Notarizing is EASY

So many owners have told us that the only thing stopping them from sending in their Written Consent form is the need for a notary. The notary requirement is one we would have gladly skipped, but our attorney warned that not having a notary certification on each form would create a potential claim of fraud.

All forms need to be notarized. Normally, we only see notaries when buying or selling a home or signing a will. For most people these are not frequent activities. We are hoping a quick set of reminders will help get many owners over the hump.

WHERE:
Notaries are available many places. Wherever you find a notary, the seal will be honored in North Carolina. Follow this list in order of ease:

  • Your bank – almost always has a notary in the branch. Often notarization is free if you have an account.
  • Public Library, commonly free
  • UPS or FedEx stores are very convenient, not free
  • Real Estate firms, usually
  • Your employer may have a notary in the Legal or HR department
  • Law Offices, always

HOW:

  • Print out the form and complete it, but do not sign it yet
  • Go to the notary you found above
  • Sign the form in front of them
  • Provide your driver’s license or passport as identification
  • The notary will examine the driver’s license to identify you
  • Often, they will record your information in their logbook and you may be asked to sign. This is in case the notarization is ever challenged.
  • The notary will fill in the Certification section, sign, date, and stamp the form. The form will be returned to you.

POINTS TO REMEMBER:

  • All owners need to sign for Joint or Partnership, but they can sign different copies of the form. The attorney will match them up.
  • For Trust ownership, use the Trust form. All Trustees must sign, but they can sign different copies of the form. Fill in the exact name of the Trust (we can find it for you). When you sign your name, write “Trustee” after your signature.
  • For LLC ownership, use the Corporation form. Fill in the name of the LLC. When you sign your name, put your corporate title after your signature. It might be Manager, CEO, President, Owner, etc. It is never Registered Agent.
  • Mail the form directly to the attorney. The address is at the top of page one.


Getting the Written Consent form notarized is not be a burden. Total time at the notary should be well under 15 minutes if you are prepared. The forms notarized at the Annual Meeting by our mobile notary usually took less than 10 minutes, unless the owners wanted to chat. If not free from your bank, notary fees run between $2 and $15 depending on state laws. The need for a notary should not be an obstacle to submitting your form. Over 560 forms have been submitted already.

If you have any questions, or need a blank form please reply to this email.

The Governance Committee,
Al, Rick, Jean, Dennis, Chris, Greg, Jim, and Robert

More Progress Toward Self Governance – Update on Consent Forms

More Progress Towards Self Governance
Now that the annual meeting has passed, we thought you would want to know the status of our community’s effort to achieve self-governance.  We have been making steady progress! Thank you.

By the end of the Annual Meeting, a total of 552 properties have approved the change by completing their Written Consent Form. This represents 80.4% of the legally required signatures to remove Coastland’s control of the Ocean Sands POA Board. Technically, this is done by cancelling the special Developer Class of voters in the Declaration of Restrictive Covenants. Coastland will have just one vote for each of the eight (8) lots they still own. 

We, us, all the owners, within Ocean Sands North are so close.  Finally, this feels like it is a very achievable effort and it is.  At this point we request (read – need!) every owner who has signed to check with your immediate Ocean Sands neighbors, the house to the left, the right, and behind you.  Convey to them the urgency and necessity of removing the tyrant crippling our chances to improve the quality and value of our community!

If you haven’t signed please re-read all the variouscommunications concerning Coastland’s poor treatment of our community and the Ocean Sands POA Board. The change to all-owner control will only benefit you and all your fellow owners! Reply to this email with any questions or concerns.

Governance Committee

Al, Rick, Jeanne, Greg, Chris, Jim, Robert and Dennis

Watch for the Annual Meeting Overview email  –  coming soon!
Copyright © 2019
Home Owners Of Ocean Sands Governance Committee
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MEET THE GOVERNANCE COMMITTEE TO LEARN WHY THINGS MUST CHANGE email to owners 11.20.2018

This email is to all Ocean Sands North owners who have not yet signed the Written Consent to Amend the Declarations. The Meet and Greet weekends have been so successful that we want to offer one last opportunity this year for owners to ask questions of the Governance Committee in person.

This written consent is a legal method under the NC Planned Community Act of 1999 to wrest control of any POA from the Developer. In our case, this process will remove Coastland’s authority to appoint three of the five OSPOA board seats. All Board members will be owner elected. As it stands, because of the Declaration, the developer, Coastland Corporation, has complete decision making over every aspect of our Ocean Sands community.

For the last three years, we have sent numerous emails and letters explaining why the owners should be in control of their own community. Control means having your vote count when deciding significant issues in Ocean Sands. Control means having a say in how your dues money is spent. Control means deciding the priority of the many necessary tasks that could and should improve Ocean Sands.

If you would like to chat one on one with a member of the Governance Committee, we will be available on Saturday, November 24 at the COROLLA PUBLIC LIBRARY from 2:00 pm to 4:00 pm. The Library is the white building on the right on Rt. 12 just north of the lighthouse, 1123 Ocean Trail.  We are providing a free notary. There will be light snacks and refreshments.

Please reply to this email if you can drop by. No formal presentation, just owners talking to owners. If your schedule suddenly changes, come on by anyway. If you would like to speak to a Governance Committee member separately, please reply to this email.

The Governance Committee
Al, Rick, Jeanne, Greg, Robert, Chris, Jim, and Dennis

Copyright © 2018
Home Owners Of Ocean Sands Governance Committee
All rights reserved

Visit our website: http://www.oshoa.org
Send us an email: admin@oshoa.org

Join us on Facebook: Home Owners Of Ocean Sands

Our mailing address is:
P.O. Box 56, Corolla, NC 27927

A Response to Coastland’s Letter to Owners …from an owner

Many of you received a letter from Coastland Corp dated November 22, and full of misinformation and inaccuracies. One owner, shared his response to Coastland on our Home Owners of Ocean Sands Facebook Group. With his permission, we share it with you here.
Thanks to Andy and to all of you who have shown your support and sent in your written consent forms to amend the declaration,
The Home Owners of Ocean Sands Governance Committee

“To Jeanne Marcinko and the Coastland Corporation – (and Home Owners of Ocean Sands)

Your recent communications to the Homeowners of Ocean Sands are deceptive and far off the mark. I am not sure if you are just naive, doing the bidding of your owners, or too recent an employee to know. I would have though 10 years would have educated you.

