Documents

Below is a list of documents. We will also publish board meeting minutes here in the future.

8-30-2022 Board Minutes

12/3/2022 Board Minutes
3/3/2023 Executive Board Minutes

6/5/2023 Board minutes on changing Management Companies

7/31/2023 Introductory Meeting with Clark Simson Miller our new Financial Mgt Company

9/5/2023 Youtube Board meeting

9/15/2023 youtube Meeting with CSM going over how to use online financial tools
9/25/2023 youtube Meeing with Lawyer over how best to implement changes to CCRs.

12/04/2023 Youtube board meeting

3/5/2024 Youtube board meeting

Financial Annual General Ledgers Under Cedar Management 2017 to 2023

12/5/2023 Youtube board meeting going over these Agenda Items

Our current CC&R's were created in 1995 and some people have expressed wanting to update them.

Changing the CC&R's is a lengthy process that typically takes 1-2 years for a community of our size. It requires getting 2/3 of members to vote on changes and then a lawyer is typically hired before and after to change and submit the changes.

One change the board has recently discussed is adding either a rental cap of about 25-30% of the 154 homes or adding a rental delay of 2 years before homes can be rented out after they are bought.

https://www.washingtonpost.com/business/2022/03/31/charlotte-rental-homes-landlords/ This article discusses the issue in more detail. The board would love to have a volunteer spear head this update or hear about other updates the community wants.

Annual revenue reports from 2018-2021. this document shows how much money was taken in and how it was spent each year. The HOA is required to disclose this information. However, in the past only the anticipated budget has been disclosed. Actual spending is what these documents show.

The $10K in 2020 was from the city of Charlotte Neighborhood Grant which went towards the $37,951 for the new playground installation. The $4997.85 in 2021 (we think) was for playground mulch delivered via blower. Most of the other expenses are pretty standard.

Rules-and-regs

Current Management Contract is with www.Clarksimsonmiller.com

Current lawn Care contract is with ACE Property Services map and Contract.

OLD Contract 2017-2023:Cedar Management Contract Renews Aug. 1st Every year. 90 Days notice required to terminate contract so must notify by May 1st to terminate.
The SBF board ocassionally gets suggestions to change managment companies. While it might seem like an easy solution, any new management company will take a few months to catch up to speed. If any
OLD contract 2020 - 2022 Byrd Landscaping Contract Renews July 1st every year, with automatic 3% riser for 3 years. Requires 2 or 3 month terminate clause as well.

SouthBridge Forest CCR's These are the community rules. They are what the rules and regulations document above is based off of. They were retyped so they are searchable July of 2023. The document is also shown Below:

Southbridge Forest - Contract - 8.1.pdf

sbf hoa ccrs

AOI sbf.pdf

Another article discussing putting corporate rental limits in an HOA.

How Worried Should You Be About Corporate Investors Targeting Your Condo/HOA?

June 2022

The Wall Street Journal recently reported on how corporate owners are purchasing more and more condo and HOA units and renting them out, prompting communities to work to reach supermajority thresholds to pass rental limitations. A similar story appeared on 60 Minutes, but from a rental-increase angle.

What's interesting to us is that just last year, we asked some of our experts whether they were seeing a noticeable uptick in condo/HOA buying on the institutional investor front, and they hadn't yet run across it. Perhaps it's more prevalent in minority neighborhoods, as the Washington Post seems to be suggesting in this article?

Here, we check in again to see whether the risk to condos/HOAs has increased since we last reported on the topic.

It's There, But How Big?

While Isaiah Henry, CCAM®, CMCA®, AMS, CEO of Seabreeze Management based in Aliso Viejo, Calif., which manages about 500 associations throughout California, says he's seeing the trend across the country, he adds that he's not seeing it much in the communities he manages. "I've seen it absolutely throughout the United States and California," he says. "Definitely, corporate investors are entering the condo and HOA space.

"In California, the majority of our markets are pretty hot," he adds. "There are companies like Zillow and Open Door purchasing one-off homes, but otherwise, I'm not seeing it in the communities we work with. I also haven't had client boards say they've seen the headlines about this issue and would like to discuss changing their community's rental policies as a preventive measure."

Janet Oulousian Aronson, a partner at Marcus Errico Emmer & Brooks in Braintree, Mass., who is licensed in that state, in addition to Rhode Island and New Hampshire, has also seen small entries into communities here and there. But what she's seen hasn't fit the mold of today's reports of large corporations buying big. "We're not seeing this big flood that gives you worry," she says. "Maybe it's happening more in Boston and I haven't heard about it. I have seen smaller, local corporations doing it. Maybe they have two, four, or six units, and that helps them in terms of managing the units when they're all in the same community."

A Growing Challenge

However, Scott D. Weiss, CCAL, a community association lawyer at Ortale Kelley in Nashville, Tenn., who represents more than 650 condos/HOA communities throughout the state, is sounding the alarm based on what he's seeing. "It's happening everywhere," he says. "I just saw a piece on NBC about a community in North Carolina on this very issue.

