[WSBARP] HOA Gurus - New Off-site Water

Wed May 9 16:33:56 PDT 2018

Rob, thank you for your ideas.  Good stuff.

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Rob Wilson-Hoss
Sent: Tuesday, May 8, 2018 4:25 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] HOA Gurus - New Off-site Water

Paul, I am not answering your question, I know, but if you look at the UTC water regs, a HOA is exempt if it does not provide water to non-members, generally. Exemption from the regs is a very good thing. So, there is that. If you provide to nonmembers then you risk state regulation about all sorts of things having to do with water supply. So that may be precisely why the governing documents read the way they do - the HOA can buy water from outside sources, but not supply water to nonmembers. But if the HOA just buys water from an outside source, it isn't selling water or providing water to that source, it is taking water from that source, so that may be a better route.

Rob

Robert D. Wilson-Hoss
Hoss & Wilson-Hoss, LLP
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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Tuesday, May 08, 2018 3:53 PM
To: wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] HOA Gurus - New Off-site Water

Looking for creative solutions in an attempt to avoid having to go to HOA annual meeting and amend the Articles and Bylaws.  Large (200+) HOA needs more water capacity and wants to go to neighboring properties owners and ask for permission to either tap into their existing well(s) or permission to dig a new well(s).  As part of the compensation to these offsite owners, HOA would like to offer free water from the well site BUT...  The HOA is from the 1960's and the governing documents are very thin.

1.         Articles say, in part, "the purposes for which this corporation is organized are as follows: ...To own, operate and maintain a water supply system for its members, in compliance with health and environmental regulations of state and local government agencies, either drawing from wells owned by the corporation or from outside water sources, or both.  The corporation shall not use or dispose of such water as a public utility but solely for the use it its members."

2.         And, the Bylaws state:  "The membership of the corporation shall consist of all owners of lots within the Plat."

So, on first reading, it appears that the HOA can provide water only to "members" and the neighboring property owners are not within the defined Plat so they aren't members.   Does this mean the HOA can't offer free water to the neighboring property owners who may be granting the HOA permission to sink a well?

The HOA is saying that it wants to amend its Bylaws to include the neighbor's property (which, could be a 1/4 mile down the road and NOT contiguous) so that the new property comes under the definition of being a "member."  This does not sit well with me.  I doubt the neighbors would want to be subject to CC&Rs for a development that is down the road.  I imagine that the owner would argue that they have all of the burdens of the CC&Rs but none of the benefits.  While I guess the HOA could extend use of the HOA's swimming pool to the new member, it doesn't pass the smell test to have a second class of member.  Everybody in the Plat versus the one guy with the well on his property who gets free use of everything but the restrictions (such as tall weeds) doesn't apply to him.

OK, I am probably over-thinking this.  Is it getting too cute to characterize the provision of water to the neighbor as a water easement payment rather than as water from the system?   Any thoughts to add to this tumble of thoughts?  (BTW, the HOA is hiring other experts to properly guide the HOA through the water permitting process so that its not my question here)

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