Bogus Builder Agreements
There appears to be connivance between the Country Club and the POA, to the detriment of the Mandatory Members. When Delaire became a Mandatory Membership club in February, 2000, the amendment called for ALL property owners to maintain their REQUIRED membership in good standing. The Covenants & Restrictions, to which each owner is subject, state the following:
R. Membership in Del-Aire Country Club, Inc. (“Club”).
1. A person or a corporation, partnership, trust or other entity obtaining title to or a Lot or Parcel is required, as a use restriction incident to ownership in Delaire Country Club, to become a member of the Club and is further required to maintain said membership in good standing at all times during the period of such ownership. Read the original Amended Declaration, recorded on February 25, 2000.
The plain truth is that builders do not pay full dues. They don’t pay dues at all. This means that the seller benefits by limiting the payments they are obligated to make via a sale of the property to a builder that pays only about 25% of what a resident member should pay. These are labeled as builder fees. This effectively means that right now, with about 20 builder homes, EACH of the 300 or so “true” resident members are subsidizing the builders and the sellers to the tune of about $1600 per year. This works out to about $500,000 a year. Further, when a property changes hands, an officer of the POA is required to sign a Certificate of Compliance stating that all the requirements of Item R. (above) have been met. They have routinely signed these Certificates, in full knowledge they are non-compliant with the Covenants & Restrictions. It's bad enough that we have to subsidize the
non-resident members. Now we find out we have been subsidizing builders and sellers by multi-millions.
The Governing Documents of the POA do not mention the word “builder”. The Country Club cannot set up some deal which infringes on the rights of the property owners or diminishes the monetary contribution due from each owner. Our right and expectation, granted by the Covenants and Restrictions, is that a membership in good standing is required during their entire period of ownership. These builder agreements must cease immediately. They have not been approved by an amendment to the Covenants & Restrictons of the POA and that is necessary if this program is to continue. Why has the POA allowed this to happen? Who has benefitted from this program? Some Delaire residents in the construction & design business have taken advantage of these agreements for years. Some other residents have been partners in these transactions. Who are these individuals and do any of these transactions represent a conflict of interest?
On behalf of the property owners, it is the fiduciary duty of the POA to insist that these agreements immediately stop. They should refuse to sign any further Certificates of Compliance unless it has been determined that full Resident Member dues and assessments have been paid by an owner. This may mean that sellers will now have to lower their prices to a point where it becomes attractive to a buyer. They will have to negotiate a deal with the knowledge that one of them is responsible for full dues & assessments. This may mean lower prices for sellers or less builder activity. Let the market forces dictate the price, not the subsidies of duped resident members.
The bottom line is that the POA Covenants & Restrictions demand that all property owners must be members in good standing during their entire period of ownership. The ONLY thing that can change that would be an amendment to the declaration, which requires approval by 60% of the owners.
The Covenants state the following:
A. Duration and Remedies for Violation.
The Covenants and Restrictions of this Declaration shall run with and bind the property, and shall inure to the benefit of and be enforceable by the Association or any owner subject to this Declaration,……
The POA should move to immediately enforce the Covenants & Restrictions. Failure to do so will likely result in one or more disgruntled property owners moving forward with this enforcement action. The costs of such action will then be sought from all the owners in the POA. Does Delaire really need another never ending lawsuit? Can’t the money be put to better use?