"This is gaining a lot of momentum throughout the country, and it's a huge problem for a number of reasons," he says. "A lot of management companies find it difficult to find a human being when the grass isn't being cut, bushes have died and aren't being replaced, or gutters are falling off the front of a home. Also, the danger is that if they buy too many homes in a community association, they can outvote the owners, change the documents, increase the assessments, and do whatever else they choose."

Aronson agrees there can be challenges with too many investor owners. "I'm not sure how corporate investors could be construed," she notes. "But I do have situations where a corporate entity tries to acquire multiple units in a building. The Federal Housing Administration and Fannie Mae and Freddie Mac have restrictions on the number of units that a single entity can own to qualify for loans. I believe FHA is 10 percent; I think Fannie is 20 percent, and I believe Freddie is 10 percent. That's one aspect of this issue that arises with corporate ownership.

"The other aspect that we do see happening, but it's not overwhelming so far, is that sometimes investors will get into a building and create a number of problems," she explains. "The community has more of a rental instead of a homeowner atmosphere. It can also give investors more control depending on how many units they acquire. And if that ownership entity doesn't survive, there can be a financial problem for the community if a good share of the expenses are tied up with one owner."

A Bigger Societal Challenge

The most pressing concern for Weiss is for today's renters trying to step onto the housing ladder.

"The biggest issue, and the one I'm the most passionate about, is housing availability and affordability," he states. "They're very aggressive with these purchases of homes and trying to build their portfolios of as many homes as possible. It's not limited to homes valued at $300,000. They buy in subdivisions of $1 million-plus homes. But in Tennessee, a $300,000 home is still a nice-sized home.

"These corporations are buying so many homes and paying cash—sometimes above the list price—and they'll hold them forever," says Weiss. "They never, ever sell them, so they've effectively taken those residential homes off the market forever. They're doing it in such large numbers now that it's part of the reason home prices and market values are so artificially high."

Weiss points to a Redfin analysis showing that 18 percent of the homes in the United States are now owned by investors, up from 11 percent just a year before.

"What they've done in my area, though it's not solely due to their actions, is created a situation in which there's no affordable housing," contends Weiss. "Particularly for first-time homebuyers, there's nothing. If this continues, I predict that in two to three years, that number will have increased to 20-25 percent—and that's not good."

Somewhat more skeptical is Molly Peacock, counsel at Rees Broome in Tysons Corner, Va., who has represented condos and HOAs for 16 years. "It's interesting," she says. "It's not an explosion where there's any concern among my clients. Sometimes I hear alarmist kind of statements of investors buying property and not living in them and that the result is bad for homeowners because they suffer because the market is out of whack. That's what I've heard, and I don't know what to make of it."

What You Could Do

Weiss is discussing this challenge with clients and leaving decisions about whether to amend governing documents to limit investor purchases up to those clients. "They can have an absolute prohibition against leasing for future owners," he explains. "But a law was passed in Tennessee last May that requires that associations that adopt long-term leasing restrictions exempt all those current owners from the new provisions. We can still restrict short-term leasing.

"Most of my clients will adopt an amendment saying that new owners must own and occupy the unit for 24 consecutive months before they rent the unit out," adds Weiss.

Even then, Weiss believes corporate owners may try to create workarounds, so he adds other language seeking to outwit corporations that might try to maneuver around rental restrictions.

Aronson's clients have adopted similar rules, though not in response to what many consider today's growing challenge. "We have case law on this in Massachusetts," she explains. "What we've done is to amend the documents for many of my clients to say that no person or entity can own more than whatever number of units the community decides is appropriate. Maybe it's two or four. Or maybe the board grants limited exceptions based on the number of corporate owners already there.

"We also say that no single person can have a direct or indirect interest in an entity that owns these units," she notes. "That way, investors can't create a separate LLC for each unit and skirt the rules."

Peacock is also happy to work with clients who want to restrict rentals. "I haven't heard more concerns from boards recently, but I've heard them pretty much throughout my career," she explains. "I advise them to make sure we limit the rental cap. Often, there's a maximum of 20 percent of units that can be rented in our communities. Some developers build that type of provision into the documents from day one to make the community attractive to homebuyers.

"I tell clients who have concerns that amending is perfectly fine and we should do it," says Peacock. "Does it help? It's anyone's guess. How do we prove we avoided problems? That's impossible to prove, and if it makes boards feel better that they accomplished that, good for them."

Peacock also stresses that even communities that don't restrict renting still have tools to use against owners whose actions might alter the feel of a community. "What I tell boards who worry about investor-owned units is to treat the unit exactly the same as if it weren't investor owned," she explains. "If there are problems caused by investor owners, stop those problems.

"Send the owners a letter telling them to cut it out and explaining what happens if they don't," she says. "If they're breaking rules, we'll sue them. But in my experience, the biggest problem creators are still homeowners—not renters. I hear a lot of anecdotal stories or worries about renters. But I don't see that they cause more of a problem than homeowners. If they do, we need to go after them. The answer is the same."