs were permissible expenses. The updated language explicitly includes insurance, administrative, legal, audit, and accounting costs. These updates reflect the full range of services required to fulfil the HOA obligations as outlined in the Declaration.
2. Flexible Determination of Annual Assessments
Section 3 has been updated to allow the Board to determine annual assessment amounts at a time that aligns with the Association’s financial planning and project execution. Previously, assessments had to be set at the beginning of the year, which could lead to outdated projections and financial strain if unanticipated expenses arose. Under the proposed change, the Board can make adjustments once a year (without make a specific reference to which months can be used for this purpose). This flexibility enables us to lower the HOA fees later in the year, if the Boar for the change of the bylaws passes.
The draft maintains the previous requirement for homeowners’ approval for any HOA increases beyond 5% per year. This is how the Board operates now and this was left unchanged.
These changes are designed to promote financial flexibility, and empower the Board to manage assessments in a way that aligns with the evolving needs of our community. We believe these updates will make the Association more agile in meeting its commitments while safeguarding homeowner interests.
We appreciate your support as we work together to enhance the well-being of our neighborhood. Please feel free to reach out with any questions or concerns about these updates.
Explanation of Proposed Changes to Article VIII: Insurance
Dear Homeowners,
We are proposing significant updates to Article VIII of the Declaration to address the challenges we have faced in securing and maintaining commercial insurance for the HOA. Over time, the requirements and costs for obtaining building coverage have become increasingly difficult to manage, leaving us with limited options and insufficient protection for our community.
After careful consideration, the Board believes homeowners would be better served by holding their own insurance policies, which would provide more reliable and personalized coverage. Under the proposed changes, the HOA will focus on insuring common areas, such as landscaping, the clubhouse, and other shared spaces. Homeowners will be responsible for insuring their individual properties, including townhomes and improvements, as well as securing liability coverage for their lots. This shift ensures that insurance proceeds are paid directly to homeowners in the event of a loss, streamlining the claims process and granting homeowners full control over their coverage and repairs.
1. Transitioning Insurance Responsibilities to Homeowners
The updated Declaration specifies that homeowners will now be responsible for obtaining property insurance for their individual homes (including townhomes and improvements), personal property, and liability coverage. Article VIII, Section 8.01(a)(ii) encourages homeowners to secure comprehensive policies to protect their properties, while Section 8.05 clarifies that the HOA will no longer maintain property or liability insurance for individual homes. This shift ensures that insurance proceeds in the event of damage are paid directly to homeowners, giving them complete control over repairs and claims management. This shift ensures that insurance proceeds are paid directly to homeowners in the event of a loss, streamlining the claims process and granting homeowners full control over their coverage and repairs.
2. HOA Insurance Focus (Article VIII, Section 8.01(a)(i))
Under the proposed changes, the HOA will continue to maintain insurance coverage for common areas, including landscaping, recreational facilities, and other shared spaces. Article VIII, Section 8.01(a)(i) explicitly outlines the HOA’s responsibility to secure property and liability insurance for these areas. This allows the HOA to focus its resources on community-wide needs while reducing administrative and financial burdens that slowed down its ability to focus on long-term projects.
3. Changes to Maintenance Responsibilities (Article VIII, Section 8.04)
With insurance responsibilities transitioning to homeowners, maintenance obligations will also shift. Article VIII, Section 8.04 requires homeowners to promptly repair or replace damaged improvements or landscaping on their lots following a casualty event. If a homeowner fails to restore their property within the specified timeline, the HOA may step in to remove debris or address safety concerns, with associated costs assessed to the homeowner. This ensures the community maintains a safe and aesthetically pleasing environment.
4. Indemnity and Liability (Article VIII, Section 8.05)
Section 8.05 further protects the HOA by stipulating that neither the Association nor its Board members will be held responsible for damages to individual properties. Homeowners are explicitly required to indemnify the Association from claims related to their properties, ensuring the HOA’s financial and legal stability.
These updates are designed to provide clear guidelines on insurance and maintenance responsibilities, promote financial efficiency, and empower homeowners to manage their own property protections. We encourage all homeowners to review the proposed changes carefully and share any questions or feedback before the upcoming vote.
Explanation of Proposed Changes to Article IX, Section 1: Obligation to Reconstruct or Repair
Dear Homeowners,
In conjunction with the proposed updates to Article VIII: Insurance, we are also recommending changes to Article IX, Section 1, which governs the obligations to reconstruct or repair residential structures and common areas after a casualty event, such as a fire or natural disaster. These changes aim to align responsibilities for repairs with the updated insurance provisions while providing clear, equitable guidelines for the community.
1. Homeowner Responsibility for Repairs (Article IX, Section 1, Paragraph 1)
The updated language explicitly states that if a residential structure or its associated improvements on an individual lot are damaged or destroyed, the homeowner is solely responsible for the repair or reconstruction. This aligns with the changes in Article VIII that shift property insurance responsibilities to homeowners, ensuring they have direct control over the repair process using their own insurance proceeds. By clarifying this responsibility for both the homeowners and, most importantly, for their insurance companies, we eliminate ambiguity and ensure that homeowners are equipped to address damage promptly and effectively.
