Lake of the Woods Association

Governing Authority

Lake of the Woods Association (LOWA) governing is regulated by the Code of Virginia and our own governing documents.  There is similarity between governing in towns and homeowners associations. The Code has a whole Title of over a thousand pages on the governing of towns, counties and cities. The Property Owners Association Act (POAA) is just one chapter in the Title of Property and Conveyances.  Much of the POAA deals with real estate issues since this act was created to deal with the creation of housing developments.  Over the years the POAA has taken on more of local governing issues such as open records, restrictions on closed board meetings and flag displays.  The Virginia Code also has a chapter on Non-Stock Corporations which also affects the governing of the association.  LOWA governing documents include the Articles of Incorporation and stemming from these Articles are the Bylaws that describe the procedures for governing. The Bylaws address voting, meetings, directors and financial management.  The Bylaws can be changed by the Board of Directors under a procedure defined in the Bylaws which include a publishing in advance and providing for member input.  The other major governing document is the Covenants.  The Covenants address rights and responsibilities attached to the land such as use of the land, building requirements and limitations, drainage easements, member use of roads, common areas and amenities, paying for operations, the Environmental Control Committee and a number of other requirements.  Because the Covenants represent a member’s property rights, changing the Covenants requires a majority of property owners.  The Regulations stem from the authority of the Covenants and cover a wide array of activities and behaviors in LOW.  They are modified on a fairly routine basis to address changing conditions and issues.  The Regulations, similar to the Bylaws, can be changed by the Board of Directors under a procedure defined in the Regulations which include a publishing in advance and providing for member input.

Board of Directors

The Board of Directors is the legislative body that governs LOWA.  They approve Bylaws and Regulation changes, enact budgets, establish financial policies, approve new projects, hire the General Manager and a number of other responsibilities outlined in the Bylaws.  The seven directors are elected for three year staggered terms under procedures in the Bylaws.  The election of directors is the most important factor in how LOWA is governed and how the community looks and feels.  With the power of the budget, they determine how the community and its amenities are maintained and improved.  Budgets also affect the financial health of LOWA.  Their approval of regulations has a significant impact on what individual behavior is allowed.  They should be evaluating current amenities to ensure that they are properly maintained, looking to the future to ensure that upcoming issues are addressed, and working to create a harmonious atmosphere in the community.

Committees

There are 21 committees assisting in the governing of LOWA.  Some committees directly support individual amenities such as golf and clubhouse, while others deal with broader issues such as planning and finance.  The committees are able to go into much more detail on their issues and take advantage of the considerable experiences of individual members in areas of committee responsibility.  They are also responsible for bringing up any needs, both current and future to the Board of Directors.

Finance

Each year, the Board of Directors must approve an annual budget.  The budget funds normal operation and maintenance of the association including all of the administration, facilities, roads, lakes, security, etc.  The budget also funds the amenities such as clubhouse, golf, pools, fitness center, tennis and equestrian center.  The General Manager and his department heads prepare the budget.  The proposed budget is reviewed by the Finance Committee which provide recommendations to the Board of Directors.  For each amenity there is an estimate of the revenue that the amenity will generate.  The pricing of each amenity takes into consideration the accessibility to LOWA members and enhancing overall amenity revenue.  Generally the amenity revenues do not cover all of the cost of amenity operation and each amenity is subsidized from assessments. Funding for capital items is done in two ways.  For existing capital items, the budget sets aside reserves as described below.  The budget also include funding for new capital projects to meet new needs and keep LOW an attractive place to live.  The budget finally sets the amount for the annual assessment that each member must pay.

Reserves

You may have noticed in the Disclosure Package you received when you purchased your home that the balance sheet for LOWA included funds identified as reserves.  These reserves are an indicator of the financial health of LOWA.  Our major capital items such as buildings, roads, vehicles and equipment will eventually wear out and require replacement or significant refurbishment.  To meet the cost of the replacement or refurbishment, LOWA starts setting aside funds when these items are procured, the amount being based on a reasonable expected for these items.  When the capital items eventually require replacement or refurbishing, the funds are available from reserves and it would not be necessary to enact a special assessment to pay for them.  Although most LOW members may not follow the status of reserves, the financial institutions that make home loans pay close attention to reserves.  Their concern is that in evaluating a prospective home buyers ability to meet mortgage payments, they consider whether such a buyer might be hit with a big special assessment or large increase in annual assessments for replacements that have not been adequately funded.  LOWA responsibly budgets for providing the contributions to reserves and continues to maintain healthy finances.

Members

The processes for governing LOWA are open to all members.  Except for statutorily allowed closed meetings on specific subjects, all meetings of the Board of Directors and all committees are open to LOWA members.  Members are given opportunities to provide their inputs on issues coming before the association.  Members also have the opportunity to serve on committees and run for office as a member of the Board of Directors.