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[07] Graceview Estates Homeowners Association, Roger Neils
f CM' oe ST. JUSEPH Council Agenda Item 7 MEETING DATE: October 7, 2010 AGENDA ITEM: Graceview Estates Homeowners Association, Roger Neils SUBMITTED BY: Judy Weyrens, Randy Sabart, Tom Jovanovich, Terry Thene BOARD /COMMISSION /COMMITTEE RECOMMENDATION: The Planning Commission in 2002 considered and recommended approval of the preliminary plat that is known as Graceview Estates. The preliminary plat included private streets and private ownership of ponds. PREVIOUS COUNCIL ACTION: In 2002 the City Council approved a preliminary plat entitled Graceview Estates. The development was presented as a coved housing development with mixed housing. The development included a mix of public and private streets and the utility improvements were constructed by the developer with the City providing construction observation. Since the Development consisted of a large tract of land, the development was constructed in phases. The approved preliminary plan served as the master plan for the area and final plats were approved in phases. Each phase of Graceview required a separate Development Agreement. In 2005 the City annexed property on 7 Avenue NE extending utilities and reconstructing the street. Since the property in the Graceview Estates Homeowners Association (GEHA) abuts 7 Avenue, the property was assessed for street. BACKGROUND INFORMATION: GEHA retained Roger Neils to review issues relative to the common elements of the property patted in the GEHA name, specifically lot 88 Block 3 Graceview Estates. The staff stated above has reviewed the issues raised by the GEHA and the attached pages provide additional background along with challenges if the City assumed ownership of the private infrastructure. ATTACHMENTS: Request for Council Action 7:1 -7:2 Memo, Tom Jovanovich 7:3 -7:6 Staff Summary of Infrastructure Issues 7:7 -7:9 Ordinance extract at time of approval 7:10 Map illustrating concerns 7:11 Letter from GEHA Attorney* 7:12 -7:40 *This is the same information that as previously sent to all Council Members directly from Roger Neils. REQUESTED COUNCIL ACTION: Discussion on the request submitted by Roger Neils, providing direction to staff. THIS PAGE INTENTIONALLY LEFT BLANK MEMO TO: Judy Weyrens FROM: Thomas Jovanovich RE: Graceview Estates Assessments OUR FILE NO.: 00224/29233 DATE: October 4, 2010 Issue: Whether the City is legally required to reassess that portion of the 2005 Cloverdale Area Improvements specially assessed against Lot 88, Block 3, Graceview Estates to redistribute the assessments to the individual units in Graceview Estates. Short Answer: No. Facts: In February of 2005, the City adopted a final assessment for the 2005 Cloverdale Area Improvements. The City specially assessed Lot 88, Block 3, Graceview Estates in the amount of $20,200.74. Graceview Estates is a Common Interest Community. Lot 88 constitutes a common element within Graceview Estates and at all times relevant to this issue was and is owned by the Graceview Estates Home Owners Association (GEHA). The individual units in Graceview were not assessed for the 2005 Improvements. Lot 88 is adjacent to the improvement project. GEHA does not dispute that the City complied with the Chapter 429 special assessment procedures in adopting the assessment. Nor does GEHA dispute the amount of the special assessment. Rather GEHA contends that the assessment of Lot 88 is in violations of Minn.Stat. §515B.1- 105(b)(2). The statute provides as follows: (2) If there is any unit owner other than a declarant, each unit shall be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements. It is undisputed that the deed for the sale of the first unit was recorded on November 5, 2003, prior to the special assessment. GEHA contends that the special assessment against Lot 88 was done by agreement with Rick Heid, on behalf of Pond View Ridge, LLP, who was the declarant, developer and owner of the majority of units in Graceview Estates at the time of the special assessment. As owner of the majority of units, Pond View Ridge, LLP would have had a controlling interest in GEHA at the time of the assessment. Analysis: A. The assessment against Lot 88 does not violate the plain meaning of Minn.Stat. §515B.1- 105(b). Minnesota Statutes Chapter 515B became effective June 1, 1994, and is applicable to all common interest communities established after that date. The statutes governing common interest communities prior to the adoption of 515B did not include a similar prohibition against taxation or assessment of common elements. There has been no case law construing Section 515B.1- 105(b)(2). Under the basic canons of statutory construction, we are to construe words and phrases according to rules of grammar and according to their most natural and obvious usage unless it would be inconsistent with the manifest intent of the legislature. Minn.Stat. §645.08(1) (2004); see Homart Dev. Co. v. County of Hennepin, 538 N.W.2d 907, 911 (Minn.1995). "[W]henever possible, no word, phrase, or sentence should be deemed superfluous, void, or insignificant." ILHC of Eagan, LLC v. County of Dakota, 693 N.W.2d 412, 419 (Minn. 2005) citing Owens v. Federated Mut. Implement & Hardware Ins. Co., 328 N.W.2d 162, 164 (Minn.1983); Minn.Stat. §645.16. Minn.Stat. §645.16 provides: "[t]he object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature. Every law shall be construed, if possible, to give effect to ALL its provisions..." Emphasis added. GEHA contends that Section 515B.1- 105(b)(2) should be read as an if /then sentence. If a unit is owned by someone other than declarant, then no separate assessment may be rendered against the common elements. This reading ignores the fact that there are three parts to the statute, which must be considered together. The inclusion of the second phrase imposes a second condition that must be present before the common elements cannot be separately assessed, i.e., the requirement that the individual units be taxed. This plain reading of the statute is in accordance with the legislative history cited by GEHA, i.e., that the intent of the statute is to avoid double taxation. In the present case, as no separate assessment has been rendered against the units, the assessment against the common elements does not violate the statute. B. GEHA is barred by the provision of Chapter 429 and by laches from now challenging the special assessment. Sections 429.061 and 429.081 prescribe the requii ements for appealing from a special assessment. Section 429.061 requires that written objection by the property owner and provides that "[a]ll objections to the assessments not received at the assessment hearing in the manner prescribed by this subdivision are waived, unless the failure to object at the assessment hearing is due to a reasonable cause. Section 429.081 goes on to provide that appeals must be brought within 30 days after adoption of the assessment and that this is the exclusive method of appeal from a special assessment. In Sievert v. City of Lakefield, 319 N.W. 2d 43, 44(Minn. 1982), the Minnesota Supreme Court recognized that the addition of this provision in Section 429.081 clarified the legislative intent that there be no other avenue of contesting special assessments under alternative remedy theories, such as Minn. Stat. §278.01 (which governed objections and defenses to payments of real estate taxes). In Sievert, the Court determined that the plaintiffs suit, while pled as a breach of contract, was an indirect attack on the special assessments levied against his property as a result of the alleged breach. The Court held that the plaintiff had waived his rights by not complying with the 429 appeal procedures, as the breach of contract claim could have been raised by objection and appeal under the statute. The court reasoned that the use of the phrase "all objections" in 429.061 implicitly permitted any theories to be raised under a 429 appeal. The Minnesota Supreme Court has not strayed considerably from the rule it outlined in Sievert. In Klapmeier v. Town of Center of Crow Wing County, 346 N.W.2d 133 (Minn. 1984) the court held that failure to mention appeal rights in the notice of reassessment rendered the notice defective and deprived the Town Board of jurisdiction to make the special assessment. The Court of Appeals has, in dicta, stated there may be other claims such as fraud which will not be precluded by failure to follow the 429 appeal process, however there is no binding precedent on this issue. The rule is once jurisdictional requirements of proper notice have been met, all other objections to the special assessment will be waived if not brought in accordance with 429.061 and 429.081. Here, the GEHA, although under different control, received notice of the special assessment and did not object or appeal the assessment of Lot 88 as required by 429. Having failed to do so, the mere change in control of the GEHA is not sufficient to render the assessment voidable. The doctrine of laches also comes into play, here, as over five years have passed since the special assessment was adopted. Under the doctrine of laches, relief will be denied in cases where "unreasonable delay in asserting a known right, resulting in prejudice to others makes it inequitable to grant the relief prayed for. Shortridge v. Daubney, 425 N.W.2d 840, 842 (Minn. 1988) citations omitted. In Shortridge, the property owners delayed four years in bringing suit alleging that the notice was defective. The Minnesota Supreme Court held that the claim was barred by laches, find that municipalities are prejudiced if there is no point at which their assessments become final. Id. As this situation involves an assessment adopted more than five years prior to objection being raised, any appeal will be barred by laches. Conclusion: Although the City has legal support to reject the request for reassessment, the City may, on policy reasons, desire to reassess the existing amount for the improvements to the specific units. However, if the City considers reassessment, the City should insure that the following take place before reassessment: 1. Each parcel owner for all parcels in the property must agree to the amount of future assessments in writing. 2. If any parcels are subject to foreclosure, the City must insure that its assessment has priority over any other interest in the property; and 3. The City must insure that reassessment will not result in the City losing its priority in its ability to collect on the assessment if the assessment is not paid. THIS PAGE INTENTIONALLY LEFT BLANK INFRASTRUCTURE CONCERNS STREETS The Graceview Estates Development was approved in 2002 with a mix of public and private streets. The Ordinance in affect at that time indicates the minimum right -of -way (ROW) was 66 feet. With regard to the streets in the GEHA they are not dedicated as true ROW, rather through drainage and utility easements. The utility easement in the area being discussed ranges from 40 to 45 feet, with actual street pavement of 24 feet. Through the PUD process the developer was allowed to construct private streets with a width that was not consistent with City standards. In addition to the street width, the private streets include surmountable curb, which is consistent with City standards. (See attached extract from the St. Joseph Code of Ordinance) A street section that only has utility easement width of 40 to 45 feet, with actual surfacing of 24 feet and surmountable curb presents the City with the following concerns: 1. Snow Removal Equipment — With the exception of a % ton truck with plow, the snow equipment has a difficult time maneuvering, especially in curved sections such as those in the GEHA. 2. Snow Removal, Snow Storage — The narrow utility easement does not provide adequate space for snow storage. 