My wife and I have been “non-resident” owners for over 25 years and fully endorse the efforts of the Governance Committee. There are more non-resident “Dissident Owners” than residents. Up until about 10 years ago we rented during the summer rental season, but then stopped when the headaches became too great. We now get to our house as frequently as we can and will spend more time there after retirement.

Over those 25 years we have never seen evidence that Coastland had any serious interest in the owners, it has always been about what’s best for Coastland. This goes back to the original association by-laws which give Coastland the majority of the Board members until EVERY lot is sold. This is the most restrictive and controlling provision I have ever encountered (and I have served on two other home owner’s boards). The 3 controlling Coastland Board members have continually denied the 2 home owner Board members access to financial information, to the extent the current home owner members have had to go to Court to try to obtain the information necessary to perform their fiduciary responsibilities to the home owners. Contracts are signed with outside management companies, security firms, and others without home owner input. It not clear there is any open solicitation of bids for work to be done or evaluation of proposed contracts as Coastland does not share that information with owners.

As an example, the current Coastland Vice President and local representative’s son holds both the contract for security services ($61,550) as well as the contract for Trash Can Roll back ($24,840). Is this a bit of nepotism or were these contracts put out for bid and fairly competed? We don’t know because Coastland has not shared the information with our Board representatives. I could go on with other examples from over the years. Rick and Al our Board members and the Governance Committee have shared many other examples and reasons why Coastland has clearly demonstrated a disdain for the home owners and treated us as indentured servants.

Coastland tries to make an argument that they have saved us money and it will cost more going forward without them in control. First, I am not convinced that’s true as they have not been open with their books, secondly I am tired of being treated as a child where Coastland knows better, and finally, even if there is some added expense WE the OWNERS will be in control of our Community!

I encourage all owners to return their signed and notarized ballots to enable we the owners to take control of our association and end the patronization of Coastland.

Andy Bates
Connie Rubler
Columbia, MD”

If you are a homeowner in Ocean Sands North and have not joined our closed, owner-only Facebook Group, search for "Home Owners of Ocean Sands" on Facebook, and ask to join. If we have your contact information, we will approve you as a member of the group. If we do NOT have your contact information, please send it to us at admin@oshoa.org

WRITTEN CONSENT TO AMEND DECLARATION

AFTER 40 YEARS, IT IS TIME FOR OWNERS TO
TAKE CONTROL OF OUR OWN COMMUNITY!

The time has finally come. Attached is the Written Consent Amendment necessary to change the Declarations of Restrictive Covenants to eliminate Coastland’s control of Ocean Sands Property Owners Association (OSPOA).  

For the last two years we have been sending emails to as many owners as possible explaining why the owners should control OSPOA, not Coastland Corp.  In short, the reasons are Coastland has an inherent conflict of interest being both the Developer and running OSPOA, and Coastland is not very good at running OSPOA.

We apologize for the delay in getting this to you, but Coastland filed new Declarations for each Section instead of modifying the existing Declaration. It took an inordinate amount of time and special effort to determine the correct way to write this Amendment.

To successfully wrest control from Coastland, we need two-thirds (2/3rds) of the homeowners to sign and notarize the Written Consent, and return it to the law firm representing us.

There are three forms attached, the only difference being in the Notarial Seal area. These forms are safely hosted on a private server and are no larger than 167 kb in size.

You only need to complete one form, but it must to be the right one based on how title to your Ocean Sands property is held. In short, signatures should follow the deed to the property. To make it easier, see below:

If husband and wife own the lot and are on the deed, both need to sign and date in the presence of a notary.  If multiple individuals own the lot and are on the deed, all need to sign, including any partnership. If it is a hardship for all individuals to be present, individual signed, dated and notarized pages are permitted. Click the link below to retrieve the form for Individuals:
2019 Written Consent Form.Individual


If the property is held by a Corporation (either an LLC or an Inc.), use the form for Corporations and have it signed by the Managing Member or President of the company. Click the link below to retrieve the form for Corporation or LLC
2019 Written Consent Form.Corporate.LLC

If the property is held in a Trust, use the form for Trusts and have it signed by all Trustees. Click the link below to retrieve the form for a Trust:
2019 Written Consent Form.Trust

Again, if it is inconvenient for all owners to sign one piece of paper (perhaps due to distance between owners), you may submit multiple copies as long as, in total, all required signatures are present. Please indicate that there will be multiple forms submitted to the law firm, so the firm does not contact you for missing signatures. If, in the case of multiple owners, all signatures do not fit on one form, you also may use an additional signature page.

Notaries may be found at your bank, most libraries, legal or realty offices, and most UPS Stores (fee). In order to preserve the “chain of custody” please mail the completed form back to:

James H. Slaughter
Black, Slaughter & Black, P.A.
P.O. Box 41027
Greensboro, NC  27404

-PLEASE DO NOT mail it to the Governance Committee PO Box-

We thank you for your cooperation in completing and returning this form to our attorney.  While Coastland has recently taken a couple of small steps in the right direction, it is too little too late and does not solve the Coastland’s unavoidable conflict of interest between Developer and community interests.  We will not be able to optimize the management and maintenance of our development until we take control of the POA like Crown Point recently did.
Governance Committee,
Rick, Al, Dennis, Jeanne, Robert, Chris, Greg and Jim

PS: If you have any questions, either reply to this email or you may call one of the volunteers on the Governance Committee listed below:

Dennis Heffernan 919 518-7482
Rick Kinner 252-453-6059
Jeanne Fitzpatrick 202-256-2823
Al Marzetti –  919-475-4064

Greg Walkup – 757-465-0386

JOIN US TODAY ON FACEBOOKHome Owners of Ocean Sands

The Planned Community Act Explained, Part 2, 12/12/16

 

The Planned Community Act Explained
Part 2

In this email, we explain how the PCA works and the relief it offers to communities like ours


Executive Summary:

  • Prior to 1999, planned unit developments such as Ocean Sands North were regulated only by the Declaration of Restrictive Covenants and Association Bylaws (the “Governing Documents”) created by the Developer.  Few legal protections for owners existed. Often, the Governing Documents failed to address key issues relevant to the governance of a planned community, thereby creating confusion and uncertainty.  Also, provisions were usually heavily slanted in favor of the Developer.
     
