This is the fifth is a series on the Selling of a Country Club. It documents how errors by an HOA Board can diminish its credibility and impose costs on its members.
There is no doubt serving on an HOA Board is a difficult job. Board members can become defensive when they believe, often with good reason, they are being criticized unjustly. In some cases, Board members realize it is easier to manage without transparency. If members do not know what to complain about, criticism will be is diminished. An example of this is how the issue of the property tax exemption for the Club was handled. As detailed below, the Board’s actions can only be explained by its hubris.
The Master Association Board published a sales brochure, Better Together, that asserted if the HOA bought the Club, the Club would be exempt from $241,000 in yearly property taxes. As a former adjunct professor of State and Local Government at UCLA, this struck me as too good to be true and probably false. To validate the tax-exempt assumption, the President of the Master Association was asked if the assertion of the exemption had been corroborated by the Assessor or by the tax treatment of similarly situated HOA owned clubs. In an email
The President was then asked
Riverside County Assessor (email dated 4/28/2021) was asked the following question:
Supervising Appraiser, Total Property & Exemptions in the Office of the County Assessor-County Clerk-Recorder (email dated 5/3/2021):
In response to your general question…, the property tax does not disappear, the property is still taxable to the HOA.
Better Together brochure was misleading primarily by omitting key facts. Missing was 1) any mention of the $300,000 the
HOA would lose with the departure of the previous owner, 2) any mention of
capital replacement costs for the golf courses, 3) the loss of cart parking at
the Cantina, and 4) the loss of golf dues from 68 Premier members.
The Tax Collector wrote (email dated 10/12/2022) “The Master Association paid the prior year 2021/2022 taxes on 8/31/2022.” Previously, t