3. Road Delineation — Surmountable curbing does not provide an end spot for plow trucks with the potential of yard damage after snow thaw. With regard to acceptance of the Improvements, the City accepted the utility and street improvements of 4th Avenue as they are public improvements, and conform to the standards identified in the St. Joseph Code of Ordinance. The City does not accept private improvements as they are not built to the City Standards. WATER /SEWER — Page 6 of the letter from Roger Neils states "The Records Drawings clearly identify the location of the water and main sewer lines and show that they are accessible by the public for maintenance and replace without disturbing individual owned units and property." Based on the discussion with staff, the statement above is not correct. The Water and Sewer mains are constructed under the private street. To accept the improvements at this time would present the following concerns (for the purpose of this discussion Lot 49, Block 3 is used and is representative of other lots in the area being discussed — map attached): 1. The water main is located approximately 13 feet from the building pad and is 8 feet deep. If the City needed to complete repairs or replace the pipe in the future, the trench must be 1.5:1. The trench in this particular case would be at the house pad. This type of construction would carry a higher cost and there would be a greater risk of structure damage. 2. The sewer main is located 19' from the building pad and is 12' deep, again requiring a 1.5:1 slope for work on such carrying the higher construction cost and risk to structure integrity. 3. The water shut off valves are located outside public utility easement and the City would not have legal access to the curb box. All water and sewer lines in the GEHA solely benefit GEHA and are not utilized for any other service connections. PONDS — Page 6 of the letter from Roger Neils states " The ponds do not solely serve the property within Gracview States but provide public benefit beyond the development as well as drain into the City System. In reviewing records, the platted property owned by the GEHA includes three holdings ponds of which two solely benefit GEHA. The third holding pond, adjacent 4 th Avenue, receives drainage from both 4 th Avenue and the back yards of GEHA. Based on the City Council minutes dated February 21, 2002, the Engineer for the development stated that the development assumed that all the holding ponds /drainage areas would be privately owned either by an Association or Individual Property Owner. To accept the ponds at this time would present the following concerns: 1. The Ponds were used for density calculation for the development, which allowed for additional units. 2. The Ponds have not been constructed per the construction documents at the time of development and do not meet the standards of public ponds. 3. The City Standards require that all public ponds be platted as outlots, in the case of Graceview they are dedicated through easements. Even if the GEHA would agree to replat the ponds so they are outlots, they could not meet the pond requirements currently enforced through the St. Joseph Code of Ordinance. Examples of requirements that could not be met include structure setback and access (20 -foot wide access shelf around the pond). Therefore merely replatting the ponds does not translate into the ability of the ponds to become public. e) Intersections. Under normal conditions, streets shall be laid out so as to intersect as nearly as possible at right angles, except where topography or other conditions justify variations. 0 Arrangement of Frontage Roads. Wherever the proposed subdivision contains or is adjacent to the right -of -way of a railroad or a limited access arterial, provision shall be made for a frontage road adjacent to and more or less parallel with said right -of -way, or for a street at a distance suitable for the appropriate use of land between the street and said right -of -way. The frontage road shall be designed with due consideration for outer pavement separation, traffic storage at cross streets, and approach connections to future grade separations. g) Arrangement of Alleys. Alleys shall be provided in commercial and industrial districts, except that this requirement may be waived where other definite and assured provision is made for service access, such as off - street loading, unloading and parking consistent with and adequate for the uses proposed. Except where justified by special conditions, such as the continuation of an existing alley in the same block, alleys will not be approved in residential districts. Dead end alleys shall be avoided wherever possible, but if unavoidable, such dead end alleys may be approved if adequate turn around facilities are provided at the closed end. h) Half Streets. Dedication of half streets will not be allowed. i) General Design Standards. The following design standards shall be observed as minimum requirements. Where in the opinion of the Planning Commission sound engineering judgment dictates more stringent requirements in a given situation, the minimum requirements shall be adjusted accordingly. (1) Right -of -Way - Urban Design: Where the streets in a proposed subdivision are to be constructed as an Urban Design, the following minimum right -of -way dimensions shall be observed: Street Feet Required Principal Arterial Special Design Minor Arterial 100 Collector 80 Local 66 Frontage 50 Alley 20 Pedestrian Way 10 v. 1 i'.J. - C.1 I IOC 1099 ' , OI,u .3 R :; !V N1 I ' r . , ! . . 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I • 0:60.0504 J. • ^3. cam .esicas: "";°' ""%"°' °. rp. exow ncxnwnorr - o. 0,719 Act. rb h .. v = ]I n d 54 �l Norton . 56379 GRACEVIEW ESTATES EROSION CONTROL, SIGNAGE AND u. _. ST. JOSEPH. MINNESOTA STOCKPILE LOCATION '' '- --- � 0 iZ - 1 Extract of City Councl Minutes February 21, 2002 Preliminary Plat, Graceview Estates — Bob Herges and Rick Heid: Bob Herges and Rick Heid appeared before the Council requesting approval of the preliminary plat of Graceview Estates. Herges stated that he along with the City Engineer, City Attorney, Mayor and City Administrator Clerk have met with representatives of St. Benedict's regarding an ingress,'egress on the northern section of property owned by the College of St. Benedict abutting County Road 121. The ingress /egress has been requested by the Planning Commission and Council to assist with the efficient movement of traffic from Graceview Estates. At this time the College has not indicated willingness to release property so the ingress /egress can be completed. Hosch elaborated that the City submitted four alternative to the College of St. Benedict for consideration and have not received a favorable response. The College has submitted a letter stating they need additional information before making a decision and do not anticipate making a decision until April 25, 2002. Hosch stated that the road is an essential element before the final plat can be considered. Herges expressed frustration with the process and stated that he needs to move his project forward and cannot wait until April. He was of the understanding that the College would render a decision on February 14 and now the date has been pushed back further. Herges stated that he has attempted to resolve the outstanding issues of Graceview Estates but cannot go further without owning the property in question. At this time Herges requested the City approve the preliminary plat of Graceview Estates as presented. The Council was of general consensus that before final approval of Graceview Estates, the developer must secure a temporary construction easement from the College of St. Benedict to allow ingress /egress from County Road 121 to the proposed development. Further, the developer must provide the City with executed utility easements from the College of St. Benedict to allow the installation of utility lines along the southern edge of their development extending to County Road 121. The Council agreed to consider this matter again on March 7, 2002. Scherer recommended the Council resolve the ingress /egress issue or at least have an understanding of the status of the proposed northern access before approving the final plat. Bettendorf questioned if the outlots /drainage areas provided in Graceview Estates would be privately owned or if the developers will be requesting the City to assume ownership upon platting. Linda Brown stated that the development assumes that all the holding ponds /drainage areas would be privately owned either by an association or individual property owner. Bettendorf requested the engineers for the developer verify the width of the proposed roads. In reviewing the plat it appears as the roadbeds will only be 32 feet in width and typical residential streets in St. Joseph are 36 feet in width. The developer agreed to review this matter before submitting the final plat. Bettendorf also questioned the vacation of an easement as requested in the development application. The easement vacation is for a portion of 95 Avenue that will be redesigned. Scherer stated that the vacation of easement should not be considered until construction of the affected phase. The developers agreed withdraw the easement release request at this time. Hosch made a motion to approve the preliminary plat of Graceview Estates with the following contingenies: 1. The developer will continue to secure a temporary construction ingress /egress from the College of St. Benedict for temporary construction in phase one and work with the City to secure a permanent ingress /egress for future development. Phase two of Graceview Estates cannot be approved until an access to County Road 121 is secured. 2. The developer will secure a utility easement for the installation of water and sewer lines from the College of St. Benedict. 3. The Engineer verifies the width of the roads in the development to the satisfaction of the City Engineer. The motion was seconded by Loso and passed unanimously by those present. EXECUTIVE PLAZA BUILDING 1011 SECOND STREET NORTH, BOX 307 ST. CLOUD, MINNESOTA 56302 320.253.7130 NEIIS • • CHI 1.800.324.8290 FAX 320.253.0503 ATTORNEYS AT LAW nfdaw.com August 31, 2010 Mayor and City Council City of St. Joseph 25 College Ave. N. P.O. Box 668 St. Joseph, MN 56374 Re: Graceview Estates, Graceview Estates Homeowners Association Lot 88, Block 3, Graceview Estates PID# 84.53533.105 Our File No. 23811 Dear Mayor and Council: I am writing this letter to you on behalf of Graceview Estates Homeowners Association (GEHA) regarding some issues relative to the Common Elements of the lands platted as Graceview Estates. Several matters have come to the attention of the Board of Directors of GEHA in performance of their duties which they have now determined must be brought to your formal attention, so we request that this be placed on the agenda at the next City Council meeting on September 16, 2010. In order, these matters are the following: 1. 7T$ AVENUE STREET AND CURB /GUTTER ASSESSMENT. The proper designation for the assessments in question are the "2006 Cloverdale Area Improvements." The Common Elements were assessed a total of $20,200.74 as shown on the final assessment - worksheet for the Cloverdale Area Improvements submitted with this letter. After payment of the 2010 property tax statement by GEHA, the remaining unpaid amount of the assessment is $15,308.44. GEHA is not now contesting the amount of the special assessment, only the rendering of it against the Common Elements rather than individual lots. The special assessment of Lot 88, for the Cloverdale Area Improvements is contrary to and in violation of the requirements of applicable Minnesota Statutes. Specifically: Minnesota Statutes §515B.1- 105(b)(2) "Separate Titles and Taxation" provides that: F:tDamA2381 i\ St Joseph Mayor and Cotma4002.wpd TIMOTHY CHIRHART JOANN EVENSON JULIE FISK NEIL FRANZ ANDREW HULTGREN ROGER NFJLS Qualified ADR Neutral Also Admitted in North Dakota Qualified ADR Neutral Real Property Specialist EXECUTIVE PLAZA BUILDING 1011 SECOND STREET NORTH, BOX 307 ST CLOUD, MINNESOTA 56302 320.253.7130 NEILS • • CHI 1.800.324.8290 FAX 320.253.0503 ATTORNEYS AT LAW nfdaw.com August 31, 2010 Mayor and City Council City of St. Joseph 25 College Ave. N. P.O. Box 668 St. Joseph, MN 56374 Re: Graceview Estates, Graceview Estates Homeowners Association Lot 88, Block 3, Graceview Estates PID# 84.53533.105 Our File No. 23811 Dear Mayor and Council: I am writing this letter to you on behalf of Graceview Estates Homeowners Association (GEHA) regarding some issues relative to the Common Elements of the lands platted as Graceview Estates. Several matters have come to the attention of the Board of Directors of GEHA in performance of their duties which they have now determined must be brought to your formal attention, so we request that this be placed on the agenda at the next City Council meeting on September 16, 2010. In order, these matters are the following: 1. 