  • The PCA was enacted in 1999. The purpose is to provide more specific guidelines for governing planned communities, while leveling the playing field between Developer and home owners.
     
  • For communities already in place, like Ocean Sands, some of the PCA provisions apply; however, these “retroactive” sections don’t provide a fulllegal infrastructure for good governance.  As discussed in an earlier article, these retroactive provisions do furnish the “path to freedom” from Coastland. Crown Point just walked the path to freedom, successfully.
     
  • The Governing Documents applicable to Ocean Sands Property Owners Association (OSPOA) are worse than most “pre-1999” communities; our lawyer has commented that they are the “most egregiously offensive and poorly drafted” governing documents he has ever seen.   And…even where rules exist, Coastland frequently ignores them.  Adoption of the PCA would give us a new “constitution”, with individual owners in control.  The OSPOA Governing Documents are posted on our website at Ocean Sands Legal Documents.
     
  • In conjunction with ousting Coastland, Crown Point POA also elected to have the entirety of the PCA apply to themselves.  Adoption of the full PCA makes good sense for Ocean Sands POA too.

Discussion in Detail:

In 1999, the North Carolina General Assembly enacted the North Carolina Planned Community Act.  The PCA was intended to establish certain rights for property owners in “planned communities” and provide clear procedures and guidelines for their governance.  Planned Unit Developments (“PUDs”) such as Ocean Sands North are considered to be “planned communities”.

Prior to the PCA, planned communities were governed solely by the Declaration of Restrictive Covenants, the Articles of Incorporation, and the Bylaws (the “Governing Documents”).  Sometimes (but, not in OSPOA’s case) a set of Rules & Regulations was also created.   

OSPOA’s Governing Documents are poorly drafted, ambiguous and often internally inconsistent. They are written to guarantee continued control by the developer, Coastland Corp. The documents fail to address many key issues critical to modern governance of a planned community.  

The Declarations have been amended so many times that our lawyer is having a hard time determining what currently applies.  The Bylaws are horrendous — drafted in the early 1970’s by a sole practitioner attorney in Manteo less than 5 years out of law school.  You may recall our earlier articles covering the numerous (over 50) problems with the current OSPOA Bylaws.  In sum, the OSPOA Governing Documents don’t provide a solid framework for running a 1,000+ unit owners’ association.

A key purpose of the PCA is to fill the gaps not addressed in Governing Documents and to override unfair provisions.  It provides a full set of rules covering all aspects of operating a property owners’ association such as: Applicable Notice Provisions, Rules for conducting Board Meetings, Voting & Elections, Approval of Annual Budgets, and Penalties for Rules Violations.  The PCA eliminates the guesswork created by inadequate Governing Documents and ensures a level playing field.

The most common problems that arise in “non-PCA” communities relate to the transfer of common elements (think Open Spaces, streets, dune boardwalks), easements over common elements, and the adoption of the annual budget.  Allof these are issues for Ocean Sands North.  

As the legal issues relating to common elements are less fun than watching paint dry, let’s just consider one of these – approval of the annual budget.

The budget is obviously of great interest to owners because it drives the level and types of services required as well as the dues.  Typically, “pre-1999” communities only provide limited owner control over the budget; for example, the right to approve budget increases greater than 5% and/or the ability to vote out a Board that adopted an unpopular budget.   We have neither – basically, we have NO control.  The OSPOA Bylaws contain no provisions relating to the annual budget process. Because Coastland controls a majority on the Board, we don’t even have the ability to “throw the bums out”.  

The PCA requires that, after preparing a budget, the Board must submit it to the owners in advance and ask the membership to ratify it at a membership meeting.  If the Members don’t ratify the budget, then the prior year’s budget stays in effect until a new budget is ratified.  This PCA mechanism thus gives owners some level of control over the budget.

In short, the PCA gives the answers to the key questions that arise in governing a planned community.   We clearly don’t have that now.  Right now, the developer alone makes every decision to act – or not

Just to give you an update, a full eight months later, we still do not have: (1) final annual meeting minutes from 2015 or draft minutes from 2016, (2) a 2016 budget (ratified or otherwise), or (3) approved 2015 financial statements.   Despite a commitment made at the 2016 Annual Meeting (and repeated requests from owner board members), Coastland has refused to call a board meeting to resolve these outstanding issues.  Additionally, Coastland has twice installed a new POA Board Member without a board meeting, just as they did with the hiring of the property management firm (at owners’ expense).  The Architectural Committee continues to be wholly comprised of individuals who are deceased.  

For those interested in greater detail on the law applicable to NC Community Associations, please visit this link to an FAQ on Black, Slaughter, & Black’s website: FAQs-About-NC-HOA-Condo-Associations.  The author, Jim Slaughter, is representing us and also successfully piloted Crown Point to freedom.  Here is a link to the complete PCA statute.

Your Governance Committee,

Al Marzetti, Rick Kinner, Chris Markwith, Dennis Heffernan, Greg Walkup, Jeanne Fitzpatrick, Jim Bonfils, and Robert Minnich

The Future Of Ocean Sands – The Planned Community Act Explained, 10/28/16/16

The PCA Explained

Dear Fellow Owners:

We will be responding to the Coastland “Open Letter” dated October, 21 and sent to all owners, in due course.  The following  message was planned for this week, as it is important that you understand the components of our strategy to achieve self-governance, regardless of the Coastland mailing.

When we speak with our fellow owners, it is very clear that they, too, want to remove Coastland Corp’s absolute control over Ocean Sands Property Owners Association (OSPOA), and allow owners to manage our own community.

Coastland wrote the OSPOA ByLaws more than 40 years ago to give themselves absolute control until every last lot has been sold. This provision cannot be amended by the owners, only by Coastland itself. Our attorney tells us this is the most one-sided set of ByLaws he has ever seen, and they would not be legal if written today.

