REPORTS TO THE BOARD AT THE JULY, 2008 QUARTERLY MEETING:
What is required for POATRI to sell the resort/lodge facility?
The first step would be to comply with state law. The second step would require compliance with the Protective Covenants and Use Restrictions (“Protective Covenants”) Terramar placed on the resort/lodge facility (“the lodge”) when Terramar transferred ownership of the lodge to POATRI.
1. What does Texas law require?
Art. 1396-5.09 A of the Texas Non-Profit Corporation Act ultimately requires the approval of 2/3’s of the Members in Good Standing (“MIGS”) who attend an annual members or special members meeting with at least 10% of all MIGS in attendance so there is a quorum present when the vote is taken. However, first the Board must pass a resolution to sell the lodge. Notice of the resolution and of the meeting is then sent out to the Membership. Approval to sell would require 2/3’s approval of those MIGS who attend the members meeting where the issue is voted on. But, there must be at least 10% of all MIGS in attendance at the meeting so there is a quorum. If there is not a quorum present at the meeting (ie; at least 10% of all MIGS), there cannot be a valid vote on the issue.
2. What do the Protective Covenants require?
The Protective Covenants were put in place by Terramar and run for a term of 35 years. The 35th anniversary is November 30, 2011. If the Protective Covenants are not terminated by that date, the Protective Covenants renew for 10 years and will continue to do so ad infinitum until terminated.
How are the Protective Covenants terminated? A document signed as is specified in and required by the Protective Covenants and filed with the Brewster County Clerk’s office prior to the renewal date will terminate the Protective Covenants on the anniversary date. How many signatures are required? The Protective Covenants require the signatures of the owners of 51% of the land, made up of the owners of the lodge (ie; POATRI), all property on Terlingua Ranch, and all property to which Terramar held legal or equitable title, which would include all former Hunt Parks on Terlingua Ranch. The Protective Covenants attach to the land, “run with the land”, and exist regardless of who the actual owner of the lodge may be. And, it is very important to note that the Protective Covenants do not require 51% approval of the property owners or of the MIGS; rather, termination would require approval of the owners who own at least 51% of the property included in the definition provided in the Protective Covenants. This same level of participation by owners of the land would be required to amend the Protective Covenants to allow for a termination before or after the 35th anniversary or to sell only a portion of the lodge facility or for any other amendment to the Protective Covenants.
Summary of Succession Planning Task Force Progress -- July 26, 2008
At the April 26, 2008 Board of Directors Meeting, the Succession Planning Task Force presented its initial report. That report described the need for a Succession Plan and/or
procedure for the Board of Directors to implement in the hiring of a General Manager.
The Task Force has completed the logistics of the procedure and it has been presented to the Board of Directors for their approval.
One of the main steps involved in the procedure is the creation of a General Manager Selection Committee to implement the procedure. After careful consideration and discussion, the Board of Directors have made the determination that the Executive Committee will serve as the General Manager Selection Committee if and when the need arises.
Respectfully submitted,
Succession Planning Task Force
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