Frequently Asked Questions
Why is the Dixie Springs ACC a corporation?
Is the Dixie Springs ACC an HOA?
Are there funds missing from the ACC account?
Can the City of Hurricane enforce the Dixie Springs CC&Rs?
Why were the Dixie Springs ACC Corporation by-laws changed?
Did the Declarant need to provide a document when he relinquished control of Dixie Springs?
Answers
Why is the Dixie Springs ACC a corporation?
As Dixie Springs grew at a rapid rate, the board at the time wanted to minimize any personal liability they might incur by being on the board. The only way to do that was to create a nonprofit corporation. The ACC members are the only members of the nonprofit corporation: not all of the lot owners in Dixie Springs. The Utah nonprofit act talks about the indemnification of officers and directors. An individual's liability on the board of a non-profit is limited. The corporation, not its members, is the entity responsible for debts. Also, the corporation, not the individual ACC members, has the right to sue and to be sued, to hold property, and to enter into transactions.
Is the Dixie Springs ACC an HOA?
The ACC is not an HOA because it doesn’t meet the definition of an “association” under the Utah Community Association Act. The Act applies to all HOAs in Utah, but it doesn’t apply to legal entities that don’t meet the definition of an “association.”
The Act defines an “association” as a legal entity in which its members, simply by virtue of owning a residential lot, are obligated to pay the association at least one of the following as assessments (dues): (1) real property taxes, (2) insurance premiums, (3) maintenance costs, or (4) improvement of real property not owned by the member such as common areas. Utah Code § 57-8a-102(2)(a).
The way an owner of a residential lot becomes a member of an association, and as such obligated to pay assessments, is by CC&Rs that are recorded with the county recorder. If the CC&Rs say the owners in the subdivision are obligated to pay assessments to a legal entity (e.g. an HOA), then the legal entity and the property within the subdivision are governed by the Community Association Act. Typically, the way an HOA comes about is through a developer who wants to develop its property into a residential subdivision. The developer records CC&Rs against the property before any of the property is sold as separate lots. Those CC&Rs would state that all the lots are subject to the governance of an HOA and must pay the HOA monthly assessments. The Dixie Springs CC&Rs don’t say anything about an HOA and do not require owners in Dixie Springs to pay any assessments to a legal entity. If the CC&Rs required owners to pay assessments to the ACC, things would be different, but they don’t.
Are there funds missing from the ACC account?
No, there are no missing funds and there have never been any missing funds.
The current ACC board has spent many months looking into a discrepancy between the ending balance in the 2017 taxes,
and the beginning balance of the 2018 taxes. The accountant that was hired to do the 2017 taxes made an incorrect
entry on 1/1/2018. The board that started June of 2018 made sure that everything balanced with the checkbook but
were not aware of that entry. The ACC board that served from June 2018 to June 2020 used a different accountant
for the 2018 and 2019 taxes and he did not notice the discrepancy until the current board brought the documentation
to him. This accountant corrected the taxes as needed and the letter from the accountant can be seen at this link:
Reason for Tax Change
Can the City of Hurricane enforce the Dixie Springs CC&Rs?
No. The City of Hurricane will not and cannot legally enforce any CC&Rs on any community in Hurricane. The City of Hurricane does not even enforce their own ordinances consistently. The residents of Dixie Springs will only be able to enforce the CC&Rs through a lawsuit against a neighbor. The advantage of having the ACC enforce the CC&Rs is they have the ability to assess fines. Also, most residents do not want to have to sue their neighbors and would rather have the ACC handle the issue. Eliminating the CC&Rs also stops any review of homes to the CC&Rs. For example, a builder could build a 900 ft2 house. The City of Hurricane would allow it. A lawsuit from a community member to a builder would be required, and by the time that was resolved, the house would long be built, and the only remedy would be to tear it down.
By eliminating the ACC, you are essentially getting rid of the CC&Rs because they are practically unenforceable without the ACC. It is highly unlikely that someone will spend the time and money to sue a neighbor over CC&R violations. Therefore, signing the petition to change the CC&Rs makes the CC&Rs ineffective.
Does the ACC use drones?
No. The ACC does not nor has ever owned a drone or used a drone in its duties.
Why were the Dixie Springs ACC Corporation by-laws changed?
The ACC’s Bylaws were originally adopted in 2016. They were written to make each lot owner in Dixie Springs subject to the Bylaws, and they treated lot owners as the membership of the ACC (though not as members of the ACC’s Board of Directors). However, in order to be a member of a nonprofit corporation, and therefore governed by its bylaws, you must give your consent. No one in Dixie Springs consented to be part of the membership of the ACC in 2016.
Consequently, the 2016 Bylaws needed to be modified to reflect that the ACC has no membership. The Board
adopted new, amended Bylaws, which it was allowed to do under the 2016 Bylaws. The new Bylaws haven’t changed the
fact that lot owners will vote for members of the Board, but the timing of the voting process is different.
The ACC cannot afford to have elections every two years, and no Board should be completely replaced at every election.
Therefore, elections will be held every three years and no more than half the Board will be replaced at each election.
You can see the updated bylaws at this link:
ACC Bylaws
Did the Declarant need to provide a document when he relinquished control of Dixie Springs?
Under the CC&Rs (in particular, the amendment recorded in May 2010), the Declarant had the right to “appoint members to the architectural control committee.” But once the Declarant sold 90% of the lots in Dixie Springs, it lost the right. At that point, the CC&Rs automatically gave the Owners the right to “elect and appoint members of the Architectural Control Committee.” Consequently, there was never any need for the Declarant to transfer its right to choose the ACC because it lost that right and the CC&Rs transferred the right to the Owners. So naturally there would be no document recorded with the county recorder transferring the right. There was no need for it. While it is true that the CC&Rs do not explicitly refer to the DSACC, Inc., the CC&Rs do not prevent the members of the ACC from forming DSACC, Inc., or conducting ACC business as the DSACC, Inc. For the same reasons, there was never any reason for the Declarant and the DSACC, Inc., to merge into one entity (assuming that was legally possible when the Declarant was a for-profit corporation and the DSACC, Inc., is a nonprofit corporation).