We have found a way to fix this problem!  We know it works, because Crown Point implemented the strategy in the third quarter of this year.  As shared earlier this week, Crown Point was able to remove Coastland as the management entity on 10/22/16.  Regardless of Coastland’s contention, their removal was against their  will, utilizing available legislation.

The 1999 North Carolina Planned Community Act (PCA) defines how POAs are to be governed. But it doesn’t automatically apply to OSPOA because we were founded in 1974. The PCA does provide a way for us to change the ByLaws that Coastland wrote to maintain their domination. To accomplish this change requires the approval of at least 67% of property owners, either in person at a meeting (unlikely) or by written, notarized, consent.

The Governance Committee will eventually be asking you to approve this change by providing the required signed document. The document will stipulate that this is your wish (vote) and will contain just three provisions:

  1. The OSPOA Board will be owners only.
  2. The new Board will be able to amend any section of the ByLaws.
  3. The Declarations may only be amended after that by a 67% vote (so that Coastland cannot change them back to the old style).

We may also ask that you adopt all provisions of the PCA to apply to OSPOA, but will leave that discussion to a future email.

Crown Point has elected a new board and is currently in the process of early housekeeping matters such as opening a new POA bank account and transitioning service providers. They are excited to be able to run their organization in a manner that will enhance the livability and value of their development.

The Governance Committee is taking steps to increase our communication reach to virtually all Ocean Sands North homeowners (currently, we have e-mail addresses representing approximately 80% of the properties in the POA).  We are hoping that, when the time comes, all owners will become engaged enough to send their  written consent. We are currently several months away from sending out that solicitation.

If you have any questions, please respond to this email, at admin@oshoa.org. We will respond to them individually, unless many are the same, in which case we will do a follow up Q & A email to all owners. Further emails will follow as detailed in our email communication dated 10/23, entitled “Crown Point Successful in Deposing Coastland” .

With deep appreciation for your enthusiastic support,
The Governance Committee

Al, Chris, Dennis, Greg, Jeanne, Jim, Rick, and Robert

Crown Point Successfully Deposes Coastland Corp! 10/23/16

Crown Point Successful in Deposing Coastland Corp!

On Saturday, October 22nd, 2016, Crown Point owners voted unanimously to remove Coastland control of their POA board and make critical changes in their By-Laws!  Crown Point homeowners have now taken full control of the POA Board and are in the process of transitioning to self-governance.

Crown Point owners successfully executed the strategy developed by the Governance Committee to use provisions in the North Carolina Planned Community Act of 1999 (PCA) to wrest control of the POA from Coastland Corp and vest it exclusively in the homeowners!

As we are all painfully aware, Coastland had maintained control using By-Laws they drafted over 40 years ago.  Those By-Laws granted Coastland control of Crown Point until Coastland has sold every lot within the POA.  Further, the By-Laws provide that this “control” provision, as well as control of the finances could only be amended by the Developer – i.e., Coastland.

This year, Governance discovered the way out and developed a strategy to implement it.  The PCA provides rules governing planned communities.  However, the PCA generally applies to planned communities formed after 1998, and OSPOA and Crown Point dated to the early 1970’s.  In 2013 the PCA was amended to permit “Pre-1999” POA’s to change their Declaration of Restrictive Covenants (Declarations) by the vote or written consent of 67% of the POA membership.  Because provisions in Declarations take precedence over By-Law provisions this provides a mechanism for homeowners to break the shackles of Developer control and achieve self-governance.

Crown Point secured the favorable written consent of over 90% of their owners in September to amend their Declarations to provide for a Board comprised solely of homeowners.  Coastland refused to file the Declaration Amendment, so our attorney filed it directly with the Register of Deeds.  Coastland dragged their heels in calling the required Special Meeting, but it was finally arranged for October 22 and the rest is now pleasant history.

The owners of Ocean Sands and Crown Point have now defeated Coastland Corp. on three separate issues:

  • Coastland was against building the bike path unless families and children crossed Rte. 12 to get to it.  Common sense prevailed;
  • Coastland opposed the creation of the Storm Water Service district whose purpose is to solve flood problems. The County and OS owners felt differently;
  • Now 27 years of Coastland control of the Crown Point community is at an end!

It is BIG NEWS that Crown Point was successful without having to file a lawsuit!   This shows that this mechanism works. It will work for Ocean Sands North as well!   Your understanding of the issues and process, support during the two upcoming votes and completion of necessary documents in a few months are all that is required! We look forward to continuing our dialog with all owners and controlling our own future.

If you are aware of any fellow owners who have not furnished their email address(es) to the Home Owners of Ocean Sands, at admin@oshoa.org,
please encourage them to do so. It is critical that we have 100% engagement !
And, as always stay updated on our website, http://www.oshoa.org!

CROWN POINT DID IT. OCEAN SANDS IS NEXT!

Coastland Seeking a Dues Increase!

Coastland Seeking a Dues Increase!

Currently the members of the Ocean Sands Property Owners Association pay $380.00 annually.

This sum is invoiced by Coastland early in the first quarter and due for payment by March 30.  The dues were $350.00 per annum for several years until 2014.   Prior to the 2013 Annual Meeting, the owner members of the POA board agreed to a Coastland proposal for $30 increase, with the express proviso, however, that all additional monies generated by the increase would go directly into the “Reserve Fund for Storm Repairs”.  At the 2013 Annual Meeting, the membership ratified this proposal and the increase assessment commenced in 2014.  This fund is a type of capital maintenance reserve designed to cover significant damage sustained to the infrastructure (roads, walkways, cross overs) from a natural disaster such as hurricane, nor’easter, tornado, flooding etc.

Coastland is currently proposing a $100 increase in annual dues.  This represents a 26.4% increase.

