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Maine Alliance for Road Associations

Use of road dues for non road purposes

  • 22 Mar 2022 10:41 AM
    Quote
    Message # 12676178
    Anonymous member

    Our Board believes if the membership votes to spend collected dues for road maintenance on non road items like a picnic table or lawyer fees, it is legal.  We have a reserve fund and regular, but nothing in by-laws that says road money can be used for whatever the association votes to use it for.  The by-laws do not mention the reserve fund.  Should they? Thanks for weighing in.
  • 23 Mar 2022 11:46 AM
    Quote
    Reply # 12677821 on 12676178
    Anonymous member (Administrator)

    Is your road association set up as a "statutory" road association under 23 MRS 3101-3106, or is it set up as a non-profit?  If it's a non-profit, I would guess your bylaws would have to specify what the dues can be used for.  But if it's a statutory road association, expenditures are controlled by 23 MRS 3101, subsection 5, which says,   

    "By a majority vote of the owners present and voting in person or by written proxy or absentee ballot, the owners may determine what repairs and maintenance are necessary and the materials to be furnished or amount of money to be paid by each owner for repairs and maintenance and may determine the amount of money to be paid by each owner for other costs, including, but not limited to, the cost of liability insurance for the officers, directors and owners and costs of administration."

    You can read the full test of the law here:  https://legislature.maine.gov/legis/statutes/23/title23sec3101.html  and if you click on the arrow at the top right hand corner of that page you can scroll through section 3102 - 3106.  (Section 3101 subsection 1B defines what is included in "repairs and maintenance.")

    I would think that an attorney might be considered a "cost of administration," but I don't see where a picnic table would fit in.   My recommendation would be to have a separate fund which people can contribute to on a voluntary basis, if they want to help with the purchase of non-road association items such as a picnic table.

    I'd be interested to hear how other road associations have handled this.
  • 24 Mar 2022 5:00 AM
    Quote
    Reply # 12678922 on 12676178
    Anonymous member (Administrator)

    We are a statutory road association. We needed an attorney to help us defend our shore ROW from use to launch a huge ship. Our attorney, John Cunningham, said we could not assess our membership for these fees by  Statute but could accept volunteer contributions. Members, with one exception, paid willingly.  

    Last modified: 25 Mar 2022 9:56 AM | Anonymous member (Administrator)
  • 25 Mar 2022 10:01 AM
    Quote
    Reply # 12680529 on 12676178
    Anonymous member (Administrator)

    Good point!  I was thinking of attorney fees for handling ordinary road association administrative matters, such as perhaps following up on a Notice of Claim or handling a claim for unpaid dues in small claims court.  But if it's a matter that's going to incur substantial attorney fees, I agree that it would most likely require a separate voluntary fund outside of the compulsory dues.  I'm glad you have an attorney's view on that. 
  • 26 Mar 2022 5:26 PM
    Quote
    Reply # 12682179 on 12677821
    Anonymous member
    Anonymous wrote:

    Is your road association set up as a "statutory" road association under 23 MRS 3101-3106, or is it set up as a non-profit?  If it's a non-profit, I would guess your bylaws would have to specify what the dues can be used for.  But if it's a statutory road association, expenditures are controlled by 23 MRS 3101, subsection 5, which says,   

    "By a majority vote of the owners present and voting in person or by written proxy or absentee ballot, the owners may determine what repairs and maintenance are necessary and the materials to be furnished or amount of money to be paid by each owner for repairs and maintenance and may determine the amount of money to be paid by each owner for other costs, including, but not limited to, the cost of liability insurance for the officers, directors and owners and costs of administration."

    You can read the full test of the law here:  https://legislature.maine.gov/legis/statutes/23/title23sec3101.html  and if you click on the arrow at the top right hand corner of that page you can scroll through section 3102 - 3106.  (Section 3101 subsection 1B defines what is included in "repairs and maintenance.")

    I would think that an attorney might be considered a "cost of administration," but I don't see where a picnic table would fit in.   My recommendation would be to have a separate fund which people can contribute to on a voluntary basis, if they want to help with the purchase of non-road association items such as a picnic table.

    I'd be interested to hear how other road associations have handled this.

    We are a simply a domestic non profit road association.  Will have to research statutory to see if that is something we should consider.  Thank you.

                            The Maine Alliance for Road Associations


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