2. Community-wide Damage Provisions (Article IX, Section 1, Paragraph 2)
To address scenarios involving significant, community-wide destruction, the proposed update includes provisions requiring the collective decision of homeowners. If more than two-thirds (2/3) of the residential structures in the community are damaged or destroyed, reconstruction or repair will only proceed with the affirmative vote of 67% of all homeowners. This ensures that large-scale recovery efforts reflect the collective will and financial considerations of the community.
3. HOA Responsibility for Common Areas (Article IX, Section 1, Paragraph 3)
In cases where recreational or common area facilities are damaged, the HOA retains responsibility for repair or reconstruction. However, if such a casualty event also impacts more than two-thirds (2/3) of residential structures, repairs to common areas will require unanimous consent from all homeowners. This provision acknowledges the extraordinary circumstances such a disaster would present and ensures that resources and decisions reflect the community’s priorities and capacities.
These updates ensure consistency with the revised insurance provisions in Article VIII, providing clarity on responsibilities and procedures after a casualty event. By balancing individual homeowner responsibilities with collective decision-making in large-scale situations, these changes aim to protect the financial stability of the community and align expectations for recovery efforts.
We encourage you to review this article along with the proposed insurance changes in Article VIII to fully understand how these updates work together to strengthen our community. Please share your questions or comments as we move toward the upcoming vote.
Explanation of Proposed Changes to Article IX, Sections 3 and 4: Homeowner Responsibilities and Reconstruction Procedures
As part of the comprehensive updates to the Declaration, we are refining Article IX, Sections 3 and 4 to clarify homeowner responsibilities for the reconstruction and repair of their properties while addressing the community’s concerns about existing maintenance and repair requests. These updates aim to ensure a smooth transition as we implement the new framework for insurance and property maintenance, should the proposed changes be approved.
1. Clarifying Homeowner Responsibilities (Article IX, Section 3)
The updated language in Section 3 explicitly establishes that each homeowner will be responsible for the reconstruction, repair, and replacement of both the interior and exterior of their main residential structures. This includes components such as the roof, walls, slab, plumbing, electrical systems, and appliances. These changes align with the proposed updates to Article VIII by giving homeowners full control over their insurance claims and repairs while maintaining the Association’s ability to supervise and coordinate reconstruction efforts to ensure compliance with community standards.
Additionally, the new section specifies that homeowners must bear the costs for any repairs necessitated by their negligence or misuse. For damages covered by their insurance, homeowners are required to begin reconstruction or repair as soon as practicable upon receipt of the insurance proceeds. For uninsured damages, the responsibility for prompt repair still rests with the homeowner. This provision ensures timely action, reducing the risk of prolonged disrepair that could affect the community’s appearance or safety.
3. Reconstruction Procedures for Common and Private Properties (Article IX, Section 4)
In Section 4, the procedure for reconstruction or repair following a casualty event is further detailed. For common or recreational areas, the HOA will secure reliable cost estimates and apply insurance proceeds toward restoration. For damage to individual lots, homeowners are responsible for obtaining cost estimates and using their insurance proceeds to complete repairs. This clear division of responsibility ensures that both the HOA and homeowners can efficiently address damage in their respective areas of responsibility.
Explanation of Proposed Article XI: Maintenance and Repair Obligations
As part of the updates to our Declaration, we are introducing Article XI: Maintenance and Repair Obligations to clearly define responsibilities for maintenance, repairs, and replacements. These updates aim to create a more transparent and streamlined system, ensuring both the HOA and homeowners understand their respective obligations. To address homeowner concerns about long-term repairs, we have included a transition period to manage maintenance requests under the current rules before the new framework takes effect.
1. Defining Maintenance Responsibilities (Sections 1–8)
The proposed Article XI clearly delineates maintenance responsibilities between the Association and individual homeowners:
- Association Maintenance (Section 1): The Association will maintain and repair only the Common Areas, including landscaping and recreational facilities, as outlined in the Declaration and the accompanying Maintenance Responsibility Chart. The HOA will no longer be responsible for repairs to Townhomes.
- Homeowner Responsibilities (Section 2): Homeowners will assume full responsibility for maintaining, repairing, and replacing their Townhomes, including roofs, walls, foundations, patios, balconies, and interior systems such as plumbing and electrical. Additionally, homeowners must maintain their properties in a neat and clean condition and avoid actions that could compromise the safety or structural integrity of neighboring units or Common Areas.
- Specific Provisions for Common Elements (Sections 3–7): The article addresses shared walls and roofs, mold prevention, balconies, and default situations where homeowners fail to meet their obligations. In such cases, the Association may intervene, completing necessary repairs at the homeowner’s expense.
- Disputes and Maintenance Responsibility Chart (Sections 7–8): Disputes regarding maintenance responsibility will default to homeowners unless explicitly stated otherwise in the Declaration or the Maintenance Responsibility Chart (Exhibit A), which will serve as the definitive reference for determining responsibilities.