Braxton Hill, VP of Coastland, began suggesting the need for a dues increase as early as August.  Since then Coastland has taken every opportunity when there is a request for service, information or meeting participation to point out the associated costs and the need for more money.  Basically, Coastland explains the need for a dues increase based on the following factors:

  1. Ocean Sands POA has one of the lowest annual dues among homeowner associations on the Outer Banks.
  2. The activities of the Stormwater Committee are putting a strain on the resources (time, staff, legal advice) of Coastland.  They charged the POA in 2015 and claim to need money for 2016 to respond to the actual requests of the Stormwater Committee, including attending monthly meetings.  We would note that a Coastland representative calls in to the meetings and is maybe on the phone for an hour.  Coastland has provided no information in response to numerous requests, so it does not appear they have spent any time collecting information for the Committee.
  3. Coastland has, yet again, sued Currituck County.  This litigation has associated costs and Coastland has postured a need to “protect” Ocean Sands owners from the consequences of its suit against the county by proposing hiring lawyers for the POA.  The POA has neither standing to participate nor exposure to any liability from this suit.
  4. Coastland’s proposed 2016 budget contains a 40% increase in total management expenses due to Coastland hiring Seaside Management (which has never been approved by the POA Board).
  5. Finally, Coastland informed POA Board as of 12/31/15 the Operating Account contains only $1,469.  Coastland feels that a shortage of funds to cover 2015 expenses against the 2015 budget would be resolved by increasing dues for 2016.

The owner representatives to the board, Al Marzetti and Rick Kinner are challenging this dues increase.  We feel the amount is too much and without rationale.  Having the lowest dues on the Outer Banks is not a sound basis for determining a dues increase. We are not categorically against a moderate dues increase for 2016, say $25-$40.  However, additional dues must be specifically allocated to the already established needs that owners have been discussing and requesting for years and not just used to pay more “allocated overhead” expenses of Coastland.

These would be:

  1. There have been continuous requests to have a formal independent reserve study completed, so we have a scientific basis for understanding future capital maintenance needs.         
  2. Adding more dollars to the existing storm repair reserve fund, which is clearly underfunded.
  3. Expenditures that prudently advance the solution for storm water flooding.
  4. Re-establishment of the drainage easements that should have been maintained (might help reduce flooding impact).
  5. Better quality road repair and maintenance.

Coastland Hires Property Manager – you had questions…

Fellow Owners,

We received a number of similar questions and comments after our recent communication regarding Seaside Management being hired by Coastland Corporation (“Coastland”). We thought it would be helpful to answer these questions for everyone.

  1. Is Seaside Management the same as Seaside Vacations?

No, Seaside Vacations is a vacation rental and property management company that bought Kitty Dunes a few years ago. Seaside Management is a professional manager of HOAs including Pine Island POA and Duck Landing POA.

  1. Did the Board of Directors of OSPOA hire Seaside Management?

No. Seaside was hired directly by Coastland, and no Board action was involved.

  1. How was Seaside Management selected? Was there an RFP, competitive bidding, or due diligence?

We do not know. No information was provided to the owner representatives on the Board. The owner representatives have requested a copy of the contract, but have not received it to date.

4. Who is paying for Seaside Management’s services?

Coastland has advised the owner representatives on the POA Board that OSPOA is expected to pay. The owner representatives have communicated to Coastland that they do not agree with this position. This was not a budgeted item, nor approved by the Board.

5. How much is Seaside Management going to cost?

The fee amount we are aware of is $2,833.33 a month, subject to change. That is $34,000 a year, or an additional two thirds of the $48,000 that OSPOA already pays Coastland, acting in its role as property manager. Coastland is not reducing its fee for property management services, so total property management costs will rise by 70%.

  1. Will my POA dues be increased?

Probably. This hire represents an additional cost of $34,000, or around $38 per household. Coastland stated that there would be a dues increase at a Board meeting in August, but did not indicate the amount of the increase. Your representatives strongly objected, stating that it was outside of the approved budget and no analysis was presented by Coastland that supported an increase. Shortly after the Board meeting, Coastland sent an e-mail notification of the Seaside Management hiring.

  1. Are there any limits on the Board of Directors for spending outside the budget approved at the latest Annual Meeting in 2015?

At that meeting, the owners passed a resolution limiting annual spending outside the budget to $5,000 without approval of the membership.

  1. Do the Bylaws for OSPOA specify who can hire a management company?

Yes, Article VIII of the Bylaws reads that the Board of Directors may hire a management company. This did not happen as there has been no Board action on this matter.

To sum up, we are dismayed that Coastland fails to respect the separate existence of the Ocean Sands Property Owners Association. We would like to think that the POA is more to Coastland than a bank account to collect dues & assessments, which Coastland then spends however it decides, in its sole discretion.  Seaside Management may well improve management of the physical plant – time will tell.  But we are disappointed in the process.  Ocean Sands property owners deserve better.

Sincerely,

Rick Kinner, Al Marzetti and the Governance Committee

Coastland Unilaterally Hires New Property Management. Read on…

Fellow Ocean Sands Owners,

Coastland Corporation informed the Owner representatives of the Ocean Sands and Crown Point POAs of some decisions they had made via email. Coastland has decided to bring in additional resources to help manage the POAs. Both sets of Owner representatives had many questions and concerns, as they were excluded from the decision-making process. Below, in Coastland’s exact words, are the three email statements announcing and explaining their decision. We would note that Coastland avoided answering questions from both sets of Owner Representatives regarding Coastland’s decision to take this action unilaterally.

On 9/2/15 Coastland sent the following:

In order to address certain governance concerns expressed at this year’s Property Owners meeting regarding the POA, Coastland is planning to retain a management company in the Outer Banks to consult with Coastland on POA issues and to become involved in certain property management and maintenance duties. Seaside Management will be our new partner in the administration of the POA.

Our hope is that Seaside will work hand in hand with Coastland and the POA to keep the property running smoothly as it continues to grow and more issues are raised, which has escalated recently. We plan to utilize Seaside’s experience and knowledge of Association Management in the Outer Banks to assist in community related issues.

Coastland will remain the Management Company of record and will continue to oversee the financial administration of the POA. Bob DeFazio will remain the President of the POA and the on-site Property Manager.

Coastland Corporation

1062 Laskin Road #12A

Virginia Beach, VA 23451

757-422-9111 Telephone

757-422-9113 Fax

On 9/23/15 Coastland sent the following:

Dear Rick and Al,

We hope you will welcome Seaside Management to Ocean Sands as an additional partner to provide services that will benefit our community. Seaside will have various duties which will be evolving as this partnership goes forward. These duties will complement Bob DeFazio’s and Coastland Corporation’s existing duties and will be determined based on the needs of the POA and the management company.

