NuGrape Lofts HOA Policy

Policy Scope

Definitions

Common Elements – Those portions of the property subject to the Declaration which are not included within the boundaries of a Unit, as more particularly defined in the Declaration.

Limited Common Elements – A portion of the Common Elements reserved for the exclusive use of those entitled to occupy one (1) or more, but less than all, Units, as defined in the Declaration.

Allocation – the process of determining to which Unit(s) an element will be assigned. The process is considered complete when the “winning” Unit(s) remits payment in-full (check clears) by the specified due date/time.

Assignment – the end-to-end process of converting a Common Element (not previously assigned) to a Limited Common Element. The process includes (A) acknowledging the application for exclusive use by one or more Unit(s) (an outcome of the Allocation process), (B) preparing an amendment to the Declaration with notarized signatures, and (C) recording the amendment with Fulton County. Also known as Conversion. The process is considered complete, and the element considered a Limited Common Element when all steps are complete.

Property Types

This policy covers the following areas:

• Allocation and Assignment of Common Element parking spaces within the west parking lot on NuGrape property.
• Allocation and Assignment of Common Element storage closets on NuGrape property.

Allocation Methods

Assignment of a Common Element as a Limited Common Element must be preceded by an Auction allocation process. 

Out of Scope

This policy does not include Common Element license allocation of the aforementioned scope areas. See NuGrape Common Element License Allocation Policy.

Background

The Board may decide, at any time, to place an unassigned portion of the Common Elements up for sale. Once fully allocated and assigned, including registered with Fulton County, the area will become a Limited Common Element of the Unit to which it is assigned.

Guiding Principles

The Board shall be unbiased in the development, oversight, and administration of the process. The process shall facilitate fair allocation to eligible Owners who choose to participate. 

Resolutions

The resolutions passed and approved by the Board related to this policy include the following:

1. Equal Opportunity Allocation for All Eligible Owners at Market Rate –
   1. The NuGrape Lofts Condominium Board of Directors shall not approve assignment of a Common Element parking space or storage area, without first formally executing an auction allocation process, available to all eligible Owners based on market rate.
2. See 2023 Board Resolutions.

Administration

The property management company shall own the management and execution of the allocation process to ensure objectivity.

• The Board shall not be part of the offering communication.
• Sealed Bid First Price (SBFP) auctions:
  • The Board shall not have insight into sealed bids until after the Owner has accepted the offer and payment has been completed.
• English auctions:
  • Owners shall have insight into bid amounts.
  • Some Owners may choose to remain anonymous throughout the auction process but shall remain confidential to the management company. The Board shall not have insight into bidder details and anonymous bidders until after the auction end date/time.
• The Board may be consulted by the management company during the allocation process as long as the bid(s) remain confidential to the management company.

To secure the integrity of the allocation and assignment processes, the Unit which won, accepted the offer, and completed payment shall be the Unit specified on the Amendment to the Declaration. 

• This means that until the allocation and assignment processes are complete, paid, and parking space is recorded with Fulton County, neither the Board nor the Owner(s) who holds the Offer shall be permitted to reassign the Offer or parking space to any other Party or Unit unless specified in this Policy.

Eligibility

An Owner of a Unit shall be ineligible for the allocation if at the date/time the allocation process commences there is a balance on the Unit account which is 30 or more days past due. Ineligible Owners shall be notified in writing as such.

Notification

• All owners shall be notified via written notice of an element going up for sale.
• The allocation notice must include the following:
  • Total number of elements to be allocated and assigned.
  • Property Type and description of each item to be allocated and assigned.
  • Description of allocation process.
  • Starting Price and expected fees required for managing the allocation process and declaration updates.
  • Expected date the allocation offer will commence including both the planned end date/time of the auction and the payment due date.
  • Link to request a copy of the results.
• Commencement of the allocation process shall not be less than 21 days after the day the notice is sent out; known as the Notification Period.
• Owners may request a copy of the results to be shared once the allocation process concludes.

Price:  Starting Bid

The Board shall establish the starting price based on local fair market value and comparables.

Local fair market value and comparables is derived from the valuation and pricing of similar element types outside of NuGrape property.

The winning bid does not include management fees nor fees to complete the assignment process. The expected fees required for managing the allocation and assignment processes shall be disclosed in the allocation notification. 

Multiple elements to allocate back-to-back

The allocation process shall occur sequentially one element at a time – allocate and complete the allocation process for one element before commencing the allocation process for another element. Once one allocation process is complete, including payment, the assignment process for the completed allocation can occur while at the same time, the next allocation process begins.

