Living in LoCo
Possible Change to HOA Tax Status Rankles Residents
LoudounExtra.com staff at 2:46 p.m., November 25, 2008 (11 comments)
Living in LoCo correspondent Val Cavalheri writes about the South Riding neighborhood and has this dispatch for us.
A proposal to change South Riding's tax status in order to save the development money has caused some concern among residents. Many residents are worried about the consequences of such a change - namely, that the housing development would have to open up its private facilities to the general public - and some are worried that the whole process has taken place with little resident input.
A playground area in South Riding that could be opened up for public use (Photos by Val Cavalheri)
In September, the community's board of directors, on advice from its auditors, voted to pursue changing South Riding's tax status to 501(c)4, which would give the development additional tax exemptions.
Making this change would allow for the community association to receive approximately $200,000 in back taxes from the IRS, and the association would be relieved of its annual tax obligation on interest income, according to Wendy Taylor, the community's general manager. Taylor said the savings to the community last year alone would have amounted to $60,000 and that the board is looking at every possible way to control costs, especially in these difficult economic times.
But the savings may not be worth it for some homeowners.
"As a South Riding homeowner, I would be more inclined to pay the extra $20 per year to keep our community in the same status we currently hold," said Jen Duncan. "In my opinion, the risks are just too high in opening our community up."
Duncan and others are worried about what would happen if the swimming pools, tennis courts, paths and playgrounds become available to non-residents. Now, they claim, the "No Trespassing" signs allow residents to contact law enforcement if non-residents are loitering in these areas. Should common areas be opened to outsiders, everyone - technically - would have a right to be there.
"No Trespassing" signs in the community are directed at keeping non-residents from loitering.
Residents also wonder whether they will have to pay more in fees to cover increased insurance costs and upkeep of the areas if they are opened to non-residents.
"I for one, don't want to see all the HOA fees I pay every month go to support public use of my facilities," Duncan said.
But Taylor assured me in an interview that nothing would really change, except that the community would receive additional savings. Even now, Taylor said, they cannot control who uses some amenities, such as walking paths, since the community is not gated. She does not anticipate any additional costs in upkeep for the areas that would be made available to the public.
Adding to the concern is the perception by residents that the board has been considering this change for some time - without regularly informing and updating residents about it.
The HOA did post one or two items about the issue in the community's magazine, and there were lines in the recorded minutes from the board meetings indicating the board's consideration of a tax status change. But most residents I spoke to don't remember seeing those items. Once residents started to talk about the issue and ask questions, then in October, the HOA posted an FAQ with information on the community's Web site and included a larger item in the latest issue of the South Riding Magazine.
For several months before the HOA posted the FAQ online, one resident tried to get more information from the board by requesting a look at a legal opinion the board had commissioned and other written assessments by the board about the matter. He only received a copy of the legal opinion earlier this month.
The document, dated Oct. 20, 2008, reads: "the Board needs to assure itself that the South Riding community is willing to accept greater public access in connection with the tax savings that would accrue from obtaining tax exempt status."
Of the legal documents, Taylor said that information was originally not being made public due to attorney-client privilege.
"However, the board is transparent and we felt there was no reason for him not to have it," she said.
The documents, however, do not definitively answer the questions of whether the board has the authority to open trails and ponds to non-residents and how the community would deal with private lanes or the issue that the swimming pools are already overcrowded. Nor do they give any indication about how the board will gauge the willingness of the community to accept the change.
Kelly Whealan George and others feel that something this important should be brought to a community-wide vote.
"I'm amazed that they have decided this isn't worthy of a vote," George said, adding that she understands that technically board does not have to go to a vote for this kind of matter but that it should, in the spirit of the community.
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Stop whining as the South Riding board was elected by its residents and is not required to incur costs to have this voted on.
Posted by Jeff (anonymous) on November 26, 2008 at 7:59 a.m. (Suggest removal)
"As a South Riding homeowner, I would be more inclined to pay the extra $20 per year to keep our community in the same status we currently hold," said Jen Duncan. "In my opinion, the risks are just too high in opening our community up."
In other words, keep South Riding white, affluent and closed to "the other".