There are numerous community issues that require the time and attention of Coastland as the management company. In addition to the standard daily maintenance and management of the property, there are ongoing projects that need to be addressed regularly.

Coastland is also addressing, in advance, the long-term succession of management for Ocean Sands since this was brought up several times by homeowners and board members. Coastland has no plans to turn over any management functions at this time.

Seaside’s fee will be a separate budget item in the amount of $2,383.33 per month. Under the Seaside management agreement there is a 30 day cancellation notice and each quarter the contract will be revisited to determine the needs of the POA and the duties of Seaside.

Coastland Corporation

1062 Laskin Road #12A

Virginia Beach, VA 23451

On 10/9/15 Coastland sent the following:

Seaside Management has been hired to assist the POA’s, Bob and Coastland in the numerous duties and responsibilities that arise on a regular basis in the course of managing associations the size of Ocean Sands and Crown Point. With the increasing activities of the county concerning the wastewater renovation, the storm water plan, the additionally required water resources and treatment, and the greenway project, Coastland has found itself to be understaffed and Bob is a single person who is on-site and sometimes works around the clock to ensure that the communities run smoothly.

The hiring of Seaside is akin to adding staff to the offices of Coastland and Bob DeFazio. It was more efficient to go to a well-known Association Management company in order to procure appropriate assistance in the management of these communities.

The concern has been presented by homeowners that there was no back-up management plan should Coastland ever discontinue the management of Ocean Sands and Crown Point for any number of reasons. Seaside is now on board to become involved in the properties and their issues so that in the event Coastland ceases to manage the property a qualified company is in place to act on behalf of the POA’s.

Seaside is being paid directly by the POA’s just like all other vendors who are hired to do work for the Associations. Coastland does not pay any vendors of the POA’s directly. The Management fee for Coastland is a separate fee just like any other vendor.

Any further comments should be addressed directly to Bob DeFazio or Jeff Shields at Seaside.

From the Governance Committee:

The Governance Committee is pleased that Coastland is listening and reacting to the comments of owners. Naturally, we also welcome any additional resources that can be focused on our community.

We do have some questions regarding the process used to select Seaside and who pays for their services. Coastland picked Seaside, hiring them to assist Coastland. Because this action was taken without involvement of the POA Boards, we believe the the cost should come out of Coastland’s existing management fee, and not passed to the POAs, i.e. the owners. Overall this is a positive step for our community from an operational standpoint, although the bypassing of the POA Boards raises concerns from a governance standpoint.

Sincerely,

Al Marzetti & Rick Kinner

Latest Lawsuit filed by Coastland

Latest Lawsuit Filed by Coastland

You may have already received your letter from Coastland Corp. regarding its most recent litigation with the County, and how none of the homeowner board members from Ocean Sands or Crown Point would sign the form they wanted us to sign.  Simply, we believe that this ploy is another attempt by Coastland Corp. to get the POAs to help fund their litigation activities.  Both Ocean Sands and Crown Point informed them on numerous occasions that we did not agree with their plans to hire an attorney for the POA’s … but none of us were going to sign a document that Coastland foisted in front of us.  We would also note that Coastland discourteously e-mailed us this request at 5:30 p.m. on Christmas Eve.

In its letter, Coastland acts like it is being magnanimous by covering, at its own expense, the cost of objecting to the OSWSD inclusion in the lawsuit.  Well, Coastland was the party that instigated the lawsuit!  We can surmise that, if the POAs had hired lawyers, the cost of this upcoming hearing would have likely been charged to the POAs.  It is a certainty that the cost of Coastland’s mailing this letter to you – ostensibly to disparage your homeowner representatives – will be another significant cost that the POAs will be burdened with.

Also note that Coastland has created a new e-mail address that appears to be for the POA.  Your homeowner representatives do not have access to this e-mail, so it is really just another Coastland e-mail address.  However, if you agree with us that Coastland will be the sole party responsible should water rates go up, or object to the expense incurred associated with the mailing of this letter, feel free to provide that feedback to that e-mail address.

As always, you may contact your homeowner representatives (and the Governance Committee as a whole), at the following address: admin@OSHOA.org

  • Coastland sues Currituck County for monetary damages yet again on issues stemming from 1980’s vintage Settlement Agreement between the parties.
  • As the lawsuit involves the water & sewer assets, OSWSD may be brought into the litigation; a money judgement against OSWSD would trigger higher water & sewer bills.  OSWSD has independent counsel.
  • Coastland informs Ocean Sands and Crown Point POA’s that Coastland intends to hire an attorney for the POA’s.  Owner board members push back as POA’s don’t have a dog in this race and it is sensed that Coastland might use this as a way to push some of its legal expenses to the POA’s.

On June 17, 2015, Coastland filed another one of a long line of lawsuits against Currituck County and other communities in Corolla.  In brief, Coastland alleges that the County used water-related assets to provide “city water” to Corolla developments other than Ocean Sands in contravention of various Settlement Agreements between Coastland and the county and that this took away Coastland’s competitive advantage and resulted in the diminution in value of its remaining parcels in Ocean Sands.

A brief synopsis of the history follows.  In the 1970’s, Currituck County adopted the “Currituck Plan” which was hailed as a “model for future coastal development that includes respect for natural surroundings.”  This Plan contemplated centralized water and sewer service throughout the Currituck Outer Banks.  Coastland states that, while it agreed to comply with this Plan, the county did not force other developers to comply with it.  Coastland built a water treatment plant, wastewater treatment plant and associated underground piping to provide centralized water and sewer to Ocean Sands.  The water processed in the plant came from freshwater shallow-water wells.   Water that comes from deep-water wells is brackish and must be run through a reverse osmosis plant for “desalinization.”

As part of a 1987 Settlement Agreement between the parties, the County acquired the Ocean Sands’ water assets from Coastland and established a service district, Ocean Sands Water and Sewer District (OSWSD), to provide water and sewer service to Ocean Sands.  Under this Agreement, the County, through OSWSD, was obligated to obtain additional water capacity to the extent necessary to service Ocean Sands as it grew.

