Somerset Estates Homeowners Meeting

March20,2018

SOMERSETESTATESHOMEOWNERS:SIGN-INANDOBTAINBALLOTTHANKYOUFORATTENDING!

TheinformationinthispresentationwaspreparedbyEstateshomeownerswhopreviouslyservedonBoard-appointedcommittees(SeparationCommittee/Dues&DeclarationsCommittee)

MarcArnold,AnthonyChirikos,PaulaHemenwayandSusanReilly

Heights/Place (top) and Estates (bottom)

SEHOA89Homes

SHOA79HomesANewReality:

“SeparateandDistinctLegalEntities”

Meeting Objectives • Determinethenumberofdirectorstobeelectedtonightbythehomeowners(atleast3)

• ElectaninitialexecutiveboardforaSomersetEstatesHomeownersAssociationtoserveuntilthefirstannualmeeting,atwhichtimeanexecutiveboardwillbeelectedaccordingtothebylawsestablishedbytheassociation

WeanticipatethefirstannualmeetinginJanuary,2019

Future Meeting Discussions •  Therearenumerousquestionsandconcernsaboutourneighborhood.Afunctioningassociationandexecutiveboardisneededtoaddressthese.•  ThedecisiontomergewithSHOAcan’tbedecidedatthismeeting.•  Thenewboardcansetupfuturemeetingstoaddressindetail:

•  Proposaltoamenddeclarations,includingdues/budgetprocess• Waterrightsandirrigationsystem•  ProsandconsofmergingwithSHOA•  Howthepoolfitsintoallofthis(jointwithSSTCboard)•  Landscapingoptions•  Etc.

CCIOA 101 •  CCIOA=ColoradoCommonInterestOwnershipAct.LawthatgovernsCommonInterestCommunities(CIC).AllprovisionsapplytoCICsformedafterJuly1992;someapplyto“pre-existingcommunities”.•  CommonInterestCommunity(CIC)=Realestatedescribedinadeclarationsuchthatahomeownerisobligatedtopayforthecostsofotherrealestatedescribedinadeclaration(commonelements).•  Declaration=RecordedinstrumentsthatcreateaCommonInterestCommunity,includingamendments,platsandmaps.HighestlevelgoverningdocumentforaCIC,sometimescalled“Covenants”.•  HomeownersAssociation(HOA)=Aunitowners’associationorganizedtomanageaCIC,typicallyanonprofitcorporation.PerCCIOA,themembershipoftheassociationatalltimeshallconsistexclusivelyofallunitowners.

CCIOA 101, cont’d • CommonElement=Anyrealestatewithinaplannedcommunityownedorleasedbytheassociation,otherthanaunit.

• CommonElementsinSomersetEstatesarecalledOutlots.AssessedvalueofOutlots=$0.“Thevaluationofthecommonelementsshallbeassessedproportionatelytoeachunit…andthecommonelementsshallnotbeseparatelytaxedorassessed.”ExampleLegalDescription:OUTLOTKBLK5SOMERSETESTATESBLOCKS234&5VALUEDISTRIBUTEDPER38-33.3-105CRS

AssociationisresponsibleforthemaintenanceoftheOutlots,perDeclaration.

Brief History of Somerset Estates Date Action

1980s HillsideEstatesplanned–Plat,Declarations,HOA-votetomergewithCWHin1988.

9/89 Block1(Firethorn,Cattail,Bellflower)PlatwithlegaldescriptionofHillsideEstates

5/90 CottonwoodHills(CWH)HOAnamechangedtoSomersetHomeownersAssociation(SHOA).CWHismorecommonlyreferredtonowasSomersetHeightsandSomersetPlace(butisoneCIC).

6/92 1988mergerbetweenHillsideEstatesHOAandSHOArecordedwithSecretaryofState.

7/92 Blocks2-5(everythingelse,includingtheOutlots)PlatwithlegaldescriptionofSomersetEstates

12/92 Declaration(Covenants)recordedforSomersetEstates,withSHOAasthemanagingassociation.CoversBlock1andBlocks2-5.CWHhasseparatedeclaration.

2016 SHOABoardattemptstopassupdated,singledeclarationforbothCWHandEstates;votefails.BoardpetitionsDistrictCourttoimposedeclaration,perCCIOArules.