Auction Configuration

The property management company shall have access to a publicly available online auction tool to administer and manage an online auction.

• Auction Style – The auction styles the Board may choose from are:
  • Sealed Bid First Price auction (SBFP)
  • Open Ascending auction (English)
• Number of Items per Auction – Each auction shall be for one (1) specific element.
• Starting Price – A starting price shall be established by the Board for every auction. The starting price should ideally be based on market price for the type of element. The item shall not be allocated if the starting price is not met or exceeded. The starting price shall be disclosed in the notification.
• Bid Increment – A minimum bid increment above the highest bid may be established and, if so, shall be disclosed in the notification.
• Start Date/Time – the auction shall automatically start at the specified start date/time. The start date/time must be at least 21 days after the Notification Period starts. The expected date the allocation offer will commence shall be disclosed in the notification.
• End Date/Time – the auction shall automatically end. The end date of the auction shall be set between 2 to 5 days after the start date. The end time shall be between 5:00 PM and 10:00 PM Eastern Time on the end date.  The planned end date/time shall be disclosed in the notification.
• Anonymous Bids – bidders in an English auction may choose to remain anonymous; bidders in an SBFP auction are automatically anonymous. As such, all bidders must use the email address on file with the management company.

Allocation Execution

On the predetermined date/time the allocation process commences, an online auction tool will be used to accept bids from Owners who have registered to bid. Bidders may submit one or more bids throughout the auction window. In an English auction, registered bidder names are shared during the auction unless if the bidder wants to remain anonymous. For SBFP auctions, all bidder details (name, email, etc.), bid price and bid status are not shared with other bidders. The highest bidding eligible Owner is the winner. Regardless of the registered bidder name and anonymous bidder settings, the email address of the bidder is never shown to other bidders. The bidder email address must match an owner email address on-file with the management company.

• The Owner(s) of the Unit represented as the winning bid shall be notified by the management company by email with “the Offer”
  • All bids are sorted in order of highest bid amount to lowest bid amount.
  • The winning bidder is the highest bid from an eligible Owner when the auction ended. If two or more bidders have the same bid amount, the submission date/time in order of earliest to latest is used to rank the tied bids.
  • If the Owner of a Unit account is ineligible, their bid is invalidated, and the process moves to the next highest bidding Unit as a second chance offer.
• “Second Chance Offers” may be made to participating eligible Owners if a winning bidder cannot fulfill the obligations or timeline of the allocation process.
  • Second Chance Offers are made to the next bidder in order of highest to lowest bid.
  • If a bidder is eligible for a Second Chance Offer, the offer shall be made at the second chance bidder’s bid.
• The management company shall immediately begin the payment steps for the winning bidder. The winning bidder shall pay through their HOA account and not through the auction tool.

 

Payment

• The management company shall record the Date of Acceptance:
  • The Date of Acceptance for the auction process is the date and time the auction ends.
• The management company shall specifically assess the HOA account of the winning Unit with the total due within one (1) business day of the Date of Acceptance.
  • The total due shall include: the price of the element, the expected total cost of legal expenses, the expected total cost of allocation management, the expected cost of notary services, the expected cost of recordation, and any other reasonable fee incurred as part of the allocation process.
  • Because this process generally requires relatively immediate payment or the possibility of removal of the offer if the payment is not fulfilled as described herein, late fees and interest do not apply.
• The Owner shall remit payment in full to the management company no later than 5:00 PM on the 14^th calendar day after the Date of Acceptance, the Payment Due Date/Time.
  • When paying by check, the check must be received AND clear the bank before the Payment Due Date/Time.
  • If payment is not made in-full and complete by the Payment Due Date/Time, the Offer is rescinded and void.
    • The management company shall refund/return all partial payments to the Owner of the winning unit.
    • The management company shall specifically assess the refund fees (total) to the Owner of the winning unit.
    • The process moves to the next highest bidding Unit as a second chance offer.
  • After payment is received in full, the management company shall notify the Board and all Owners of the successful outcome of the allocation process within 3 business days of payment received.

Assignment Execution

• Once the parking space has been successfully allocated, other relevant documentation shall be updated within a reasonable amount of time.
• In accordance with the Declaration, the BOD shall prepare an amendment to the Declaration with the parking space assignment, the cost of preparation shall be included with the pre-payment of the parking space.
• The recordation of the Declaration amendment with Fulton County shall constitute official assignment of the parking space.