In 2002, the County formed SOBWS and acquired the assets of OSWSD, including $1.8 million in cash.  The water plant initially constructed by Coastland was demolished and a new, larger plant was constructed on the west side of Route 12 between the Currituck Club and TimBuck II.  This facility has both a conventional water treatment plant (used for Ocean Sands’ shallow water wells) and a reverse osmosis plant (used for SOBWS’ deep water wells).   In other words, there is one “line” in the plant that serves OSWSD and another “RO” line that serves customers outside of Ocean Sands & Crown Point. The 1987 Settlement Agreement was amended, with one of the new provisions that Coastland would not block an ocean outfall pipe.  An ocean outfall pipe is necessary to the reverse osmosis plant so that the saltwater can be flowed to the ocean.  

The ocean outfall pipe was laid through Ocean Sands (buried underground) and the RO line in the plant was completed in 2005.  In April, 2005, SOBWS commenced providing centrally-treated water to Ocean Hill, Whalehead, Corolla Village and Spindrift with water coming from the RO line.  This water comes from the reverse osmosis plant.  Ocean Sands water is provided primarily from the conventional water plant.  The parties disagree as to whether Ocean Sands water supply has ever been supplemented with reverse osmosis water.

Coastland has filed a claim for Inverse Condemnation, alleging that its natural resources – i.e., shallow-well water and the land on which the ocean outfall pipe was laid – were taken by the county without just compensation and that Coastland was also damaged by the resulting diminution in value of its Ocean Sands property.  Coastland’s complaint states that it never gave permission for the construction of the ocean outfall pipe.   Inverse Condemnation is a legal theory relating to taking of property by a governmental agency which so greatly damages the use of a parcel of real property that it is the equivalent of condemnation of the entire property.   Coastland had previously brought an Inverse Condemnation action against the county in 1984 claiming that the County’s land use regulations constituted a “taking” of Coastland’s property.  The U.S. Fourth Circuit Court of Appeals found that Coastland had not established the material facts necessary to establish that there was a taking of property without just compensation and dismissed Coastland’s motion for summary judgement.  This led to the 1987 Settlement Agreement.  As an editorial comment (solely the view of the author), it appears that anytime someone looks so much as sideways at any of Coastland’s property, Coastland claims that their property rights were infringed and so they must be compensated.

In the current suit, Coastland also alleges a breach of the 1987 Settlement Agreement in that the County agreed not to impair Coastland’s natural resources and that in laying the ocean outfall pipe and other actions the County breached this obligation.  The County believes that Coastland is incorrect in its reading of the 1987 Settlement Agreement.

The County’s Answer to the Complaint basically states that:

  1. Coastland’s allegation that Ocean Sands did not need the RO plant to supplement potable water requirements is incorrect;  
  2. Coastland’s interpretation of the 1987 Settlement Agreement is off base;
  3. Coastland’s allegations don’t satisfy the requirements for an Inverse Condemnation action;;
  4. Coastland failed to join a Necessary Party, the OSWSD, which owns and manages the assets which are the subject matter of Coastland’s claims; and
  5. Coastland’s action barred by the Statute of Limitations and other legal defenses all roughly noting that the facts have existed for 15 years and Coastland unreasonably delayed its suit.

Based on the various Settlement Agreements between the parties, arbitration is required before the case goes to trial.   We have heard that the selection of an arbitrator has been unduly delayed due to Coastland’s recalcitrance.  In addition, the county has filed a motion to join OSWSD into the lawsuit so that the matter can be settled with all parties involved for once and for all.  This motion will be heard at the end of January.

A note of particular relevance to Ocean Sands homeowners — Because there is the possibility of a money judgement against OSWSD Coastland sent an e-mail to the owner members of the Ocean Sands and Crown Point POAs which said Coastland believes the POAs need representation in this matter so Coastland was going to hire a lawyer to represent the POA’s and sit in on OSWSD Advisory Board meetings and conference calls, among other things.   This stemmed from the fact that the County Attorney had started joining regular OSWSD conference calls; however, the County Attorney was participating solely to instruct County employees participating the calls on matters of attorney-client privilege.  OSWSD has retained independent counsel.

Your owner members strenuously objected to this on the following grounds:  (1) POA’s will never be a party to this lawsuit and would have no standing to get involved; (2)  as such, while individual homeowners would suffer higher water rates should Coastland get a money judgement against OSWSD, the POA’s will never suffer a liability; and (3) Coastland’s announcement that it was going to hire counsel for the POAs appeared to be nothing more than a ruse to foist a portion of its litigation expenses on the POAs.   Separately, we have expressed the view that if Coastland does manage to extract a “pound of flesh” from OSWSD people won’t view the county as the “bad guy”; rather, homeowners will be looking at the party that extracted the money.  

News from the Ocean Sands Stormwater Committee!

Ocean Sands & Crown Point Stormwater Committee

visit us on Facebook at Corolla Stormwater

FINANCING ISSUES TO ADDRESS STORMWATER FLOODING

Background
The Storm Water Committee of Ocean Sands and Crown Point is evaluating the best resolution to the flooding situation in our community. There are aspects of the potential technical engineering solutions that need to be further investigated, validated and confirmed.  The Committee is also studying a number of issues in the administrative, legal and financial areas.

Of paramount importance is recognizing and understanding that our two communities have ongoing pervasive flooding problems, to which none of us is totally immune.  Even if your house hasn’t directly experienced flooding, perhaps your yard, your street or your immediate neighborhood has been flooded. This then harms your (or your renters’) ability to access the property.  The impact on property values, rental opportunities, and hassle of repeated cleanup and repairs and potentially your health is significant and costly.  There is also the standing and reputation of the community: when potential renters/visitors (or buyers) hear about ‘flooding in Ocean Sands’, they likely don’t know where it is and won’t bother to investigate further whether a particular property has flooding issues, but will simply look at another community in which to rent or buy.

Creation of a Special Service District
Regardless of the ultimate technical solution, there will be an associated cost for the needed improvements and consequently the need to figure out how to fund it. One way to fund the improvements is to create a Special Service District (more info below*) which gives the community the ability to pay for the studies, design, construction, and ongoing operation and maintenance of the chosen flood control solution.

