Dear Fellow SH Homeowners,

As most of you are aware, there has been a lot of concern regarding the Lien on our properties.  The lack of communication from our BOD and Management Company leaves us all in the dark.  Tom and I share all your concerns and believe there is something more serious going on that we don’t know about.  Tom and a couple other homeowners have been independently contacting 3 of the attorneys involved.  We have been gathering the information and learning there is something much bigger than the lien and the $101,975 due to Structural Waterproofing.    

We just recently acquired a document sent from Lynn Edmonds of  Litus* To Let to a realtor/closing law office that has some very disturbing information regarding a special assessment on the units of South Hampton that will begin in January 2021.  The document is attached for your review.

This document is titled “South Hampton Property Owners Association, Inc. Certificate of Assessment.

It states the regular assessment of $717.00 will be raised to $721.00 (2 bedroom) and $865 (3 bedroom). This monthly fee increase is pretty minor and is not the concern.  What is concerning is what comes next:

Special Assessment – 2 options, beginning 2021
Payment in full due $11,543.38
Monthly payments (60) due $192.39

 This is obviously for a 2-bedroom unit in the closing process and we’re sure the 3-bedroom units will have a proportional increase.

It goes on to say; “Special assessment approved by BOD in late November to replenish funds for piping project and waterproofing.  Assessment due beginning in January 2021”.

We are making the assumption that 3-bedroom units will be assessed at ~20% higher than the 2-bedroom units (based on our regular assessments are 19.9% higher for the 3 bedroom units)

Here are the costs of this assessment based on our calculations:

$11,543 for 72 2-bedroom units = $831,096
$13,851 for 72 3-bedroom units = $997,272
Total assessment = $1,828,368

We were miffed at learning Don hired an attorney to represent the homeowners without informing us of such.  Since each homeowner is named individually, each owner must agree to having this attorney represent them.  And by the way, he is not free.

At the May 2019 Annual Homeowners Meeting Don stated we had enough money to pay for the piping project and the building project with a modest ($500k – $600k) shortfall that would be covered with a short-term bridge loan.  He also said the bridge loan would be paid out of our regular assessment funds (monthly HOA fees) in less than a year.  Both Don and Dave Puckett assured us there would not be an assessment. 

This tells us the $101,975 due to Structural Waterproofing and the liens on our properties pales in comparison to something much bigger.

As for the special assessment, there are very clear requirements set forth in our Master Deed.  Below are sections 4.7 and 4.8 of our Master Deed.  The Board can only approve a special assessment not to exceed 10% of the prior year budget.  In this case the board can only approve ~$140,000.  The attached document states the assessment was approved by BOD in late November”.  To place a special assessment in the amount of ~$1.8M, there must be a vote by the homeowners and it needs 51% homeowner’s approval.  This document seems to be in violation of our Master Deed, not to mention ethicality of how this is all being handled.

4.7 Special Assessments. In addition to the HOA regular assessments authorized by this Article, the HOA may levy, at any time and from time to time, upon affirmative vote of a majority of the Board of Directors of the HOA, a special assessment in an amount up to ten (10) percent of the prior years budget, payable over such period as the HOA may determine, for the purpose of defraying, in whole or in part, the costs of any construction or reconstruction, unexpected repair or replacement of the Project or any part thereof, or for any other expenses incurred or to be incurred as provided in this Master Deed (including without limitation HOA expenses). Such special assessments, if any, shall be included within any and all references to HOA Assessments. This Section shall not be construed as an independent source of authority for the HOA to incur expenses but shall be construed to prescribe the manner of assessing for expenses authorized by other sections or Articles hereof. Any amounts assessed pursuant hereto shall be assessed to Co-Owners in proportion to their respective Percentage Interests. Notice in writing of the amount of such special assessments and the time for payment thereof shall be given promptly to the Co-Owners; no payment shall be due less than fifteen (15) days after such notice shall have been given. All unpaid portions of any special assessment shall incur a late charge of $25.00 per month or any portion of any month (or at such lesser rate equal to the maximum interest rate allowed by the applicable law) from the date such portions become due until paid. All funds received from assessments under this Section shall be part of HOA funds.

4.8 Additional Special Assessments. In addition to the HOA regular assessments authorized by this Article, the HOA may levy, at any time and from time to time, upon affirmative vote of at least fifty-one (51%) of the total votes of the HOA, special assessments, payable over such period as the HOA may determine, for the purpose of defraying, in whole or in part, the costs of any construction or reconstruction, unexpected repair or replacement of the Project or any part thereof, or for any other expenses incurred or to be incurred as provided in this Master Deed (including without limitation HOA expenses). Such special assessments, if any, shall be included within any and all references to HOA Assessments. This Section shall not be construed as an independent source of authority for the HOA to incur expenses but shall be construed to prescribe the manner of assessing for expenses authorized by other sections or Articles hereof. Any amounts assessed pursuant hereto shall be assessed to Co-Owners in proportion to their respective Percentage Interests. Notice in writing of the amount of such special assessments and the time for payment thereof shall be given promptly to the Co-Owners; no payment shall be due less than fifteen (15) days after such notice shall have been given. All unpaid portions of any special assessment shall incur a late charge of $25.00 per month or* any portion of any month (or at such lesser rate equal to the maximum interest rate allowed by the applicable law) from the date such portions become due until paid. All funds received from assessments under this Section shall be part of HOA funds.

All this tells us why there has been very little and inaccurate information shared with us homeowners. Our confidence, respect and trust with Don and our Management Company has been shaken. 

Tom has reached out to Don in hopes to bring clarity and an appropriate level of transparency to the apparent difficult situation we are now in. 

Feel free to forward this to any homeowners.

Best Regards,
Lynn and Tom Leonti #1109