HOA Board of Directors, what can they approve without member vote? (insurance, how much)

[NC coast]

Are there any NC laws that specify what the HOA board of directors can approve on their own? Specifically, how much they can spend of the annual budget without notification or consent by the community members? Is there a specific section in our by-laws where I should look for info on this?

[CarolinaAppraiser]

Originally Posted by NC coast

Specifically, how much they can spend of the annual budget without notification or consent by the community members?

The yearly budget is typically discussed, voted on and approved by majority vote at the annual meeting of the members of the HOA. Once the budget is approved it is the responsibility of the board to disperse funds (all of them) for the maintenance of the common areas until the following year when the whole process starts all over again. I've never heard of a notification requirement to the HOA members once the budget has been approved. That's the whole purpose of discussing the budget at the annual meeting.

[suedonym]

Originally Posted by NC coast

Are there any NC laws that specify what the HOA board of directors can approve on their own? Specifically, how much they can spend of the annual budget without notification or consent by the community members? Is there a specific section in our by-laws where I should look for info on this?

*disclaimer- I am adamantly opposed to HOA's, which is no secret LOL*

now that thats said (LOL) what are they doing that is making you question their actions? There must be something?

[CarolinaAppraiser]

The good thing about not liking HOA's is that you can choose not to live in one. I hate minivans so I don't drive one. HOA's will certainly be unpopular among people who don't like the idea of having a neighborhood governing body but I think a lot of people misunderstand the function of HOA's. I live in one and absolutely love it. I have the benefit of having someone else maintain the exterior of my home and cut my grass during the summer and I have use of a fitness center, pool, tennis courts and a clubhouse while paying a small fraction of their upkeep because those expenses are shared among everyone in my community. I could never afford such amenities by myself. We also have the benefit of "collective bargaining" so to speak with respect to insurance rates because we buy it in bulk and get it cheaper. Our trash service is the same way. But not everyone likes living in a planned unit development.

I too am curious to hear what problems the original poster is having.

[NC coast]

We live in a fairly new Planned Community.
The expense I'm questioning is a new improvement in the community. A large addition in one of our common areas.
The annual budget was presented and approved, including a cost indicated for a proposed new improvement, which was approximately half of what the actual cost has turned out to be. And that is for construction alone, when factoring in the maintenance, insurance, etc., I'm sure the final cost will be more than doubled what was presented to the community members.
The BOD did not disclose or get approval from the community for the final decision of the improvement, which included where, what and total costs.
The BOD (which represents approx. 5% of the total members) made all these decisions in closed door meetings and have already contracted for the new improvement to begin.

[CarolinaAppraiser]

Originally Posted by NC coast

We live in a fairly new Planned Community.
The expense I'm questioning is a new improvement in the community. A large addition in one of our common areas.
The annual budget was presented and approved, including a cost indicated for a proposed new improvement, which was approximately half of what the actual cost has turned out to be. And that is for construction alone, when factoring in the maintenance, insurance, etc., I'm sure the final cost will be more than doubled what was presented to the community members.
The BOD did not disclose or get approval from the community for the final decision of the improvement, which included where, what and total costs.
The BOD (which represents approx. 5% of the total members) made all these decisions in closed door meetings and have already contracted for the new improvement to begin.

I'm surprised that a new community improvement got approval at all. It is very unusual for construction of new improvements to take place in an established neighborhood. Is this an addition to a clubhouse or installation of something new like a pool?

The board and/or the property manager should have gotten bids for the construction work prior to presenting the proposed project for member approval. You might look into that and inquire as to why costs have run so far over budget. There may be some recourse with the people doing the construction work if a contract was signed and they agreed to complete the work for a set fee. I'm still amazed that the majority of the owners decided to approve new improvements. That is certainly not typical.

[NC coast]

Well, in reading through the covenants and by-laws, it appears the budget just has to be presented within a specified period of time, but there is no mention of it having to be approved by the community members.
We are a coastal community and the improvement is a new pier/boat docking area (in addition to the one already in place built by the developer),
When the budget was presented, it did not specify what the improvement would be, just an estimated amount for *improvements*. So no bids or proposed project specifics were disclosed, because they were not known at that time.
From what I can gather from our HOA docs, the board did not do anything in violation (unless there are state laws that would supersede the HOA docs?).
I just feel it's completely unethical to make such big decisions without input from the community. I would be willing to bet that the majority of homeowners would vote against the new improvement, especially considering that the HOA dues could have been cut instead.
And now that some of us are showing resistance, the board is in defense mode and quite clearly on a power trip. It's a shame.

[suedonym]

Originally Posted by NC coast

Well, in reading through the covenants and by-laws, it appears the budget just has to be presented within a specified period of time, but there is no mention of it having to be approved by the community members.
We are a coastal community and the improvement is a new pier/boat docking area (in addition to the one already in place built by the developer),
When the budget was presented, it did not specify what the improvement would be, just an estimated amount for *improvements*. So no bids or proposed project specifics were disclosed, because they were not known at that time.
From what I can gather from our HOA docs, the board did not do anything in violation (unless there are state laws that would supersede the HOA docs?).
I just feel it's completely unethical to make such big decisions without input from the community. I would be willing to bet that the majority of homeowners would vote against the new improvement, especially considering that the HOA dues could have been cut instead.
And now that some of us are showing resistance, the board is in defense mode and quite clearly on a power trip. It's a shame.

elect new members when its time.

[NC coast]

What a novel idea. Thanks...

[CarolinaAppraiser]

The budget usually needs to be approved under a quorum. My HOA requires that 42% of the members must be present or send in a proxy vote to establish a quorum at our annual meeting and only then can our budget be altered from the previous year and ratified. I think most HOA's actually require 51% participation to establish a quorum. I assume that if your HOA required a quorum that it would be pretty clear in the docs but I'm getting outside of my area of expertise. I guess you could ask to see a copy of the minutes from the last meeting and see if a quorum was established and go from there. That's about the only thing I can think of. Did they give any explanation as to why they are installing a dock/pier when one already exists?