To: Residents of the Country Club of Arkansas Addition (formerly” Dogwood” Addition, PRD) August 18, 2013
Upon reading the Property Owners Association (POA) Articles of Incorporation last summer, we were quite concerned about the financial impact and the legality of multiple subdivisions being included in one large Association and the excessive powers provided to the Board.
After much study, our group of residents engaged Attorney Randal Frazier with the Kutak Rock law firm to do a detailed analysis of the current POA’s composition. Enclosed with this letter is a copy of his report. In summary, his findings are that:
• The POA as currently composed was formed in contradiction to the terms of the Amended Bill of Assurance (BOA);
• The current POA is an unenforceable expansion of authority; and,
• Therefore, the current POA has no authority over its members (that includes you!)
Attorney Frazier sent the enclosed letter to the President of the POA and the developers, demanding they “cease and desist.” Attorney Stephen Gershner who represents both the POA and developers responded that they did not want separate POAs for each subdivision and that we (residents) would have to file a lawsuit to force them to comply.
The current composition of the POA places the residents of “Dogwood” (composed of lots 1-855R) in a financially disadvantageous position.
• There are 806 lots in “Dogwood” but over 1,400 lots in the entire County Club of Arkansas.
• At the current $50 annual assessment, 806 “Dogwood” residents contribute $40,300 to the POA which is 58% of its total revenue at full assessment and collection. Most of this goes toward paying for the other eight (8) subdivisions maintenance and liability issues which include private roads, drainage ponds, sidewalks, concrete alleys and large grassy open spaces. Required maintenance and liability costs for “Dogwood” are minimal.
• There is no guarantee that the POA annual assessment of residents will stay at $50. It is subject to increases as additional costs are incurred in these developments and any future developments.
So what are our options? (The following are excerpts from our attorney’s written opinions.)
1. Amend the Bill of Assurance (BOA). This would remove us (the Dogwood addition) from the current POA. The BOA clearly states it can be amended by the owners of 50 percent of the lots subject to the BOA. The amendment would remove the POA requirement of Article IV as well as dealing with other references to the POA, the Architectural Control Committee and other necessary cleanup matters throughout the document. The result would be no more POA of any kind for our subdivision; no more dues; and individual control of our property.
2. File a lawsuit against the developers and the current POA forcing it to split the POA into separate POA’s. Although the issues addressed in the attorney’s enclosed letter are well-founded in both law and fact, there is nothing concrete in litigation. Successful recovery would most likely be limited to recovery of dues paid, no future assessments and voiding of the improper joinder of subdivisions. The lawsuit cost estimate is $10,000—$40,000.
We need your vote and your e-mail address as soon as possible. Our group recommends choosing Option 1 Amending the Bill of Assurance.
This is time-sensitive. Please select one of the above options by responding to: firstname.lastname@example.org and/or by sending us the stamped, addressed, enclosed postcard with your vote and contact information. Thanks for your attention to this very important matter..
Edward J. Petri, M.D.
Dogwood Residents Alliance