THANKS TO ALL THOSE WHO HAVE GENEROUSLY CONTRIBUTED TO THE OCEAN SANDS LEGAL EXPENSE FUND!
We need ALL Owners to Participate
Your Governance Committee is very excited and appreciative of the volume of responses in such a short time since we distributed the “Requests for Contributions” email on Friday, 8/5. Responding owners indicated that they were strongly supportive. Some have questions they would like answered before they write their check. We think that it makes the most sense to share the questions and answers with all of the owners.
The Governance Committee is taking the lead and providing the structure, however, we need the support and participation of all owners. Please contribute your $200 now, by going to our website: www.oshoa.org. Select the PayPal “Donate” Button located on the right-hand side of each and every page. Or, send a check by mail to “OSCP Owners Fund,” PO Box 56, Corolla, N.C 27927. Any excess funds when the legal process is completed will be returned proportionally to all who have contributed or credited towards your future annual dues. If you choose to donate through PayPal, please consider increasing your donation by 2 percent to cover their fee.
We are not able to provide detailed answers for some of the questions, because of the many variables involved with the overall situation and the inability to anticipate Coastland’s reactions and behaviors. Below are the most frequently asked questions.
Please share this information with your neighbors here at the beach — it isn’t possible for the ten Governance Committee members to talk to all 900 owners individually.
WHY NOT JUST CHANGE THE BYLAWS?
The sections of the By-Laws that would give control to the Owners can only be changed by the vote of the Developer Members of the Board of Directors. Three of the five Directors are appointed and controlled by the Developer, Coastland Corporation. Owners have no say in this arrangement! This gives Coastland control over all community issues. Coastland has repeatedly said (including at the 2015 Annual Meeting) that they were never going to leave or give up control.
CAN WE JUST CREATE A NEW OWNERS ASSOCIATION?
It would not be helpful to form a new Association. The existing POA was created in conjunction with the development of Ocean Sands North in 1974 and was authorized by the Declaration of Restrictive Covenants. Belonging to and being obligated to pay dues to OSPOA is included in the deed to your property. If owners paid dues to a new POA, they would still be legally obligated to pay dues to OSPOA.
WHY CAN’T WE JUST USE THE NC PLANNED COMMUNITY ACT OF 1999 (PCA) TO FORCE COASTLAND OUT?
That is our primary strategy. This law requires 67% of property owners to approve in writing an amendment to the Declaration that elects to apply the provisions of the Planned Community Act to OSPOA, and which changes the board structure to be composed solely of homeowner board members. Also, keep in mind that there is no state enforcement agency to make Coastland comply. Most likely, we will have to sue Coastland to have a judge order them to comply. Lawsuits take money for lawyer fees and filing costs, which is why we are requesting your contribution. We will need your participation when it is time to adopt the PCA; we will need to provide a written consent to the Declaration amendment to adopt the PCA and to remove the Coastland directors from the OSPOA board.
HOW MUCH MONEY HAS BEEN SPENT ON LEGAL FEES?
As of July 31, we have spent approximately $4,500. This was to hire James Slaughter, of Slaughter, Black and Slaughter. James Slaughter is the NC Chapter President of the Community Association Institute (CAI). He specializes in Community Association Law. He has reviewed the OSPOA legal documents, advised on next steps, and filed the first lawsuit.
HAS A LAWSUIT BEEN FILED YET?
Yes, in June 2016, a lawsuit was filed to compel the OSPOA and Coastland to provide us with operational information about the POA that the NC Non-profit Corporation Law says they must provide. Coastland has until August 24, 2016 to answer this complaint. This action was funded by contributions from Owners that the Governance Committee knew personally, but in order for future efforts to be successful, they need to be funded by the entire constituency of Owners.
WHAT IS OUR LEGAL STRATEGY?
We plan on using the NC Planned Community Act law to give the owners control of the conduct and operation of the POA. The exact details of future actions will evolve depending on (1) the outcome of the lawsuit for Production of Documents filed in June 2016, (2) the advice of legal counsel, and (3) Coastland’s actions. Our ultimate goal is to have the POA controlled by the owners rather than the developer. At this point, our attorney advises not to divulge the specifics of our legal strategy.
HOW MUCH MONEY DO WE NEED TO RAISE?
That depends on how aggressive Coastland seeks to defend itself — and, you can be sure Coastland will claim to be protecting you, the owner, from yourself! The minimum funding goal, given what we know at this time, is $60,000. Costs could rise. Any excess funds will be returned to the owners proportionally or credited to future dues. If you have not contributed yet, please go to the web site and do so today via PayPal atwww.oshoa.org or mail your check to “OSCP Owners Fund, Inc.,” PO Box 56, Corolla, NC 27927.
We cannot have a situation where any owner feels they can leave the fight to others!
It is impossible to predict how long the legal process will take, although our attorney has advised that it’s likely an 18 to 24 month process. It depends on how aggressive Coastland decides to be in the litigation process. But, there’s no time like the present to take action, as delaying initiating legal action will only extend the time until this is resolved.
WILL MY ANNUAL DUES INCREASE?
It is too early to tell with any certainty, but with Coastland not managing the POA, you can be sure that there will be no “surprise” 30% dues increases as Coastland levied on all owners in 2016 without notice or justification. The Owner-controlled POA will feature transparency, the opportunity for owners to be heard on all major subjects, respect for the votes of the owners (unlike now), and better oversight of daily POA operations. We believe that the POA can be managed for a cheaper cost; however, we do not fully know the cost of correcting conditions resulting from Coastland’s long-term mismanagement.
HASN’T COASTLAND TURNED MANAGEMENT OVER TO SEASIDE MANAGEMENT? AND, WON’T THAT MAKE THINGS BETTER?
Officially, Coastland still maintains control, and in practice dictates what Seaside Management can and cannot do. As such, Seaside Management is just another layer of expense. Bob DeFazio remains the Site Manager. While Seaside Management may be a competent property manager, the Owner Board Members still have little influence on what Seaside does. That is why Coastland’s control of the POA must end.
HOW MUCH WILL MY PROPERTY VALUE GO UP?
This is impossible to predict because there are so many factors that affect property value. However, we know that poor past management has reduced property and rental values, as buyers’ real estate agents shy away from showing homes in Ocean Sands due to the condition of the physical plant, and because of Coastland. The question you should ask yourself is whether a better managed POA is likely to increase your property value more than your $200 contribution toward legal expenses?
WHEN COASTLAND IS GONE, WHO WILL GOVERN?
You, the Owners, will govern.
The Governance Committee foresees a Board of Directors composed of seven Owners, elected by their fellow homeowners. The present day dictatorship will be replaced with self-rule through a board composed of owners. The Committee envisions a complete Restatement of the By Laws Revision being voted on by all Owners following the judge’s ruling in our favor.
WILL THERE STILL BE A MANAGEMENT COMPANY?
Probably, but it will be selected and controlled by the new Board of Directors and the Owners, after a thorough research process. The new company should be much more efficient and effective than the current three layers of management that are consuming a third of our budget.