Posted by dingus3 (anonymous) on November 26, 2008 at 8:05 a.m. (Suggest removal)
My children attend school in South Riding and the majority of children in their classrooms are not white and affluent. South Riding residents are extremely diverse in nation of origin. South Riding may be a little less socio-economically diverse, but hundreds of South Riding housing units are in a program that allows lower income families of all backgrounds to purchase their first home. Each of these homeowners has the same voting rights as any other.
The issue under discussion is how the South Riding Proprietary should structure itself under the current tax code to serve the best interests its diverse membership. There are clearly different opinions among that membership on the best course of action.
Posted by charsj (anonymous) on November 26, 2008 at 10:07 a.m. (Suggest removal)
Amen, charsj.
I think the only two continents my kids haven't met someone from yet are Australia and Antarctica.
As with any government, it is up to the individual to follow along in any areas they're interested in.
Posted by BarbaraMunsey (anonymous) on November 26, 2008 at 10:23 a.m. (Suggest removal)
I live in a small community surrounded by South Riding. My son, who is white, is in a small minority in his elementary class. This is a very diverse community.
I do not understand why the pools would have to be opened to the public if South Riding makes these changes. Are people misunderstanding the range of changes they would face? Why do people think that crime would immediately come to the area if anyone could use the trails and play areas? If problems occur, the sheriff's office could handle the problems. Crime is crime, whether the perpetrators are committing that crime in their own neighborhood or going elsewhere.
I doubt that South Riding is going to go out and advertise and say, come to our neighborhood to play and exercise, now that our tax status has changed.
Obviously, I have no say in this because I am not a South Riding resident, per se. The community members and board should do what is best for their community. However, I do know that some South Riding residents use my neighborhood's common areas and play areas, even though we are seperate. As far as I know, the crime that has occured in our neighborhood hasn't come directly from that so I will not make any assumptions.
Posted by momof2 (anonymous) on November 26, 2008 at 11:02 a.m. (Suggest removal)
Not to be exclusive but is your community willing to help pay for the skateboard park or tennis courts?
Will the South Riding residents be able to pay a lower assessment if they don't want to use the facilties? Why should South Riding residents pay for all the facilities but everyone can use them? Houses in South Riding sell for a premium because of the ammenities.
Posted by SRLisa (anonymous) on November 26, 2008 at 11:51 a.m. (Suggest removal)
SRLisa,
If you are specifically speaking to me, I do not have an answer for you. I do not know if my community wants to pay for a skateboard park but I doubt they would decline because they expect South Riding to pick up the tab for the entire region. We have tennis courts and a pool of our own. I think you misunderstood me, though. I did not say people should be able to use your facilities. I did say, South Riding residents come into our neighborhood and use our facilities at times. We don't call the police just because their HOA is different. South Riding should do what is best for South Riding.
There is a flow of people who live around your community, though, and I'm not sure why it is a big deal if they happen to walk on one of your trails. Using the pools is a completely different subject. I suggest, though, that the large should not take advantage of the small, so if SR doesn't want non-SR folks on their trails and play areas, please show the same respect for the communities right next to your homes that are not included in your HOA or it's community-wide activities.
Posted by momof2 (anonymous) on November 26, 2008 at 2:31 p.m. (Suggest removal)
20 dollars a year? Try 2000.00 every six months to make it stay as is.
Posted by Funnyguyva (anonymous) on November 26, 2008 at 3:24 p.m. (Suggest removal)
For me (I am a SR homeowner) the issue is that once again the BOD has taken action without consulting the membership or taken much effort to communicate the planned action that has more than a trivial impact on the homeowners. South Riding homeowners pay fees every month with very little accounting for the use of the money. We are told we can "ask for" the the financial records, when these should be summarized and provided on a regular basis without being requested. They regularly make political statements on our behalf without polling the residents. The list goes on and on.
Fellow South Riding owners, when will we stop whining and start acting? Our bylaws were writting by the developer to suit Toll Brothers' interests. It's time we re-wrote them to reflect our own need for input and information.
Posted by AngelaB44 (anonymous) on December 16, 2008 at 3:52 p.m. (Suggest removal)
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