7 AVENUE STREET AND CURB /GUTTER ASSESSMENT. The proper designation for the assessments in question are the "2006 Cloverdale Area Improvements." The Common Elements were assessed a total of $20,200.74 as shown on the final assessment - worksheet for the Cloverdale Area Improvements submitted with this letter. After payment of the 2010 property tax statement by GEHA, the remaining unpaid amount of the assessment is $15,308.44. GEHA is not now contesting the amount of the special assessment, only the rendering of it against the Common Elements rather than individual lots. The special assessment of Lot 88, for the Cloverdale Area Improvements is contrary to and in violation of the requirements of applicable Minnesota Statutes. Specifically: Minnesota Statutes §515B.1- 105(b)(2) "Separate Titles and Taxation" provides that: F:\Data1233I I1St. Joseph Mayor and CAenal-002.wpd TIMOTHY CHIRHART JOANN EVENSON JULIE FISK NEIL FRANZ ANDREW HULIGREN ROGER NEILS Qualified ADR Neutral Also Admitted M North Dakota Qualified ADR Neutral Rea! Property Specialist Page 2 August 31, 2010 "If there is any unit owner other than a Declarant, each unit shall be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements." [Emphasis added.] Minnesota Statutes §273.124, Subd. 2(a), requires that the value of the common elements is to be attributed to the planned community units, i.e., the residential lots included within Graceview Estates, and specifically that: "The common elements of the development must not be separately taxed." [Emphasis added.] Minnesota Assessor's Manual, Section 3330, also submitted with this letter. Provides: "The value of Townhouse property must be increased by the value added by the right to use any common areas in connection with the Townhouse development. The common areas of the development must not be separately taxed." [Emphasis added.] The following dates are relevant in discussion of this issue: • August 26, 2002: Plat of Graceview Estates, Developer Agreement, Covenants and Easements recorded. • September 16, 2003: Graceview Estates Declaration recorded. • November 5, 2003: Warranty Deed conveying first lot to owner other than Declarant recorded, Document No. A1088446. (Note: This is the date after which no taxes or assessments may be rendered against the Common Elements per M.S. § 515B.1- 105(b)(2) above.) • April 14, 2004: Lot 88, constituting common elements conveyed to GEHA, Document No. A1107528; completing establishment of the common interest community. • February 10, 2005: Resolution 2005 -070 passed adopting assessment for Cloverdale Area, for "the improvement of street, curb and gutter, water and sewer for the benefitting property abutting 7 Ave. SE, Dale Street East, and Callaway Street East," was adopted. (Note: Final Assessment Worksheet shows Graceview Estates Homeowners Association as owner of record of Lot 88, Block 3, Graceview Estates.) Thus, in accord with the governing Statutes, the assessment for the Cloverdale Area Improvements, because it was made when "there were unit owners other than the declarant," should not have been assessed against Lot 88; but, rather was required to be spread against all of the lots in Graceview Estates — which would have resulted in a special assessment of $262.35 per lot. Despite the law, however, it is our understanding that, in negotiations with Rick Heid, the $20,200.74 total assessment ($15,891.43 for street reconstruction and $4,309.31for curb and F:'Data\232111St. Joseph Mayor and Cotma-002.wpd Page 3 August 31, 2010 gutter along the 310.60 feet of 7 Ave. S.E. which bordered Lot 88) was assessed against Lot 88. This was invalid and GEHS is asking that the error now be rectified by the City.' This matter can be rectified by the City Counsel through the Reassessment procedures provided by Minnesota Statutes § 429.071 on order of a court of competent jurisdiction or after consideration of the advice of the municipal attorney. It should not be necessary to engage in litigation to resolve this matter and it should not make any difference to the City to which properties the assessments were or are allocated; but it is extremely important to GEHA which is faced with collecting the charges as part of Common Element costs from Lot Owners as opposed to the City's ability to collect amounts due through the County's general property tax procedures — especially in view of the history of the mortgage foreclosure problems of recent years. We understand that the City negotiated with Rick Heid regarding these matters at the time he was in control of GEHA and that the current City Engineers believe that the current assessment is in line with the way they do it. However, Mr. Heid was in a conflict situation and might not have properly looked after the Association's interests — especially again in light of his failure to pay his Association assessments and subsequent mortgage foreclosures. Moreover, the City Engineer is not the proper authority to decide the merits of the issue and may feel obligated to defend an erroneous interpretation of the law. For these reasons, we believe it may be necessary to delve a little deeper into the reasons for our position. MCIOA closely parallels the Uniform Common Interest Ownership Act ( UCIOA). Like the provisions of MCIOA quoted above, UCIOA Section 1 -105 (b)(2) provides as follows: "If there is any unit owner other than a Declarant, each unit must be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements for which Declarant has reserved no development rights." The comment 5 to the UCIOA provision contains the following statement: "Importantly, no separate tax bill on the common elements is to be rendered to the Association or the unit owners collectively, even though, in the context of planned communities, the common elements owned by the Association might be subject to taxation as a separately owned parcel of real estate, in the absence of this provision." 1 At the present time, reassessing the remaining amount of $15,308.44 against the 77 individual lots would result in an assessment of $198.81 per lot. An Attorney General Opinion, Op.Atty.Gen. 408b, 10/14/1966 says that reassessment does not affect assessments already paid. F:\Data\238111St. Joseph Mayor and Counci-002.wpd Page 4 August 31, 2010 [Emphasis added.]' 3 The reality underlying these provisions is that without such a provision the community association and individual unit or lot owners would face double taxation. "The double taxation problem occurs when local jurisdictions assess a tax based on a fair market value appraisal of the common areas owned by the homeowners association. At the same time that the association is receiving this tax bill, members of the association receive tax bills for their individually owned homes. The assessed value of the individually owned pieces of property also reflects the value of the common property that was included in the original sales price. Consequently, the association is taxed and so are the individual members. Moreover, any accurate fair market value of the common property would be quite low because it is subject to recorded covenants and restrictions severely limiting its use and transferability. As a result, it is inappropriate (1) to use a "market" value without substantially reducing that value because of the recorded restrictions and (2) to seek to assess both the lot owners and the association for the value of the same property." Hyatt, Community and Homeowners Association Practice: Community Association Law, Third Edition, page 132. Our legislature in adopting the above referenced statutes has "... reflected the reality that the Association's common properties have no `fair market value' because of the restrictive covenants limiting its use and because the value itself is already reflected in the members' property tax bill." Id. Page 133. It is clear that this analysis applies to special assessments as well as general property taxes. In the first place, Minn. Stat. §515B.1- 105(b)(2) specifically refers to taxes and assessments, not just taxes. Second, the statutory scheme of Chapter 429 of Minnesota Statutes providing for and governing local improvements and special assessments contemplates collecting assessments from property benefitted by the improvement based upon the benefits received whether or not the property abuts on the improvement. In making the special assessment, the City Council determined that the properties of Graceview Estates received benefit from the street reconstruction or curb and gutter. The Statutes provide that the assessments attributable to that value have to be spread against all of the individual units rather than the Common Elements bordering the street even though the individual lots in this planned community do not abut the 2 The only Minnesota case coming close to dealing with this issue, The Preserve Association v. City of Eden Prairie, 421 N.W.2d 419 (Minn. App. 1988), which might be read as contrary authority was decided prior to adoption of Minnesota Statutes Chapter 5156 and did not consider the provisions of the predecessor statute or M.S. § 273.124, Subd. 2, which was adopted In 1985, at all. 3 Powell on Real Property, § 54A.05(11j[c] also recognizes that Minnesota is among the states that provides that no tax bill is to be separately rendered for the common elements of a common interest community. F:\DW'2381I St Joseph Mayor ®d Coma1- 002.wpd Page 5 August 31, 2010 improvement and their only access is through the streets within Graceview Estates. 45 GEHA respectfully requests that the City reassess the special assessment for the 2006 Cloverdale Area Improvements rendered against Lot 88 to Lots 11 through 87, Graceview Estates, in accord with the procedures established under Minnesota Statutes Section 429.071. 2. INFRASTRUCTURE CONCERNS. The second area of concern at this time relates to the status of the infrastructure within Graceview Estates; i.e., whether it is to be public or private.' The premise of the Developer Agreement for Graceview Estates, dated June 24, 2002, is that the "City's Code of Ordinance [sic] requires the Developer to provide for the construction of certain public improvements ...." [Emphasis added.] The Agreement then provides for the construction and financing of "Street, curb, gutter, storm sewer, sanitary sewer, water, holding ponds and walking paths" (Paragraph 2.1) by the Developer as "Plan B Improvements" according to City specifications and inspections. Engineering responsibility for Plan B Improvements is divided between the Developer's retained engineer and the City Engineer who was required (Paragraph 2.3) (a) to provide City project standards, (b) review Plans and Specifications, © provide construction observation throughout construction, (d) conduct a final inspection and (E) "Recommend Acceptance of Plan B Improvements to the City." The Agreement further provided (Paragraph 4.5) that the City "will accept" said improvements upon certification by the City Engineer that the improvements were completed in conformance with its terms. All Plan B Improvements have been constructed in accord with the approved plans and specifications — and paid for — but to date only Fourth Street with its associated curb and gutter and the walking paths have been accepted. The Developer did its work. The City has enjoyed the expanded tax base of these properties for the past six years without cost — it seems that it would 4 For reference purposes, 1 have also consulted with David Eide of the Felhaber Law Finn in Minneapolis regarding these issues. He is the pre - eminent practitioner of common interest community law in Minnesota and confirms that it is the universal practice to handle taxes and special assessments in the manner 1 have discussed above. I have also confirmed with the County Assessor that the values previously erroneously assessed against Lot 88 have been removed at our request and only nominal value will be assigned to the lot for record keeping purposes. 5 The provisions of M.S. § 515B.117(b) providing that liens for improvements on common elements are perfected by recording a lien against all of the units in the CIC, and § 5158.4- 110(b) requiring the release of all liens from common elements before conveyance to the association, are consistent with this scheme of prohibiting impositions on the common elements. 