Membership Primer

Introduction

 

Owning a home in a Common Interest Community like Stonehedge Townhomes is different than regular home ownership.  As the owner of a Stonehedge townhome, you are also a part owner of real estate that is owned in common with others.  Homeowners in a Common Interest Community give up some individual control in return for the advantages of a shared community: use of common areas, shared maintenance and operating costs, and consistent appearance, quality, and standards in the neighborhood.

 

This primer is intended to provide an overview of the structure and organization of our townhome community.  Sometimes it can be confusing when people refer to “the HOA” or “the Association.”  Let us begin with some definitions:


When we use the terms “HOA” or “Association” in this primer we mean the Stonehedge Townhomes Fourth Homeowner’s Association, Inc.

 

The Stonehedge Townhomes Fourth community includes several different types of property.  It is important to understand the distinctions among them:


Governing Structure

 

In Minnesota, the legal framework for a Common Interest Community is governed by several documents, and there is a priority to them: nothing in a lower document can override something in a document higher in the list.  In order, the governing documents of our community are:

Minnesota Statutes Chapter 515B – governs Common Interest Communities

Minnesota Statutes Chapter 317A – governs Not for Profit Corporations

 

Management of our Community

 

Our community is operated and administered by the Association, which is entirely run by volunteers.  We have not hired a property manager and do not maintain a regular office.

 

The Declaration requires the Association to manage and operate the property for these specific purposes:


The Declaration gives the Board of Directors the legal authority and the responsibility to take actions it believes are necessary to carry out these purposes.

 

Membership and Voting Rights of Members


When you purchase a Stonehedge townhome you become a “Member” of the Association.  Each Member has one vote but, if you own your townhome jointly your Unit can cast only one vote.  Members can vote to:


Members cannot vote to change officers, budgets and fees, Rules and Regulations or other Board decisions, expenditures or vendors, or architectural change requests.

 

Communication and Membership Meetings

 

We are working on improving communications to Members.  This website provides access to the Rules and Regulations, as well as other governing documents.  A group email list has been created for communication to Members.  For efficiency and in order to reduce costs we generally rely on email communications, although certain items are required to be sent to the Members via U.S. Mail.

 

A meeting of the membership is required at least once per year, although we may meet more often.  An annual report is provided to the Members each year at the annual meeting.

 

Board of Directors and Management Group


Our Board of Directors consists of three individuals, elected by the Members.  The Board is required to meet at least quarterly, although our Board tends to meet monthly.  At its meetings Board members review the Association’s bank statements and other business of the Association.  Board meetings have generally been informal and minutes have not been kept.


The Management Group consists of the Board of Directors and the Committee Chairs.  It meets monthly to review and discuss operations, finances, and other matters that have come to the attention of the Management Group. 

 

Finances


Financial assessments paid by the Members are the Association’s one and only source of revenue to pay for all of its expenses.  The amount of the assessments is set by the Board of Directors and can include both Annual Assessments and Special Assessments.  Annual Assessments are used to pay for the regular operating expenses of the Association and to set aside a reserve fund for future repairs and replacements.  Special Assessments are typically used to pay for unusual or one-time items such as repairs or capital improvements.

 

The Board may increase the Annual Assessment each year.  Special Assessments must be approved by a majority vote of the Membership.  In addition to Annual Assessments, the Board may assess fines for violations of the Rules and Regulations.

 

The Association requires Members to pay Assessments in monthly installments via a pre-authorized electronic bank transfer.  This helps ensure adequate cash flow for the Association.  Assessments and fines must be paid promptly.  These obligations are liens on the Unit and, ultimately, non-payment of assessments or fines could result in foreclosure.

 

The Board develops an annual budget, including operational and replacement funds, hires services and vendors, purchases parts and supplies, and pays invoices.  The Board is responsible for management of vendors and contractors.  All communications with vendors or contracts must be from a member of the Board of Directors.

 

Insurance


The Association provides a property insurance policy covering the common areas and the exterior of each townhome.  Members are advised to purchase their own insurance policy to cover losses to their own property.  Under the Association’s insurance policy, homeowners may be responsible for a deductible amount and/or damage claims that exceed the Association's policy limits.  Members are encouraged to include “Loss Assessment Coverage” in their own insurance policy to help cover these potential obligations.  All claims on the master insurance policy must be filed by a member of the Board of Directors.


Repairs & Replacements


The Association is required to repair or replace Common Elements as needed.  In addition, the Association may choose to repair or replace Limited Common Elements, or portions of a Unit.  The “Property Maintenance and Replacement Responsibilities” schedule provides details about which items are provided by the Association and those that are the responsibility of the homeowner.  If Special Assessments are necessary, a majority vote of the membership is required.


Rules and Regulations


One of the advantages to living in a Common Interest Community like ours is the ability to maintain standards and a consistent appearance for the community which contributes not only to having a pleasant place to live, but just as importantly, preserves property values.  The Rules and Regulations provide standards in order to maintain a safe and attractive neighborhood for all of us.  The Declaration (5.6), grants the Board of Directors the authority to amend these Rules and Regulations with reasonable notice to the owners.  Neither individual Owners nor the developer can amend or make exceptions to the Rules and Regulations.  Although we rely on self-enforcement of the rules, the Board of Directors has the authority to assess fines for violations.  


Changes to Property


You must obtain prior written approval from the Association before making any changes – whether temporary or permanent, structural, or aesthetic – to any property, to the exterior of any Unit, or in any part of a Unit which is visible from outside.  Changes requiring prior authorization include but are not limited to: addition of a storm door, landscaping for decoration or for creating a privacy area, additional patio or stone, planting of shrubs or trees.  A Change Request From is available on the web site.