5/17 Petitiondeniedonbasisthat“SomersetEstatesandCottonwoodHillsneighborhoodshavenotbeenlegallymerged”andare“separateanddistinctlegalentities”.Assuch,acombinedvoteonasingledeclarationisinvalid.

Actions Taken after Court Order •  AtJuly2017annualmeeting,boardappointeda“SeparationCommittee”anda“DeclarationsCommittee”toinvestigateimplicationsofCourtOrderanddevelopplantotryagaintopassnewdeclarations.•  CommitteesmadeajointreportinDecember2017.Simpleanswer:

•  Wecan’tcontinuewithasingleHOAforseparateCICs.•  ThedefaultpositionisthatweareseparateandneedafunctioningassociationforEstates.•  Alegalmergerrequires“anagreementprepared,executed,recorded,andcertifiedbythepresidentoftheassociationofeachofthepreexistingcommoninterestcommunitiesfollowingapprovalbyownersofunitstowhichareallocatedthepercentageofvotesineachcommoninterestcommunityrequiredtoterminatethatcommoninterestcommunity”(CCIOA38-33.3-221)

•  Therefore,evenamergerfirstrequiresthatEstateshasitsownassociationandpresident.

•  SHOABoardretainedanattorneytoarriveatherownconclusion.TheBoardhasnotreleasedtheattorney’sreport;however,itappearsherfindingswereessentiallythesameastheCommittees’.SHOAsentalettertoallhomeowners,followedby“FAQs”.

Responsibilities of Executive Board •  Electofficers•  Retainanattorneyandfilearticlesofincorporation•  Establishfinancialsystems–banking,accounting,etc.•  Communicatewithhomeownersaboutassessments•  AdoptBylawsandRules&Regulations;reviewCCIOArequirementsforHOABoards•  Holdseriesofhomeowner/boardmeetings•  WorkwithSHOABoardonagreementstokeepneighborhoodfunctioning•  ProposeamendmentstoDeclarations•  AppointCommittees:

•  Declarations•  ArchitecturalControl•  Landscaping/water•  Social(maybewecoulddosomethingfun!)•  ??

•  OtherissuesthenewBoarddeemsimportantorthathomeownersaskittodo.

Nomination and Election of Executive Board •  Eachhomerepresentedherereceivedoneballot.Eachproxyholderreceivedaballotforeachproxy.•  Ballotslisthomeownerswho’veagreedtobenominatedtoserveontheInitialExecutiveBoarduntilthefirstannualmeeting,probablyJanuary2019.•  Agreementtosetnumberofdirectors(X)•  Nominationsfromthefloor(ballotwrite-in’s)•  Briefintroductionbyeachnominee•  VoteconductedbyplacingamarknexttoXnominees•  Adjournmentwhiletallyingtheballots:ToprankedXcandidateselected•  Runoff,ifneeded,forcandidateswithlessthan50%

Commitment •  PrimarygoaltoservethebestinterestsofSomersetEstateshomeownersbyprotectingandimprovingthevalueofourhomes,andimprovingourqualityoflifehere;

• Wewilltrytomaintaincontinuityofservicesandavoiddisruptionduringthetransitionperiod;

• Wewillworkwithoutpreconceptionstoperformarational,unbiasedandtransparentassessmentofthelegal,financialandpracticalimplicationsofavoteofthehomeownerstomergewithSHOAcomparedtooperatingasaseparateHOA(withcommercialagreementsbetweentheHOAs);

•  Inadditiontoformalminutes,wewillissuesupplementalupdates,conductmeetingsandinvitehomeownerstoattendworkshopstoremaininformed,participateandvoicetheirideas,suggestionsandconcerns;

•  ThedecisionregardingwhethertomergewithSHOAwillultimatelybelefttothehomeownersinaccordancewithvotingrequirementsforamerger;

• WewillmakeeveryefforttocollaboratewiththeSHOAboardtoarriveatamicable,timely,andmutuallybeneficialarrangements.

[Pause During the Vote Tally]

• Pleasevisitwww.SomersetEstates-HOA.comforupdates• Thispresentationwillbepostedonthewebsite• Anaddresshasbeenestablishedasfollows:

SomersetEstatesHomeownersAssociationPOBox621Niwot,CO80544

Conclusion • Homeownermeetingisadjourned• Newlyelectedboardmayconductaboardmeeting• AnEstateshomeownerworkshopeventmaybeannounced• Opendiscussion• Goodnightandthankyouforattending!