What is a Special Service District? In brief, a special service tax district is created at the request of affected property owners and administered publicly by the County Commissioners sitting as the Board of the Service District, with guidance and input from an advisory board consisting of property owners. This is the same way the Ocean Sands Water & Sewer District operates.

How a Special Service District is Funded
Service district taxes are set annually at a rate by the service district board (on the recommendation of the advisory board) to fund the activities of the special district.  Rates are typically low in the early years when the engineering work takes place, increase during the construction phases and then decrease markedly when funds are only needed for operation and maintenance of the stormwater system.  The early years are sometimes used to build up capital to better level out rates during the construction period.  Service district taxes are fully tax deductible to the property owners.  This Service District (through County professionals) manages the long term operation and maintenance of the flood control system.  This approach was successfully utilized by our neighbors in Whalehead to fund and implement their stormwater system.  Whalehead’s system performed exceptionally well during the recent flooding events.

Moffatt &Nichol (M&N), the engineering firm that designed Whalehead’s system, did a preliminary feasibility study for Ocean Sands.  M&N also investigated potential funding streams from federal agencies but nearly all of them require costly detailed economic studies and benefit/cost analyses to receive funding.  As the project progresses, the issue of federal subsidies will be revisited.   NC Department of Transportation will also be approached for assistance with flooding problems on NC 12.

Information from the County tax office shows that the tax value of the study area (including Ocean Sands North, Coastland’s undeveloped Sections G & T, and Crown Point) is $499,323,104. Each $0.01 tax per $100 valuation would provide $49,810 per year in revenue.

The next phase of the project which includes data gathering and master plan completion is estimated to cost $220,000.  This work needs to be done before a solid cost projection for constructing a system can be developed.  Additionally, there is a near-term solution which could be put in place and used in an emergency to lower the lake and wastewater treatment system’s moats, at an estimated cost of $50,000.  Using the revenue assumptions above for these two projects would yield a stormwater district tax rate of $0.054/per hundred valuation.  On a property valued at $350,000 this would mean an additional $189 in taxes per year or roughly $0.50/day.

As noted above, rates would increase during the construction phase.  It is likely, however, that the construction of the system can be accomplished in phases, which would allow for system implementation over time. Whalehead subdivision followed this approach and has two loans that will sunset at various times. They began with a $0.02-0.03 assessment many years ago to begin studying the issue and are currently paying an assessment of $0.155 that will drop by $0.047 in 2019 and another $0.08 in 2023.

It should be recognized that there will be a $0.02-0.03 tax needed for operations and maintenance (County staff operation of system, pump replacements, system maintenance, etc.) in perpetuity for the Whalehead system. The same can be said for Ocean Sands if a similar system is chosen.  This is a cost of enhancing and maintaining property values and peace of mind.

Currituck County has experience with special districts such as the Ocean Sands Water and Sewer District (OSWSD) http://www.co.currituck.nc.us/Ocean-Sands-Water-Sewer-District.cfm as well as 5 existing stormwater service districts.

The county will create a Stormwater Service District for Ocean Sands and Crown Point when we are able to obtain support for the concept from our property owners.  Our goal is to demonstrate this by May of 2016.  This will allow for the tax component to be issued with the July tax bill; it would be listed as a separate line item like, e.g., OWSWD fees and trash collection fees.  .

All property owners within the boundaries of Ocean Sands North and Crown Point, including Coastland owned lots and undeveloped sections would share in the cost.

Other Options
We have prepared a spreadsheet comparing two different funding mechanisms:  POA special assessment vs. the Service District option.  Coastland is in favor of the private bank loan/POA special assessment funding mechanism, while the Ocean Sands Stormwater Committee and the four owner representatives on the two POA boards feel strongly that the Special District financing method is the option in the best interests of individual property owners.  You can view the spreadsheet here:  https://dl.dropboxusercontent.com/u/23058515/FINAL%20Service%20District%20vs.%20POA%20Assessments2.pdf


*OVERVIEW OF SPECIAL SERVICE DISTRICTS:
In 2008 there were 39,000 Special Purpose Districts in the US.  Currently there are nearly 300 in North Carolina.  So this is not something unique or different.  The reason for them is the reality of inadequate tax bases and competing demands for existing taxes which make it hard for cities and counties to provide all the services their citizens desire or need. When residents or landowners want new services or higher levels of existing services, they form a district to pay for them.

Service districts are allowed and defined under state law.  In North Carolina they are authorized by NCGS Chapter 130A; articles 2 or 12; Chapter 153A; Article 16; and Chapter 162A; articles 4 and 5.  In plain language, a special district is a separate local governmental entity that delivers a specific public service within defined boundaries.  Fire districts, drainage districts, sewage and waste water and pest abatement districts exist today because taxpayers are willing to pay for services they needed.

Special districts enjoy many of the same governing powers as municipalities and counties. They can enter into contracts, employ workers, and acquire real property through purchase or eminent domain.  Special districts have both corporate power and tax power.  The corporate power is the ability to “do things,” like constructing public works projects such as dams and sewers or “ground water leveling systems”.  The tax power is the authority to raise money to pay for these projects and services.  Raising funds is a primary objective of service districts and is accomplished by levying incremental tax or issuing bonds.


The Flooding & Stormwater Feasibility Study by Moffatt and Nichol is available here:
https://www.dropbox.com/s/jj7hit87knz84o6/20150615%20OCEAN%20SANDS%20FINAL%20REPORT.pdf?dl=0

OR

on the “Corolla Stormwater” closed Facebook page which you are invited to join.  The Fb page has other stormwater related information as well as our previous mailings to the community.


Ocean Sands & Crown Point Flooding Pictures are here:

ERNESTOhttps://www.dropbox.com/sh/bwo7tcs79uxj0hv/AAAwi0QiSu3xFZiBT-ePPrnea?dl=0

APRIL 2015https://www.dropbox.com/sh/jncpxc92ckzru51/AABDiOCAL-KqiP7dm8OCqnNta?dl=0

OCT. 2015 Nor’easter & Joaquinhttps://www.dropbox.com/sh/hvqpf0uq0q1qnam/AADVk-2YqFMoJC7RS0biRv8la?dl=0