Why is it necessary to form a homeowners association?

The Declarant for the Surprise Farms Community Association, Surprise Village Company L.L.C., has planned certain Common Areas and recreational amenities within the community seeking to enhance property values for its residents.  Maricopa County requires that an entity be formed which will own and maintain these Common Areas in perpetuity.  The Declarant desires to carefully establish and to give the authority in the future to control architectural integrity.  To meet these requirements, the Declarant has formed a homeowners association, incorporated as a non-profit Arizona corporation and has formulated deed restrictions (CC&Rs) and Bylaws which serve as a guide to its formation and operation.

Is membership optional?

No.  The Declarant records with the Maricopa County Recorder a Declaration of Covenants, Conditions, Restrictions, Reservations and Easements known as CC&Rs.  These documents stipulate that all Owners of land within the community automatically become Members and are subject to the CC&Rs.  An Assessment amount is determined through the budgeting process and becomes an obligation of each Member.  Assessment revenue finances the operation and reserve funding of the Association including, but not limited to, landscape maintenance, insurance, management, architectural control and violation enforcement.  The CC&Rs create a continuing lien for the Assessment obligation.

Who is in charge of the Association?

The Association is controlled by an elected Board of Directors.  There are two classes of voting memberships.  The Declarant, as well as the Builders, are Class B Members and are given three votes for every Membership they hold.  All other Owners are considered Class A Members and are entitled to one vote for each Membership.  The CC&Rs set forth determination of memberships.  Voting is weighted in favor of the Declarant and Builders during the development period in order to allow the Declarant to implement its original vision before it turns control of the Association over to the homeowners.  That �transition of control� commences when 75% of the Lots in the Surprise Farms Community Association are sold from the Builders to individual Members.

Does the Association control what I can do to my individual Lot?

The CC&Rs allow for the establishment of a Design Review Committee whose purpose includes creating, protecting and preserving the architectural integrity of the community.  It approves the original building plans for all residential and commercial structures.  Beyond that, the Committee must review and approve all proposed changes to any Lot that are Visible From Neighboring Property.  This is accomplished through the architectural application process, whereby an Owner requests approval in advance for any changes he or she desires to make to his property.  All Owners are bound by the decisions of the Committee, which is empowered to ensure that the architectural integrity of the master plan remains intact.  The CC&Rs also address such restrictions as trash container storage, overnight parking, recreational vehicles, trailers, boats, unkempt yards and business use of residential areas.  The Association is given the power of enforcement through the CC&Rs, including legal action whenever necessary to remedy infractions.  Through the architectural control process, as implemented by the Design Review Committee, property values should remain high and the community remains aesthetically pleasing.

How can I be sure that my Assessment will not keep going up?

The CC&Rs detail specific procedures to control the Annual Assessment from year to year.  Originally, the Declarant sets a maximum Annual Assessment determined by a built out budget as though all amenities and all Memberships were in place.  The Assessment may be set at any rate not to exceed the maximum.  Each year thereafter, the Maximum Annual Assessment may be increased by the Board of Directors by 10% or the cost of living increase as determined by the Consumer Price Index, whichever is greater, without a vote of the Membership.  Any increase beyond that requires a positive vote of two-thirds of any class of members.

Do homeowners have a voice during the period of Developer control?

The Association is required to hold an Annual Meeting of the Members each year for the purpose of providing general information about the Association, presenting a financial report and holding elections for available Board positions (when applicable).  This is an ideal time for homeowners to voice their concerns and ask questions.  However, it is not necessary to wait for meetings.  The Board of Directors employs a professional Managing Agent for the purpose of administering the daily affairs of the Association. The manager will visit the community frequently and will be available by telephone or email for any Association related questions or problems.  The management company will act as a liaison between the Board of Directors and the Members, collect Assessments, pay bills, oversee landscape and amenity maintenance, correspond and communicate with Members, and regularly tour the community.  Even though the Declarant�s voting power assures it control of the Board of Directors up until at least 75% of the lots are sold to individual Owners or entities, it is constantly preparing for the turnover of the Association to homeowner control.

For more information or additional questions, please contact Bill Collier with Kinney Management Services at (480) 820-3451 ext. 241, or by email at: Bill@KinneyManagement.com.