Upon commencing work early this year, the committee wanted to be assured that all actions taken on behalf of homeowners would be correct and legal. As such, we initiated a review of the legal standing of the Association as well as all legal actions previously taken. What we discovered was not encouraging.
The very short version of what we found was that (as many of you know from reading the CC&Rs) this association was formed by Lecheria, not by the homeowners (of which there were very few at the time of formation). Additionally, we discovered that a number of legal filings presumably made on behalf of the Association by prior counsel were, in fact, not accomplished. Also, some time ago, Lecheria divested itself of the actual Valle Escondido property, so there remains no reason that the Association should be under its legal auspices. Additionally, counsel has just now informed us that with the recent $1.354 million judgment by the Supreme Court in a lawsuit against Lecheria, there is a remote, but potential, risk that the plaintiff could pursue the funds of the Association in the event Lecheria does not pay the ordered settlement. That possibility exits because the existing association was formed by Lecheria. So, potentially there is some legal risk to the Association’s assets due to actions taken by Lecheria in the past or future.
We know that there are many things that need to be addressed, corrected and updated in the CC&Rs. This can be done regardless, but we believe that the correct way to do this is to first create a new, legal association and close the old one. Moving on from there, all actions and activities will be on firm ground and the Association will truly be one that the homeowners have formed and will control.
All this will take some time to do because of the Panamanian legal structure and processes. It is not, however, particularly expensive. The exact cost is unknown, but there is little legal (attorney) work to be done. The majority of the actual expense will simply be notary and filing fees. Those are estimated not to exceed two or three thousand dollars and hopefully will only be in the hundreds. This will take a number of months (or more) to accomplish, simply because of all the governmental “processing” time. This ballot item is simply to bring to a vote by the homeowners the authorization for the committee to begin the changeover process.
However, in order to proceed with this action we need a very large majority to vote for approval of this initiative. Per the bylaws of the existing association, a favorable vote of 75% OF ALL OWNERS (not just of those voting) is required. So please, cast your vote!
We obviously and strongly urge your approval of this ballot measure. If not passed, our Association will continue to be the one formed by and under the auspices of one of the developer’s companies.
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6 comments:
Four Good Reasons to Fix what is broken....
1) The CCRs were created by the developer and are filed by his company Lecheria. At no time did homeowners have a say or vote in this creation. Many bought and built before the CCRs were filed in 2004.
2) The CCRs have multiple references to the for-profit company of Lecheria. HOAs should be non-profit entities.
3) There are many "mistakes" within the CCRs that make it difficult to interpret. One glaring omission is any means of assessing and collecting fines should there be a violation of the CCRs. While we have no desire to add more rules or governance to our lives, many homeowners bought into a gated community and association because there are some controls (ie. over noise, lot maintenance, farm animals as pets, etc.). Without procedures for enforcing the rules in the CCRs, our only hope is that all our neighbors decide to play nice and follow the rules in place.
4) With multiple references to Lecheria, the development is essentially still under the developer's control. Over 95% of the lots in the valley are now sold. It is now time to be a HOA governed by homeowners.
HYou committee has worked hard this year to address several large problems. One of them is the structure of our organization. We have been given legal advice by several attorneys and are following their suggested course of action.
Our Association should be set up and controlled by the homeowners, no one else. It should be independent of any other business or person.
To do this we must set up our own Association. The developer did a good job getting this off the ground but there is a flaw in the organization and it needs to be fixed.
Fene
Villa 131
Like many, I believe, I have concerns regarding the power imbalance existing between VEHOA and the developer. In all likelihood this change in legal structure will not completely level the playing field but it, along with previous changes, will take steps in that direction, and it will make it simpler for future changes. The Board has assured me that they have competent legal counsel and there should be no deleterious unintended consequences. Thus I'll be voting in the affirmative.
It is time for the Homeowners to have our own Association. The developer is almost finished with VE and needs to relinquish control.
If you take the time to read the CC&Rs and look at others available on the internet you will find that the references to Lecheria are in keeping with any development company until they have completed the project. I still have 6 lots, 10 unsold finished condos, one un-built condo 4-plex and permits for another two condo/hotel buildings with 15 more units next to the completed three-story building. This is a total of 35 units still to sell, which represents about 25% of the total properties. All of these properties are shown on our properties for sale web site so I don’t know why a reference to 95% complete is being thrown about. Naturally I have a vested interest in seeing that the project continues to my original vision.
I have gone through each article where Lecheria is mentioned and I do not see any area that affects the operation of the association or property owners in a negative way. The only clause that places any control over the association by the developer is the right to veto via class b shares until all the properties have been sold. Please note that it does not give the developer the right to introduce new regulations, enforce regulations or raise fees. It only gives him the right to veto any action that requires a vote by the property holders that he finds offensive.
To just say “Our Association should be set up and controlled by the homeowners, no one else!” does not take into consideration that the developer has spent a great deal of time, money and effort to create this project and still has a significant investment that has not yet been realized. The developer has a multimillion-dollar resort operation within the community that brings great benefits to the property owners without any of the expense of its operation. In every way the developer has the financial and ethical incentive to see that Valle Escondido continues with his original vision.
If the committee wants to add amendments it finds are needed to correct any deficiency as they have in the past they should present them, but I am not in favor of throwing out the baby with the bath water.
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