Buying Large Assets
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BUYING LARGE ASSETS

Authorizing Language. Although governing documents often require membership approval to purchase a large asset, that is not always the case. In some instances, governing documents authorize the board to acquire large amenities (such as a golf course). The authorizing language in the governing documents can be specific to a particular asset (such as a golf course) or generic.

Funding the Purchase. Even with authorizing language, the membership may need to vote on the funding. If the property can be purchased within the financial limitations imposed by the Davis-Stirling Act, membership approval is not required. If, however, a special assessment greater than 5% and/or a dues increase greater than 20% is needed, membership approval is required.

Borrowing Money. If the purchase requires a loan, governing documents might also require membership approval.

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