6 Please note that the following discussion relates only to lands included within the original plat of Graceview Estates. The Common Elements are solely comprised of Lot 88, Block 3, according to the plat of Graceview Estates filed on August 26, 2002, as Document No. 1021426. The Common Elements are owned in fee title by GEHA for the benefit of the Owners and Occupants of Lots 10 through 87, inclusive Block 3, Graceview Estates, and are govemed by the Declaration of Common Interest Community No. 62, filed September 16, 2003, as Document No. 1080799, and subject to the provisions of Minnesota Statute Chapter 515B, known as the Minnesota Common Interest Ownership Act (MCIOA). MDw\2381 IISt. Joseph Mayor end Couuc l.062.wpd Page 6 August 31, 2010 be nothing less than proper for the City to accept responsibility at this time. GEHA and the individual property owners should not have to bear the burden and potential expense of maintaining the Plan B Improvements infrastructure any longer. GRACEVIEW ESTATES WATER/SEWER MAINS. In discussion with the City engineer and on reviewing the Record Drawings, it appears that these mains are built to City standards in accord with the Development Agreement and are and have been suitable for acceptance by the City. Nevertheless, we understand that the City considers them private improvements and certainly has never formally "accepted" responsibility for these mains. GEHA would like to request that the City accept and take over the water and sewer mains "as built" within Graceview Estates as contemplated by the Developer Agreement. The water and sewer mains were installed under the City engineer's monitoring and approval both in design and during construction. Easements were provided to the City in accordance with the Developer Agreement for installation and maintenance of the improvements. While the water and sewer mains were not formally dedicated to the City, the mains were installed the dedicated drainage and utility easements on the Common Elements. The Record Drawings clearly identify the location of the water and sewer mains and show that they are accessible by the public for maintenance and replacement without disturbing individually owned units and properties. Furthermore, GEHA has limited ability and no authority to deal with a situation which could arise if these mains require emergency repair or replacement in the future which could lead to a public health concern and may put the City at risk. Rather than facing catastrophe in the future it seems that it would be prudent for the City to take over these mains now — of course responsibility for service and maintenance of service lines to individual properties would remain with the individual lot owners. . THE GRACEVIEW ESTATES HOLDING/RETENTION PONDS. Like the case of water and main sewer mains discussed above, the Development Agreement contemplates acceptance by the City on completion. GEHA would again request that the City now accept dedication of the holding retention ponds and storm sewer lines as shown on the Record Drawings. Again, it is our understanding that these ponds were designed and built under City supervision and designed and constructed so as to accommodate flows from and to properties outside of Graceview Estates. They can be accessed and serviced without disruption of individually owned properties and can be more readily serviced and maintained by the City rather than GEHA. The ponds do not solely serve the property within Graceview Estates but provide public benefit beyond the development as well as drain into the City system — as do the sanitary sewer mains discussed above. GRACEVIEW ROADWAYS: GRACEVIEW DRIVE, GRACEVIEW LOOP AND FAITH LANE. The final request of GEHA is that the City consider accepting and taking over F:`Data'238111St. Joseph Mayor and Council- 002 .wpd Page 7 August 31, 2010 the above referenced roads. Here, GEHA recognizes that these roads, constructed within the drainage and utility easements on the Common Elements, were constructed within the drainage and utility easements rather than on separately dedicated streets and were constructed to less than the standard requirements for City streets at the request of the Developer in order to save costs and maximize developable area within the property — all with the City's knowledge and approval of the Plat and plans. It is our understanding that the streets are physically sound; but that the primary issues of concern to the City would be the widths of the streets, rollover design of curbs and gutters and the capacity to handle snow storage. GEHA would like to discuss these matters further with City representatives to see if something could be done to accommodate at least some of its concerns — perhaps contracting with the City for some services to gain economies of scale.' Like the discussion of double taxation above regarding assessment of Association property for the same values included in residential units constituting an association; when the City taxes the properties within Graceview Estates for general City services, including sewer and water, without accepting the public improvements infrastructure installed by the Developer as required by the Development Agreement, while at the same time it requires GEHA and therefore the residents of Graceview Estates to be responsible for ongoing maintenance, repair and improvements, the City has not met the intent of the Agreement and the residents of Graceview Estates are being double taxed. GEHA respectfully requests that the City formally acknowledge, accept and take over the infrastructure within Graceview Estates. Thank you for your consideration and attention to these matters. NEILS, FRANZ, CHIRHART, HULTGREN EVENSON, P.A. Roger D. Neils Attorney at Law RN /jr cc: Judy Weyrens, City Administrator Tom Jovanovich, City Attorney ' We note also the provisions of Minnesota Statute §160.21, Subd. 6, newly enacted, adding a subdivision to deal with snow removal from streets of uncompleted subdivisions. F ADataa 23811 St. Joseph Mayor and CowcB- 002.wpd • Graceview CITY OF ST. JOSEPH DEVELOPER AGREEMENT `b THIS AGREEMENT, made and entered into this 24 day of June, 2002, by and between Pond View Ridge, LLP, hereinafter called the "Developer", and the City of St. Joseph, Minnesota, a municipal corporation, hereinafter called the "City". W1TNESSETH: WHEREAS, the Developer is the Owner of certain Real Property known as Graceview Estates, which is legally -- described on Exhibit A, (hereinafter called the "Property ") attached hereto and made a part hereof; and WHEREAS, the City's Code of Ordinance requires the Developer to provide for the construction of certain public improvements, and for the financing of said improvements; NOW, THEREFORE, in consideration of the mutual covenants expressed herein, IT IS HEREBY AGREED AS FOLLOWS: 1.0 CITY CONSTRUCTED IMPROVEMENTS (Intentionally left blank - no City Constructed Improvements) 2.0 DEVELOPER CONSTRUCTED IMPROVEMENTS 2.1 Plan B jrnmmum&s. The Developer agrees to construct those improvements itemized below, hereinafter know as Plan B Improvements: Street, curb, gutter, storm sewer, sanitary sewer, water, holding ponds and walking paths. The Plan B Improvements itemized above shall include all necessary appurtenant items of work as determined by the City. • • 2.2 Completion Deadlines. The Developer agrees to proceed with said Plan B Improvements entirely at its expense, and to complete said improvements within the time specified in the specifications, or within 12 months of the date of this agreement if no time is stated in the specifications. 2.3 Engineering. Services. The Developer will retain an engineer to prepare complete construction Plans and Specifications for Plan B Improvements. The engineer shall: (a) Prepare a Preliminary Estimate and Layout of Utilities and arrange for soil borings and/or such other subsurface investigations as the City may require. (b) Prepare complete construction Plans and Specifications. As Plans and Specifications are being prepared, copies shall be available for review and comment by the engineer. The City shall approve final content of the Plans and Specifications. (c) Secure all necessary permits including those required by the Minnesota Pollution Control Agency, the State Health Department, the Depar rent of Natural Resources, or any other regulatory agency that has jurisdiction. (d) Prepare the Environmental Assessment Worksheet (EAW), if necessary, and any other related environmental documents, reports, or studies as may reasonably be required by the City. (e) Provide all necessary construction staking and related survey work. (t) Prepare record drawings on reproducible mylar sepia and an electronic copy. The reproducible mylar sepia record drawings and electronic copy shall become the property of the City. (g) Prepare and submit such other final documentation as the City may require. The City Engineer shall: (a) Provide such City project standards, including special details and specifications, as the City may require. (b) Review Plans and Specifications. (c) Provide a City Representative for resident construction observation throughout the construction period. (d) Conduct a final inspection and review final construction documentation. (e) Recommend Acceptance of Improvements to the City. 2.5 Cost gscrow. The Developer shall bear the cost of the above noted City Engineering Services and shall, upon execution of this Agreement, place in escrow with the City cash, bond or irrevocable letter of credit in the amount of $25,000 which shall be applied to the payment of the cost of said servioes. Should the above amount exceed the cost to the City, the City shall return to the Developer all unused fiinds, including accumulated interest. Should expense to the City exceed the above amount, the Developer shall reimburse the City for all additional costs before the improvements are accepted by the City. 1 2.6 Contractor Retention. Upon approval of the Final Plat, the Developer shall contract with a contractor for the construction of the Plan B Improvements (hereinafter the "Contractor "). The Contractor selected by the Developer to construct and install any Plan B Improvement shall be qualified and competent to perform the work and have adequate finances to perform. The City reserves the right to require evidence of competency and adequate financial status of any such Contractor, and prohibit a Contractor who fails to provide such evidence from undertaking work on the improvements. The construction, installment, materials and equipment shall be in accordance with approved Plans and Specifications. 2.7 Citv as Third Party Beneficiary. The City shall not have any direct contractual relationship with the Contractor, but shall be considered a third party beneficiary to the contract entered between the Developer and the Contractor. The City shall not be liable to the Contractor for the Developer's breach of a duty to the Contractor. 2.8 Elgin= The Developer shall make available to the City, at no cost to the City, all permanent and temporary easements necessary for installation and maintenance of Plan B Improvements. 2.9 Insurance. The Developer shall provide evidence of Comprehensive General Liability and Broad Form Property Damage insurance including contractual coverage in the amount of at least $1,000,000 per occurrence and 51,000,000 aggregate. The Developer's insurance certificate shall be in a form approved by the City, and shall be delivered to the City at least three days prior to the commencement of any work on the Plan B Improvements. The City and the City Engineer shall be named as an additional insured on such policy by endorsement. Such insurance shall remain in full force and effect through thc end of the warranty period described in Section 2.11. The Developer shall cause each person with whom Developer contracts for the construction and installation of any Plan B Improvements to provide evidence of insurance coverage in accordance with the City project standards issued under Section 2.4. The Developer shall, (or if all construction contracts are under the control of one Prime Contractor), the Prime Contractor shall provide evidence of Owner/Engineer Protective Liability coverage in accordance with these standards in lieu of the Developer insurance certificate. Evidence of insurance shall be provided before any construction whatsoever begins on thc Plan B Improvements. The Developer shall provide builder's risk insurance (if necessary), insuring any structures (such as lift stations or pump houses) which are part of the Plan B Improvements from damage or destruction during construction due to storm, explosion, vandalism, theft, or all other causes. The policy of insurance shall name the City as a loss payee, and waive subrogation against the City and City Engineer with respect to any insured claim. 