2. Transition Period (Section 9)
To address ongoing concerns about repairs and maintenance under the current rules, Section 9 introduces a transition period that extends until April 30, 2025:
- During this period, homeowners may submit repair requests to the Association for issues they believe fall under the current Declaration. Requests must be submitted no later than April 30, 2025.
- Any maintenance or repair responsibilities that accrue before May 1, 2025 will be addressed under the existing rules and will not be governed by the new Article XI. Starting May 1, 2025, Article XI and the Maintenance Responsibility Chart will take full effect, and all future maintenance requests will adhere to the updated framework.
This transition period ensures that no homeowner is disadvantaged during the changeover and provides time for unresolved maintenance concerns to be addressed appropriately.
Explanation of Proposed Article XII: Sale of Common Area
As part of the updates to the Declaration, we are proposing the addition of Article XII: Sale of Common Area. This new section is designed to clarify the process and requirements for selling HOA-owned common facilities, such as the clubhouse or pool, if a future need or desire arises. While there are currently no plans for any such sale, the addition of this article ensures transparency and provides a structured framework should the community decide to pursue this option.
1. Authority and Approval Process (Article XII, Section 1)
The new language grants the Board the authority to negotiate contracts for the sale of any common area, but final approval would require the affirmative vote of 67% of all Association members. This high threshold ensures that any decision to sell common areas reflects the clear consensus of the community. By outlining this process, the Board can be responsive to homeowner interests while maintaining transparency and accountability.
2. Allocation of Sale Proceeds (Article XII, Section 2)
Should a sale occur, all proceeds would be held in a separate account, in trust and allocated as follows:
- First, proceeds would cover any expenses incurred by the Association in completing the sale, such as legal, administrative, or transaction costs.
- Second, the remaining funds would be distributed equally among all lot owners, ensuring that each homeowner benefits directly from the sale.
This distribution method ensures fairness and guarantees that all homeowners share in the financial benefits of any sale.
3. Why This Addition Matters
The addition of Article XII provides the flexibility to address future homeowner interests in common area sales while ensuring a clear, democratic process. It protects the community’s interests by requiring a significant majority vote and guarantees that proceeds are used responsibly and distributed equitably.
While no current plans exist for selling any common areas, the inclusion of this article demonstrates the Board’s commitment to proactive governance and its responsiveness to homeowner feedback. This framework ensures that any future considerations for such a sale will be handled transparently and with the full involvement of the community.
Explanation of Proposed Article XIII: Architectural Review Authority
In response to feedback about the need for consistency in exterior repairs and replacements, the Board is proposing the creation of an Architectural Review Authority (ARA) under Article XIII of the Declaration. This new committee will provide guidance on design standards to ensure the long-term preservation of our community’s appearance, value, and structural integrity. The ARA will oversee elements such as roof shingles, siding materials, and other common surfaces, leaving room for additional items to be standardized over time as needed.
1. Purpose of the ARA (Section 1)
The purpose of the ARA is to maintain a cohesive architectural look within Woodhaven Townhomes. By regulating certain aspects of the design, use, and appearance of Townhomes, the ARA will help preserve property values and architectural harmony, ensuring that individual homeowner repairs or updates do not detract from the overall aesthetic of the community.
2. Composition and Role of the ARA (Sections 2 and 5)
The ARA will consist of at least three members, including both Board and non-Board members, appointed by the Board. This committee will review homeowners’ architectural requests and make recommendations to the Board for final approval. While the ARA will provide expertise and input, the Board retains the authority to accept, modify, or reject the ARA’s recommendations. This ensures all decisions align with the community’s best interests.
3. Standardization of Common Surfaces (Sections 4 and 6)
The ARA and the Board will publish and enforce Architectural Guidelines that specify acceptable colors, materials, and standards for exterior elements such as roofs and siding. Homeowners will be required to adhere to these standards when making repairs or improvements to these areas. Over time, the Board may expand the list of regulated exterior components to include additional common surfaces that impact the community’s safety, security, or design integrity. These guidelines will be developed and revised as needed to reflect changes in technology, materials, and style.
4. Homeowner Autonomy and Liability Protections (Sections 7, 8, and 10)
To respect homeowners’ autonomy, no approval is required for interior remodeling, repainting, or rebuilding in accordance with previously approved plans. Additionally, neither the ARA nor the Board assumes liability for mistakes, defects, or issues related to approved plans, ensuring the committee and Board can focus on architectural oversight without undue risk.
5. Why This Addition Matters
The establishment of the ARA addresses a significant concern among homeowners about the need for consistent and reliable standards for exterior materials, such as roofing and siding. This ensures that repairs and replacements maintain the visual and structural quality of the community while allowing homeowners to proceed with clarity about acceptable options. By involving both Board and non-Board members, the ARA provides a balanced approach to architectural oversight, ensuring decisions are made fairly and transparently.
