by Deborah Goonan, Independent American Communities
A retirement community of 8,500 residents in Maryland is embroiled in an ongoing dispute over the cooperative corporation’s proposal to spend. $5.2 million on construction of a brand new administration building.
ABC7 reports that hundreds of residents showed up for a recent town hall meeting on the subject. The meeting was organized by Leisure World residents, including Sheryl Katzman and Bob Ardike. Both Katzman and Ardike say that most residents agree that their $5.2 million capital improvement fund would be better spent on upgrading community amenities such as the club house or pool, or saved for inevitable future projects.
Dispute brews over $5.2 million reconstruction of Leisure World building in Maryland
by Kevin Lewis/ABC7Wednesday, August 2nd 2017
ASPEN HILL, Md. (ABC7) — There is a roaring debate beyond the gates of Leisure World about the feasibility of constructing a modern $5.2 million administration building.
“It just sort of makes no sense to us,” said Leisure World resident Sheryl Katzman who is leading a charge to dismantle construction plans. “I’d say 95 percent of the people we talk to are opposed to this. It’s a fiduciary failure.”
On Friday, Katzman and fellow dissenters hosted a town hall in the Crystal Ballroom located inside the community’s main clubhouse. Despite torrential rainfall, more than 300 curious residents came to listen and ask questions about the pricey proposal.Read more (Video):
According to information posted on Leisure World’s website, improvements to several meeting areas in the Club house and construction of a 5,300 square foot fitness center were recently completed. Additional enhancements are also planned for the 18-hole golf course.
The new Administration Building, referred to as an “ambitious project,” will be 21,000 square feet – about 4 times as large as the new fitness center. According to the description on the website:
Sited near Clubhouse I, our newly constructed Administration building will introduce a bi-level, 21,000-square-foot central center to our community. Housing community amenities, administrative departments, and a conference center, the structure will feature energy-efficient building systems and incorporate storm water management practices. Architecturally, the design will reflect existing buildings in the community, utilizing linear rooflines, deep overhangs, and natural stone and brick elements.
It is unclear exactly what kind of “community amenities” will be housed in the new Administration Building, and what portion of more than $5 million will be used to construct recreational amenities that benefit residents and homeowners as opposed to being sunk as purely administrative costs.
It should be noted that all of these capital improvement projects are funded by a 2% fee imposed on all home sales in the community, not by regular HOA assessments. However, as in any common interest community, homeowners disagree about the best way to spend the Association’s money, regardless of the source.
Leisure World Maryland began as a housing cooperative project in the 1960s, and early phases of development were organized a mutual cooperatives (about 900 homes). Later phases were created as condominium associations. There are 29 Mutuals (separate housing associations) that all contribute to the amenities corporation, Leisure World Community Corporation. (LWCC)
In recent years, Katzman and other residents have objected to the way LWCC is governed. The governing documents provide for one representative from each Mutual to make decisions about how to allocate funds to various amenities. But Katzman and other residents think that LWCC should seek direct input from all of its members, and not rely solely upon LWCC board trustees to speak for more than 8,500 residents.
Important points for home buyers
When buying into an active adult community or a master planned resort community, housing consumers should be aware that common amenities are expensive to maintain, and they will eventually require renovation or reconstruction. In some cases, all members of the association are required to pay their fair share of these costs, regardless of whether or not they regularly enjoy use of recreational facilities. In other cases, residents can choose to opt in or out of certain memberships – golf, tennis, fitness club, etc.
It is important to carefully review all governing documents for the community to fully understand your financial obligations. You may want to consult a reputable real estate or corporate law attorney to answer any questions you may have.
It is also important to realize that large resort communities tend to dilute the rights of individual members by way of representative voting on important decisions at the Master Association level. As an individual owner or shareholder, you may not have any legal right to a direct vote on budget decisions or amendments to governing documents at the Master Association level. Your voting rights could be limited to a direct vote for the association board for your own individual phase of development (Mutual, Village, Sub-association, etc.). However, only board members of your Association have the right to choose one representative to serve on the board or trustees for the Master Association that governs the entire community, often including most of the recreational amenities.
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