2.10 Perforjnance Security. Prior to the actual construction of Plan B Improvements pledged to be constructed by the Developer, then in that event, the Developer shall post with the City a bond, irrevocable letter of credit or dedicated escrow account (the "Security ") in the estimated amount of 1.10 times the City Engineer's Estimate of the likely costs of such improvements, conditioned upon the faithful construction of the improvements according to the Plans and Specifications, and final approval of the City Engineer, and the terms of this Development Agreement. As the improvements are partially completed, the Developer may request the City to release a portion of the Security representing the cost of the completed improvements as determined by the City Engineer, but at all times there shall be Security in an amount of at least 110% of the estimated cost of the unfinished improvements. If the construction contracts are under the control of one Prime Contractor , the Prime Contractor may provide the performance security required by this section. 3 1 2.11 Warranty Bond. The Developer shall fully and faithfully comply with all the terms of any and all _ Contracts entered into by the Developer for the installation and construction of all Plan B Improvements and hereby warrants and guarantees the workmanship and materials for a period of two years following the City's final acceptance of the Plan B Improvements. In addition to the Security required by Section 2.10 herein, the Developer hereby warrants and shall post a warranty bond, warranting the condition of the materials and workmanship of the improvements for a period of two (2) years following the City's final acceptance of the Plan B Improvements. If any claims are made in writing within the warranty period, the bond shall not be released until such claims are resolved. If the construction contracts are under the control of one Prime Contractor, the Prime Contractor may provide the warranty bond required by this section. 2.12 Labor and Materialman's Bond. Upon execution of this Agreement, the Developer shall also provide the City with a labor and materialman's bond, guaranteeing the payment of all workmen performing labor or services, and all supplies or materialinen providing materials for the Plan B Improvements. This bond shall not be released until the Developer has provided the City Engineer with proof of payment of all laborers and materialmen in the form of release, signed receipts, or lien waivers. If the Developer contracts with a single Prime Contractor, and all construction contracts are under control of the Prime Contractor, the Prime Contractor may provide the laborer and materialmen bond required by this section as lung as the Prime Contractor agrees to waive any lien rights for the labor and/or material provided by the Prime Contractor. 3.0 FUTURE IMPROVEMENTS (Intentionally left blank - no future improvements) 4.0 GENERAL TERMS AND CONDITIONS 4.1 Attorney Fees. The Developer agrees to pay the City reasonable attorney's fees, to be fixed by the Court, in the event that suit or action is brought to enforce the terms of this Agrr emettt. 4.2 proof of Title. The Developer hereby warrants and represents to the City, as inducement to the City's entering into this Agreement, that Developer's interest in the Development is fee owner. Prior to execution of this Agreement, the Developer shall provide the City with a title opinion prepared by a licensed attorney and directed to the City stating the condition of title of the property, or other proof of title acceptable to the City. 4.3 J3indina Ulm on Parties and,Sucoessorl. The terms and provisions of this Agreement shall be binding upon and accrue to the benefit of the heirs, representatives, successors and assigns of the parties hereto and shall be binding upon all future owners of all or any part of the Development and shall be deemed covenants running with the l and. Reference herein to Developer, if there be more than one, shall mean each and all of them. This Agreement, at the option of the City, shall be placed on record so as to give notice hereof to subsequent purchasers and encumbrances of all • or any part of the Development and all recording fees shall be paid by the Developer. 4.4 Notice. Any notices permitted or required to be given or made pursuant to this Agreement shall be delivered personally or mailed by United States mail to the addresses set forth in this paragraph, by certified or registered mail. Such notices, demand or payment shall be darned timely given or made when delivered personally or deposited in the United States mail in accordance with the above. Addresses of the parties hereto are as follows: 4 • If to the City at: City of St. Joseph, P.O. Box 668, St. Joseph, MN 56374 If to the Developer at: Pond View Ridge, LLP c/o Rick Heid and Bob Herges 22825 Fleetwood Drive 25 11th Avenue North St. Cloud, MN 56301 St. Cloud, MN 56303 4.5 Acceptance of Improvements. The City will accept said improvements or portions thereof, upon certification by the City Engineer that, to the best of his knowledge and belief, the improvements have been completed in conformance with the terms of this Development Agreement and all documents incorporated herein by reference. 4.6 Incorrpfation of Documents by Reference. All general and special conditions, plans, special provisions, proposals, specifications and contracts for the improvements furnished and let pursuant to this Agreement shall be and hereby are made a part of this Agreement by reference as if fully set out herein in full. 4.7 Indemnification. The Developer shall hold the City and City Engineer harmless from claims by third parties, including but not limited to other property owners, contractors, subcontradtors and materialmen, for damages sustained or costs incurred resulting from plat approval and the development of the Property. The Developer shall indemnify the City for all costs, damages or expenses, including engineering and attorney's fees, which the City may pay or incur in consequence of such claims by third parties. 4.8 License to Enter Land. The Developer hereby grants the City, its agents, employees, officers and contractors a license to enter the Property to perform all work and/or inspections deemed appropriate by the City during the development of the Property. 4.9 Streets. (a) During any period of spring weight restrictions, when the streets within the Development have the first lift of pavement, but prior to final acceptance of the improvements by the City, the Developer shall post signage at each entrance to the Property as notice restricting access to vehicles with a an axle weight of five tons or less. (b) The Developer shall promptly clean any soil, earth or debris from streets an or near the Development resulting from construction work by the Developer or its agents or assigns as often as necessary and as directed by the City for public safety and convenience. In the event the Developer fails to clean the streets within 48 hours of the direction of the City, the City may undertake the work and seek reimbursement from the Developer, or alternatively, assess the cost against property owned by the Developer within the City. 4.10 Erosion Control. The Developer shall comply with any erosion control method ordered by the City for the prevention of damage to adjacent property and the control of surface water runoff. As the development progresses, the City may impose additional erosion control requirements if in the opinion of the City Engineer such requirements are necessary to retain soil and prevent siltation of streams, ponds, lakes, or other adjacent properties, or of City utility systems. The Developer shall comply with the erosion control plans and with any such additional instruction it receives from the City. All areas disturbed by the excavation and backfrlling operations shall be reseeded forthwith after the completion of the work in that area. Seed shall be rye grass or other 5 ! • fast growing seed to provide a temporary ground cover as rapidly as possible. All seeded areas shall be mulched and disc - anchored as necessary for seed retention. The parties recognize that time is of the essence in controlling erosion. 4.I 1 Site Grading. (a) No building permits will be issued until site grading for the development phase has been completed and approved. (b) When the site grading has been completed: 1. Developer shall have a Registered Land Surveyor verify site grading has been completed according to the approved site grading plan submitted with the preliminary plat documents. 2. Elevations shall be taken on all lot comers, all buildings pads, and on drainage breaks, ponding sites, ditches, and swayles. Arrows shall show how the lot is to drain. 3. The Developer shall submit a copy of the approved grading plan showing the "as-builr elevations to the City. 4. The City will verify information. If everything matches the original grading plan, the as- built grading plan becomes the approved Development Plan. (c) Before a building permit is issued for new construction for a lot, the owner of the lot shall have a Registered Land Surveyor submit a Certificate of Survey showing proposed elevations for lot corners, the building pad, and side and rear lot lines; these elevations must agree with the approved Development Plan. Provide drainage arrows, showing how the lot is to drain. Indicate proposed elevations for grade at the front, rear and at the lookout/walkout levels of the house being built. The certificate must show all easements and setbacks for the house being built. When this Certificate has been checked and approved by the City, a building permit can be issued, subject to other terms and conditions of the Developer's Agreement. (d) When the house has been completed and the lot restored to final grade, but before it is sockleiziolal, the Builder's Surveyor shall provide an "as- built" Certificate of Survey documenting the final in -place elevations and setbacks. If these elevations agree with the proposed grades, and if the setbacks and easements are given the proper clearances, the lot can be sodded or seeded and a Certificate of Occupancy issued. For winter conditions, where the house is ready but the frnai landscaping cannot be completed until spring, an escrow shall be deposited with the City until the feral grading can be checked out. 4.12 Certificate of Compliance. This Agreement shall remain in effect until such time as Developer shall have fully performed all of its duties and obligations under this Agreement. Upon the written request of the Developer and upon the adoption of a resolution by the City Council fmding that the Developer has fully complied with all the terms of this Agreement and finding that the Developer has completed performance of all Developer's duties mandated by this Agreement, the City shall issue to the Developer on behalf of the City an appropriate certificate of compliance. The Acceptance of the Improvements contracted in accordance herewith by the City does not constitute a certificate of compliance and does not release the Developer from 6 • • _ . ongoing duties or responsibilities arising under this contract. The issuance of a Certificate of Compliance does not release the Developer or any Surety from warranty responsibilities arising under Section 2.11 herein. 4.13 Park Contribution. (Option 1) The subdivider shall contribute $ to the City Park Fund in lieu of a dedication of land for parks, with payment to be made upon execution of this Agreement. (Option 2) X The subdivider shall .dedicate as public park or other use as determined by the City to be in the public's best interest that portion of the Property so designated in the proposed final plat as walking paths. The areas designated as walling paths shall be for general public usage. 4.14 Certificate of Occupancy. The City shall not issue certificates of occupancy for any building within the Development until the building has been connected to sanitary sewer and water and the streets in the Development have been constructed to the point of having a gravel base. The granting of a certificate of occupancy by the City shall not be deemed an acceptance of any Plan $ Improvements or a waiver of any of the City's rights under this Agreement 4.15 Reimbursement of Citv's Costs. Except for costs included in special assessments for Plan A Improvements, the Developer shall reimburse the City for all costs, including all reasonable engineering, legal, planning and administrative expenses, incurred by the City in connection with all matters relating to the negotiation, administration and enforcement of this Agreement and its performance by the Developer. Developer shall also reimburse the City for any add-to- construction costs related to the installation of street lighting within the Development. Developer shall also be responsible for the cost of acquiring and installing street signage consistent with that used in other recent developments within the City. Such reimbursement shall be made within 14 days of the date of mailing the City's notice of costs. If such reimbursement is not made, the City may place a hold on all construction or other work related to the Development, or refuse tlx issuance of building permits until all costs are paid in full. The City may further declare a default and collect its costs from the security deposited in accordance with Section 2.5 of this Agreement. 4.16 Renewal of Security. Ilan) escrow account or bond deposited with the City in accordance with this Agreement shall have an expiration date prior to the Developer's obligations hereunder being complete, the Developer shall renew such security or deposit substitute security of equal value meeting the approval of the City at least thirty (30) days prior to the expiration of such security. Failure to post such alternate security or renew such security shall constitute a default and the City may place a moratorium on all construction or other work related to the Development, refuse the issuance of building permits, and declare the entire amount thereof due and payable to the CCityin - cash. Such cash shall thereafter be held by the City as a security deposit in the same manner as the security theretofore held by the City. 4.17 Plat Dedication. Upon approval and execution of this Agreement, the City shall approve the final plat provided it otherwise meets the requirements of the City's Ordinance governing Subdivisions. If the Plat contains the dedication of an easement, the use of property within the area of an easement is specifically restricted by prohibiting the construction of any structure or fence, planting trees or shrubs, or storing of personal property within the area of the easement which could delay, restrict or impede access within the easement area by a person or vehicle. 4.18 Street Lighting and Sienage. Developer shall be responsible for the cost of purchase and installation of street lights and street signs. The improvement shall not be accepted until installation of street lights and street signs is completed. 7 • • 4.19 Wetlands. Developer shall take the following precautions to protect any `wetlands" within the Property, as that term is defined in Minnesota Statute Section 1038.005, Subd. 19; • (a) Upon completion of the site grading, place signs on any lots containing wetlands or drainage easement providing notice of the location of the wetland or drainage easement. The signs shall be in a form and size as prescribed by the City and available for purchase through the City Administrator Clerk's office. The location and number of signs for each lot shall be as required by the City Engineer. (b) Prohibit filling of wetlands so long as Developer is the owner of the affected lot. 4.20 Jroiect Specific Requirements. (a) All construction traffic, either for the construction of the Plan B Improvements or structures on the property, shall access the property via a temporary construction access from County Road 121, as designated by the City. The Developer shall instruct all delivery vehicles and other construction traffic to utilize the temporary construction access. The Developer shall be responsible for construction, maintenance and restoration of the temporary access road. (b) Developer shall make a contribution of $250 per acre (a proportional share of 5250 for any fractional acre) comprising the property to a separate fund to be maintained by the City to be used for the acquisition of right -of -way and comstructietroF read- tssdtatilipes from the west side of the Property to Stearns County Road.121. Contributions shall be made at the time the final plat is executed. Developer shall make subsequent - contributions based on the rate of S250 per acre for any other portion of the real property which comprised the preliminary plat of Graceview. The money deposited in the fimd shall be distributed as follows: The money shall be expended for tlte.construction of the road linking the property and County Road 121 within six (6) years of this Agreement. Any portion of the fund not so expended shall be refunded to the Developer. 4.21 Additional Terms. Developer will be responsible for restoring any temporary construction access roads across the property of others to their previous condition at the conclusion of their use. 4.22 Adoption of Ordinance by Reference. The provisions of Chapter 5 of the St. Joseph Code of Ordinances are hereby adopted by reference in their entirety, unless specifically excerpted, modified, or varied by the terms of this Agreement, or by the final plat approved as approved by the City. Signed and executed by the parties hereto on this day of 9,//111.' , 2002. ATTEST CITY OF ST. JOSEPH 4 11111101. I i- '- By J • e -, City A • s , • ator Clerk Hosch, Mayor (S 8 • POND VIEW RIDGE, LLP, DEVELOPER: 8 2,c�Z�d C Name ,,g0/3_21 il�►Ke: ���� 6Q/1a -.( f" ert- 04- P.04 Uit,H.- 2i l LP Title � ./� 72Y1 L ?T,irz/2 P3 V/ � J STATE OF MINNESOTA ) )ss COUNTY OF ) On this 26'' day of fit") t , 2002, before me, a notary public within and for said County, personally appeared Larry osch and Judy Weyrens, to me personally known, who, being each by me duly sworn did say that they are respectively the Mayor and the City Administrator Clerk of the City of St. Joseph, the municipal corporation named in the foregoing instrument, and that the seal affixed to said instrument is the municipal seal of said corporation, and that said instrument was signed and sealed in behalf of said municipal corporation by authority of its City Council and said Mayor and City Administrator Clerk acknowledged said instrument to be the free act and deed of said corporation. ja� r .4cam Nota b is STATE OF MINNESOTA ) ' . — _ MARY REBER GENEROUS ilOTARY PUBLIC • MINNESOTA As Cambia WM ha. 20 COUNTY OF ) On this .0 day of - iQ pv 2002, before me, a notary public within and for said County, personally appeared e vae Aed ip„br r /70i , to me personally known, who, being by me duly sworn, did say that he/she is the qene. .re/ eryn/isof Pon V iew Ridge, LLP., the limited liability partnership named in the foregoing instrument, anc'that the'seal affixed to said instrument is the corporate seal of said corporation, and that said instrument was signed and sealed on behalf of said corporation by authority of its Board of Directors and said President acknowledged said instrument to be the free at and deed of said corporation. o b i` THIS INSTRUMENT WAS DRAFTED BY MARY REBER GENEROUS John H. Scherer - I3076X ti Horrsma • > Mr CommMNcn Enka An. V, 2005 Rajkowski Hansmeier Ltd. 11 Seventh Avenue North P.O. Box 1433 St. Cloud, Minnesota 56302 Telephone: (320) 251 -1055 n:icitykstjoe\2002 • 9 • Resolution 21705 -07Ct ' City ofSt. Joseph Resolution Adopting Assessment • Cloverdale Area WHEREAS. pursuant to proper notice duly given as required by law, the council has met and heard and passed upon all objections td the proposed assessment for the improvement of street, curb and gutter, water and sewer for benefiting property abutting r Avenue SE, Dale . Street East and Callaway Street East. NOW THEREFORE, BE IT .RESOLVED BY THE CITY COUNCIL OF ST.. JOSEPH, • MINNESOTA: 1. Such proposed assessment, a copy of which is attached hereto and made a part hereof, is hereby accepted and • shall constitute the special assessment against the lands named therein, and each tract of land therein included is hereby found to .be benefited by the proposed improvement in the amount of the assessment levied against it. • 2. Such assessment shall be payable in equal annual installments extending over a period of 15 years, the first of the installments to be payable an or before the first Monday in January 2006, and shall bear interest at the rate of six percent per annum from October 1, 2005. To the cemb To each subsequent installment w hen due shall be added inter until interest b for one year on all unpaid installments. 3. The owner of any property so assessed may, at any time prior to certification of the assessment to the county auditor. pay the whole of the assessment on such property. with interest accrued to the date of payment, to the city treasurer, except that no interest shall be charged if the entire assessment is paid within no later than November 1, 2005; and he may. at any time thereafter, pay to the city treasurer the entire amount of the assessment remaining unpaid. with interest accrued to December 31 of the year in which such payment is made. Such payment must be made before November 15 or interest will . be charged through December 31 of the next succeeding year. 4. The Berk shall forthwith transmit a certified duplicate of this assessment to the county auditor to be extended on the property tax fists of the county. Such assessments shall be collected and paid over in the same manner as other municipal taxes. Adopted by the council this 10i day of February 2005. • 'chard Carlbom, Mayor Jtd 11leyre :, rty Admi •= trator ' J f .. • r 1 k 1 prcc voi„\.) ;: . 1 � ` U CT ;' 11 ' I , .. FINAL ASSESSMENT WORKSHEET 2005 CLOVERDALE AREA IMPROVEMENTS ST. JOSEPH, MN SEH No. ASTJOE 0405 R • PARCEL ID NO. PROPERTY DESCRIPTION OWNER OF RECORD • / 84.53472.038 Lot 6, Block 1 Cioverdele Estates Gary S. & Janet M. Roquette 84.53472.03f Lot 5, BtaCk 1 Cloverdale Estates Merman J. & Patfida L t3anpt 3 84.53472038 Lot 4, Block 1 Cloverdale Estates Herman J. & Patricia L Gangl 84.53472.035 Lot 3, Block 1 Cloverdale Estates Richard W. & Tamara L Schultz • 5 84.53472.033 Lot 1, Block 1 Cloverdale Estates Mlchael'P. & K. P k 84.53472.043 Lot 6, Block 2 Cloverdale Estates ,Stevan F. & Tamara F. Wilber 7 A p 4.53472.043 Lot 5, Blodc 2 Cloverdale Estates Steven F. & Tamers F. &Ferber ` • 9. 84.53472.042 Lot 4, Block 2 Cloverdale Estates Thomas E. & Alice Klein — ' 84.53472.041 Lot 3, Block 2 Cloverdale Estates Dean J. Landowski • 84. 53472.039 Lot 1, Block 2 Cloverdale Estates Thomas & Linde Gustafson _ -84 a Lot 2, Block 2 Cloverdale Estates Victor Aho / Z! r 84.53472.048 Lot 3, Block 3 Cloverdale Estates • Marvin J. & Carol J.R. Ailey I 84.53472.044 Lot 1. Block 3 Cloverdale Estate Tonya C. 2abinsklRidk Heid V 84.53433.700 1.78 Acres E 250' of N 310' of NW4NE4 Sec 15 • Maurice & Rite Palmersheim aC raoevww Estates Horne Owners lc 84.53533.105 Lot 88, Block 3 Graceview Estates ,Association T r 84.53533.1 OutlotA t3raceviery Estates Pond View Rid LIP �7 oI, d 7.53 S b I Outlet 8 Gracevtew Estates Plat Two Pond View Ridge LLP _ LiftSMOCirr l: r • TOTALS ?Lf? . TOTAL P. 2005 Cloverdale Area Improvements St. Joseph SEH A -STJOE 0405 Final Assessment - Worksheet 84- 53533 -105 Lot 88 BLock 3 Graceview Estates Graceview Estates Home Owners Association 22825 Fleetwood Drive St. Cloud, MN 56301 Rates — This section represents how the assessment for the above property is calculated. The left side of this section identifies the specific front footage of the property described above and how many units the property will be assessed for water and sewer. The right side of this section illustrates the rates that will be charged either per lineal foot or per unit. Street — Abutting Footage — Reconstruction Assessment Rates Per . Long Side Reconstruction Street (7th Avenue SE) $ 51.16 Lin Ft S hort Side 310.60 New Street (Callaway & Dale Street) $ 68.42 Lin Ft Street — Abutting Footage — New Short Side Curb & Gutter $ 13.87 Lin Ft Water Units 0.00 unit Sanitary Sewer $ 4,087.65 Unit Sewer Units 0.00 unit Water Main $ 4,173.17 Unit Assessment — This section represents the amount the property identified above will be assessed for the 2005 Cloverdale Area Improvement. This amount does not include connection fees or costs to extend the services from the street to your home. Street — Reconstruction $ 15,891.43 Street — New $ 0.00 Curb & Gutter $ 4,309.31 Sanitary Sewer $ 0.00 Sanitary Sewer — Oversize $ Water Main $ 0.00 Total Assessment (without connection fee) $ 20,200.74 2004 Connection Fees Sewer Inspection 100.00 Connection fees cannot be assessed over time. They SAC 2,000.00 must be paid at the City Offices before connection to Total Sewer $2,100.00 the municipal system. The connection fee does not include extending the line from the curb box to your Water Inspection 100.00 home. That cost is the responsibility of the Water Meter 85.00 homeowner and you can hire whom you choose. WAC 2,000.00 You are required to connect to both water and sewer Total Water $2,185.00 with 90 days of availability of service. Wells can be maintained for irrigation purposes only and separate Total Connection Fee (2004 Rates) $4,285.00 water connections must be maintained. • Cloverdale - - 18 - Subd. 2. Planned communities; common elements; condominiums; cooperatives. (a) The total value of planned community common elements, as defined in chapter 515B, including the value added as provided in this paragraph, must have the benefit of homestead treatment or other special classification if the unit in the planned community otherwise qualifies. The value of a planned community unit, as defined in chapter 515B, must be increased by the value added by the right to use any common elements in connection with the planned community. The common elements of the development must not be separately taxed. https: / /www.revisor.mn.gov /statutes / ?id= 273.124 7/6/2010 2009 Minnesota Statutes 51513.1 -105 SEPARATE TITLES AND TAXATION. (a) In a cooperative: (1) The unit owners' interests in units and their allocated interests are wholly personal property, unless the declaration provides that the interests are wholly real estate. The characterization of these interests as real or personal property shall not affect whether homestead exemptions or classifications apply. (2) The ownership interest in a unit which may be sold, conveyed, voluntarily or involuntarily encumbered, or otherwise transferred by a unit owner, is the right to possession of that unit under a proprietary lease coupled with the allocated interests of that unit, and the association's interest in that unit is not affected by the transaction. (b) In a condominium or planned community: (1) Each unit, and its allocated interest in the common elements, constitutes a separate parcel of real estate. (2) If there is any unit owner other than a declarant, each unit shall be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements. (c) A unit used for residential purposes together with not more than three units used for vehicular parking, and their common element interests, shall be treated as one parcel of real estate in determining whether homestead exemptions or classifications apply. History: 1993 c 222 art 1 s 5; 1994 c 388 art 4 s 3; 1997 c 84 art 1 s 5 https: / /www.revisor.mn.gov /statutes / ?id= 515B.1 -105 7/6/2010 DATE: 05/06 SECTION: 3330 PAGE: 1 TOWNHOUSES - COMMON AREAS - CONDOMINIUMS - COOPERATIVES The total value of Townhouse property, including the value added as provided in this paragraph, must have the benefit of homestead treatment or other special classification if the Townhouse otherwise qualifies. The value of Townhouse property must be increased by the value added by the right to use any common areas in connection with the Townhouse development. The common areas of the development must not be separately taxed. Condominium property qualifying as a homestead under Section 515A.1 -105 and property owned by a Cooperative Association that qualifies as a homestead must have the benefit of homestead treatment or other special classification if the Condominium or Cooperative Association property otherwise qualifies. If the Condominium, Townhouse or Cooperative Association property is owned by the occupant and used for the purposes of a homestead but is located upon land which is leased, that leased land must be valued and assessed as if it were homestead property within Class 1 if all of the following criteria are met: 1. The occupant is using the property as his permanent residence; 2. The occupant or the Cooperative Association is paying the ad valorem property taxes and any special assessments levied against the land and structure; 3. The occupant or the Cooperative Association has signed a land lease; and 4. The term of the land lease is at least 50 years, notwithstanding the fact that the amount of the rental payment may be renegotiated at shorter intervals. (M.S. 273.124, Subd. 2) 2009 Minnesota Statutes 429.071 SUPPLEMENTAL ASSESSMENTS; REASSESSMENT. Subdivision 1. Supplemental assessments. The council may make supplemental assessments to correct omissions, errors, or mistakes in the assessment relating to the total cost of the improvement or any other particular. A supplemental assessment shall be preceded by personal or mailed notice to the owner of each parcel included in the supplemental assessment and a hearing as provided for the original assessment. Subd. 2. Reassessment. When an assessment is, for any reason whatever, set aside by a court of competent jurisdiction as to any parcel or parcels of land, or in event the council finds that the assessment or any part thereof is excessive or determines on advice of the municipal attorney that the assessment or proposed assessment or any part thereof is or may be invalid for any reason, the council may, upon notice and hearing as provided for the original assessment, make a reassessment or a new assessment as to such parcel or parcels. Subd. 3. Reapportionment upon land division. When a tract of land against which a special assessment has been levied is thereafter divided or subdivided by plat or otherwise, the council may, on application of the owner of any part of the tract or on its own motion equitably apportion among the various lots or parcels in the tract all the installments of the assessment against the tract remaining unpaid and not then due if it determines that such apportionment will not materially impair collection of the unpaid balance of the original assessment against the tract. The council may, and if the special assessment has been pledged to the payment of improvement warrants shall, require the owner or owners, as a condition of such apportionment, to furnish a satisfactory surety bond fully protecting the municipality against any loss resulting from failure to pay any part of the reapportionment assessment when due. Notice of such apportionment and of the right to appeal shall be mailed to or personally served upon all owners of any part of the tract. Within 30 days after the mailing or service of the notice of such apportionment any such owner may appeal as provided in section 429.081. Subd. 4. Reassessment, tax- forfeited land. When a parcel of tax- forfeited land is returned to private ownership and the parcel is benefited by an improvement for which special assessments were canceled because of the forfeiture, the municipality that made the improvement may, upon notice and hearing as provided for the original assessment, make a reassessment or a new assessment as to the parcel in an amount equal to the amount remaining unpaid on the original assessment. History: 1953c398s7; 1957c366s1; 1961c525s8; 1965c877 1976c259s1 https: / /www.revisor.mn.gov /statutes/ ?id = 429.071 7/6/2010 _woes' " • 31-M— QLTT CIAIM DEED M uniform Conveyancing Blanks (1/15/97) Mpern3av s Co 0 St v.W, MN 851 - 42.1810 J Carymcco. pa,oasratrip or Limited Liabdtr Company m Cotppnooa. Parent$h p esi United Iiabilib Company No delinquent taxes and transfer entered; Certificate of Real Estate Value ( ) filed (X ) not required Certificate of Real Estate Value Nos. 1107528 / 04 A °P, 14 Pal O Z R 57 13 (1C 9 2 �t caL 5 OU s (� , A:.E i UNEHO EF HN by (rlf/lA(/J /' ►' JAY./J, , o Auditor DIA. := �G�CJP / nEPDTY DHOc'R Deputy LY �/ �" $` 5 . l a s DEED TAX DUE: $ 1 65 Date: 4/13/2004 (eserv5d for recadaa dam) FOR VALUABLE CONSIDERATION, +s .11 11 ; 11 • • _ fader s a tar • _ : a.acl: :n• a _____LIMICEnlialina.P.AMER SBI tmder the laws of. MTNNFSOTAL Grantor, hereby conveys end quitclaims to (112 ..VTIRW ESTATES MBUTNPRSASSOCIATIAN Grantee, a C. R M ATTCIN wader the laws of MiNNFSOTA real property in STI.ARNS County, Minnesota, described as follows: LOT 88, BLOCK 3, GRACEV'IEW ESTATES *TOTAL CONSIDERATION FOR THIS DEED IS LESS THAN 5300.00' together with all bereditacnents and appurtenances. eck box if applicable: LJ The Seller certifies that the seller does not know of any wells om the descrtbed real property. ❑ A wen disclosure certificate accompanies this document. ❑ I am familiar with the pnapetty described in this instrument and I certify that the amnis and number of welds on the descr real property have not changed since the last previously filed well disclosure certificate. POND VIEW RIDGE, I.I.P 4 /14/024 a13 848911881 DffD Ti ft PAID 1.65 � .�i � aa s: STATE OF MINNESOTA COUNTY OF SCR 5 (WRNRRAT PARTNPR This instrument was ac]mowlcdged before me on __ .. April 13, 2004 {Oats) by IMPART IfFltrRS _ and .. Aft WW1 the (:RNRRAI.PARTNFR and. C AT. RTNRR ofPf]Dtu Vlt•:W Pj7P A nillif a.Ta,Ii,TTYPAR - SIP a L1M1TFTl TrARTLC M4 TN PSMTP laws of "1 k 1.1., .01 onbebalfofthe t■lllt' e : t e. Y.ix: •11.11' � • 1 ' (onoaotzm MUM) trle PRIAhvaa orwouwiueucoaoT mlafaat PATRicaA L p C y+! NOTARY aC , Caeci bens if part sr an anise lend is Aaal Marc* 0 ~+ ' Taa Stamm for die tad properly sestets mdse immearas single / *COM. Es p. Jek a - be star eo Wade tame and address of Gnaws). CiRACEVIEW ESTATES HOMEOWNERS ASSOC. >'105aaauwprr WAS DRAT= NY Brwc AIM ADOA 22825 FLEETWOOD DRIVE ST. CLOUD, ]4A 56301 • HEARTLAND T1IL13, LLC - I l / 18 SOUTH 157E AVENUE d PO BOX 318 • ST CLOUD, MN 56302 - - - 0221024 — SCR - WARM& INUAMIONNOCCOPYINS anal PORN PROM ao § 1 -105. Separate Titles and Taxation., Unif.Common Interest Ownership Act (2008) § 1 -105 Collapse Prelim Uniform Laws Annotated Uniform Common Interest Ownership Act (2008) (Refs & Annos) [Article] 1 General Provisions [Part] 1 Definitions and Other General Provisions Unif.Common Interest Ownership Act (2008) § 1 -105 § 1 -105. Separate Titles and Taxation. Currentness (a) In a cooperative, unless the declaration provides that a unit owner's interest in a unit and its allocated interests is real estate for all purposes, that interest is personal property. [That interest is subject to the provisions of [insert reference to state homestead exemptions], even if it is personal property.] (b) In a condominium or planned community: (1) If there is any unit owner other than a declarant, each unit that has been created, together with its interest in the common elements, constitutes for all purposes a separate parcel of real estate. (2) If there is any unit owner other than a declarant, each unit must be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements for which a declarant has reserved no development rights. (c) Any portion of the common elements for which the declarant has reserved any development right must be separately taxed and assessed against the declarant, and the declarant alone is liable for payment of those taxes. (d) If there is no unit owner other than a declarant, the real estate comprising the common interest community may be taxed and assessed in any manner provided by law. Editors' Notes COMMENT 2009 Main Volume 1. Subsection (a) of this section follows the MRECA provisions. The classification of the unit and its allocated interests as real property or as personal property is significant for purposes of such matters as tenure, sales, recordation, transfer taxes, property taxes, estate and inheritance taxes, testate and intestate succession, mortgage lending, the perfection, priority and enforcement of liens, and rights of redemption. Subsection (a) resolves an important theoretical and practical issue which pervades the cooperative field: whether a unit owner in a cooperative holds an interest in real or in personal property. Subsection (a) permits the declarant to decide that WestlawNext 0 2010 Thomson Reuters. No claim to original U.S. Government Works. 1 § 1 -105. Separate Titles and Taxation., Unif.Common Interest Ownership Act (2008) § 1 -105 issue for each cooperative on a project -by- project basis. The issue arises from the fact that the unit owner's interest in the cooperative typically has elements of both real and personal property. His interest includes both a beneficial interest in the association - either through stock ownership or membership -which is clearly a personal property interest, and a long term "proprietary" or ownership interest under a proprietary lease in an apartment - clearly an interest in real estate. While this is in many ways a highly theoretical issue, it has many practical consequences. For example, if the unit owner's interest is a real estate interest, then that interest -aside from the association's interest -may be subject to real property taxes and conveyance taxes; the recording laws would apply to conveyance of those interests; and real estate foreclosure laws would apply to foreclosure of a lien against those interests. Moreover, a security interest in the unit owner's stock or membership certificate would not be effective against the stock without a security instrument being recorded on the land records. In general, none of Article 9 of the Uniform Commercial Code would be applicable to that interest, and all of the conveyancing rules would apply. On the other hand, if the interest is a personal property interest -the result required by this section in the absence of a provision in the declaration that the interest is real property-then all of Article 9 of the Uniform Commercial Code would apply to security interests in the unit, the real estate conveyancing rules would not apply, and the interest would be treated for all purposes as personal property. 2. This Act, of course, would apply in all respects regardless of the characterization of the unit owner's interests. Thus, for example, recording to the declaration is required, whether or not the owner's interest in a cooperative interest is real or personal property, because the cooperative itself is the real estate. 3. Whether an institutional lender may lawfully make loans on the unit owner's interest may or may not depend on whether that interest is characterized as real or personal property. That issue is not affected by this Act, however, but by other state law which may permit loans to be made by certain institutional lenders only if secured by an interest in real estate. 4. If a unit owner's interest is a real property interest, recordation of the proprietary lease in the land records is constructive notice of the unit owner's rights. If the unit owner's interest is a personal property interest, recordation of the lease in the land records would be ineffective as constructive notice of that interest, and Article 9 of the Uniform Commercial Code does not provide a mechanism for filing evidence of that ownership interest. It is likely, however, that holders of security interests in units which are personal property would adopt a procedure similar to that followed in Illinois with respect to land trusts, which have been held to be personal property in that State. Under Article 9 of the Uniform Commercial Code and Illinois common law, the secured party files notice of the lien and the lien is thereby perfected for five years, when it must be renewed. 5. Subsection (b) integrates the language of UCA and UPCA regarding condominiums and planned communities. A condominium or planned community may be created, by the recordation of a declaration, long before the first unit is conveyed. This happens frequently, for example, with existing rental apartment projects which are converted into either condominiums or planned communities. Subsection (d) spares the local taxing authorities from having to assess each unit separately until such time as the declarant begins conveying units, although separate assessment from the date the common interest community is created may be permitted under general state law, which permits or requires separate taxation of individual parcels of real estate. When separate tax assessments become mandatory under this section, the assessment for each unit must be based on the value of that individual unit, under whatever uniform assessment mechanism prevails in the State or locality. Importantly, no separate tax bill on the common elements is to be rendered to the association or the unit owners collectively, even though, in the context of planned communities, the common elements owned by the association might be subject to taxation as a separately owned parcel of real estate, in the absence of this provision. Any common element subject to development rights, however, must be separately assessed and taxed to the declarant, see subsection (c), in recognition of the independent economic value that those development rights have. This would be true even if the real estate subject to development rights is a part of the common interest community and lawfully "owned" by the unit owners in common, since the rights are in fact an asset of the declarant. 6. If there is any doubt in a particular State whether a unit occupied as a residential dwelling is entitled to treatment as any other residential single - family detached dwelling under the homestead status, this section should be modified to ensure that units are similarly treated. WestlawNexf D 2010 Thomson Reuters. No claim to original U.S. Government Works. 2 § 1 -105. Separate Titles and Taxation., Unif.Common Interest Ownership Act (2008) § 1 -105 7. Unlike the law of some States, this section imposes no limitations on the power of a jurisdiction to tax units based on the fair market value of the individual units, rather than on the project as a whole. In most jurisdictions, experience has shown that upon conversion of an apartment building to a common interest form of ownership, the fair market value of the units exceeds the fair market value of that building prior to conversion. Accordingly, a jurisdiction under this Act may impose real estate taxes on common interest community units which reflect the fair market value of those units in the same way that the jurisdiction taxes other forms of real estate. 8. Questions have arisen regarding the consequences of foreclosure of a tax lien on units or development rights in a common interest community. Under one theory, because real estate taxes are liens on real estate which have priority over all subordinate interests, foreclosure of the real estate tax lien on a unit could result in partial termination of the common interest community, and thus remove the unit from the common interest community. This result would follow if the tax lien were treated under Section 2- 118(1) as a "lien ... against a portion of the real estate comprising the common interest community [which] has priority over the declaration.... " Such a result, however, is inconsistent with the expectations of other unit owners in the complex. The appropriate result is that because, under this section, each parcel of real estate is a separate parcel for tax purposes, foreclosure of a tax lien on that parcel simply results in a sale or transfer of an interest in that parcel, as part of the common interest community, unless the parcel being foreclosed is withdrawable real estate. 9. It is also possible that a taxing authority may seek to foreclose on a declarant's development rights. Foreclosure of real estate taxes levied against withdrawable real estate, just as in the case of a foreclosure by a voluntary lienholder, may result in removal of that real estate from the common interest community; see Section 2-118(k). However, foreclosure of real estate owned by the declarant which has not yet been added to the common interest community will have no effect on the common interest community unless the taxing authority also acquires the development right to add that real estate to the common interest community. 10. Under Section 3- 104(c), of course, foreclosure of a tax lien for unpaid taxes levied against development rights would permit the taxing authority to take title to those development rights and exercise or transfer them as they could any other interest in real estate. However, development rights lapse pursuant to Section 2 -110 if they are not exercised within the time limit established by the declaration. This result, implicit under the Act, is expressly the law in some States. See, e.g., Conn. Gen. Stat. Section 47- 229(e). If development rights lapse when a tax lien against those rights exists under Section 1- 105(c), then whether or not those development rights apply to common elements which have previously been added to the common interest community makes no difference; the municipal lien holder is in no different position than a lender who holds a security interest in those development rights. Accordingly, while the tax lien itself would not be enforceable against the land it would continue to be the obligation of the declarant, as provided in the last clause of this subsection. Copr. (C) Thomson Reuters 2010. All rights reserved. Official Text and Comments Reproduced with Permission of the National Conference of Commissioners on Uniform State Laws. Current through 2009 Annual Meeting of the National Conference of Commissioners on Uniform State Laws End of Document C 2010 Thomson Reuters. No claim to original U.S. Government Works. WestlawNext' ® 2010 Thomson Reuters. No claim to original U.S. Government Works. 3 1 LAWS of MINNESOTA for 2010 Ch. 279 CHAPTER 279 — H.F.No. 2231 An act relating to transportation; allowing road authorities to remove snow from certain roads in uncompleted subdivisions; amending Minnesota Statutes 2008, section 160.21, by adding a subdivision. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 2008, section 160.21, is amended by adding a subdivision to read: Subd. 6. Uncompleted subdivisions. (a) A road authority, including a statutory or home rule charter city may remove snow from unopened or private roads in uncompleted subdivisions containin : five or more lots u . .11 ado 'flan of an annual resolution findin that the subdivision developer, due to general insolvency or pending foreclosure, is unable to maintain the roads and that public safety may be jeopardized if the access of school buses, public works vehicles, or authorized emergency vehicles, as defined in section 169.011, subdivision 3, is obstructed. Snow removal activities are limited to streets reasonably necessary for access by these buses or vehicles. (b) Snow removal under this subdivision does not constitute: (1) acceptance of the road from the developer by the road authori ty for public use; (2) the opening of the road to public use; nor (3) a use, repair, or maintenance of the road sufficient for the purposes of dedication of roads under section 160.05. (c) The road authority may impose a reasonable and proportionate charge on all properties within the subdivision for services provided under this subdivision. These charges, if unpaid, may constitute a lien upon the ' . ' - i - within the subdivision and may be collected as a special assessment as provided by secti ( n 492.101 o by charter. f:-/0/ (d) Where a road has been maintained pursuant to —„— subdivision, the Tar' authority with jurisdiction over the road, and its officers and employees, are exempt from liability for any tort claim for injury to person or property arising from plowing, maintainin or otherwise working on the road and from traveling on the road and related to its maintenance or condition. This paragraph does not apply to a claim for injury that is affirmatively caused by a negligent act of the road authority or its officers and employees. (e) This subdivision expires May 2, 2013. EFFECTIVE DATE. This section is effective the day following final enactment. Presented to the governor April 22, 2010 Signed by the governor April 26, 2010, 5:17 p.m. Copyright ® 2010 by the Office of the Revisor of Statutes, State of Minnesota All Rights Reserved.