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Bayside September Founder Update

Dear Bayside Community Homeowners,

We hope you had a wonderful summer with family and friends and are looking forward to the fall season. Please see below for the monthly Founder updates:

REMINDER September Training Session – First Announced in May Educational Training Session: Roles & Responsibilities of HOA Board Members

In May 2024 we integrated a Calendar into our website to provide convenient access to upcoming Association meetings, Founder led training sessions, and other important dates related to the Bayside Founders and our ongoing transition of the community. This is a reminder to please join us on Thursday, September 19, 2024, from 10:00 am to 12:00 pm for an informational training session led by Raymond Burke, Attorney at Gordon Feinblatt, LLC. This session will provide in-depth insights into the roles and responsibilities of HOA Board Members, highlighting the importance of active participation and a clear understanding of what it means to serve on the Board. In-person attendees will be entered to win a $100 Bayside Gift Card and more prizes! Click the button below to register via zoom or in-person.

1st HOA Transition Training Session – Survey Results

In the previous Founder update, we included a survey about the “Best Practices of an HOA Transition” Training Session. Click the button below to view the key takeaways from the session.

Bayside Town Hall & Board Meeting Overview

At the Bayside Town Hall in late July and the Board meeting in August, several topics related to the Founder and its affiliates were discussed. Below is a summary of the key areas of discussion:

  • The Fassett House Inn & SpaThere was a request for an update on the construction and development of the hotel. Beacon Hospitality, which owns The Fassett Inn & Spa site, is experiencing unforeseen delays in construction. For the latest updates, please click here to receive information directly from The Fassett House Inn & Spa.
  • Land on Route 54 & W Sand Cove RdThere was an inquiry about whether the Founder has purchased additional land on Route 54 and W Sand Cove Rd and if there are plans for its development or annexation into Bayside. At this time, the Founder does not have any plans to add additional land to the community, though the Master Plan and the Charter allow the Founder to annex additional units into the community through March 1, 2030.
  • Townhome RoofsDuring the Town Hall, the townhome roof program was brought up and revisited. For more information, please refer to our previous Bayside Updates here. At the Board meeting, it was decided that a vote to reinstate the program will not be conducted because the 67% approval threshold is likely unattainable as indicated by the results from the prior homeowner vote conducted in March 2022. Consequently, the Board plans to finalize a detailed scope of work, which will serve as a guideline for the Design Review Committee (DRC) in approving future individual roof replacements.
  • North Haven RoundaboutThe Safety/Security Committee has submitted a request to the Board concerning the North Haven Roundabout. They have asked that the Board formally request the Founder to commission an independent engineering assessment of the roundabout and implement any recommended modifications. The primary concern raised by the Committee is the distance to the sidewalk from the roundabout, and they recommended relocating it farther from the roundabout.

    The Founder has met and collaborated with the Safety/Security Committee to review and discuss the scope of the requested changes and has dedicated considerable time and effort to listen to and address these concerns. The Founder, at its own cost, has agreed to install additional signage and crosswalks near the roundabout in response to the Committee’s concerns. However, it is important to note that the roundabout was constructed according to the approved plans, was inspected and accepted by Sussex County, and meets all relevant codes and safety regulations, including ADA compliance so further modifications are not warranted at this time.

  • Independent Transition CommitteeIn 2021, the concept of an Independent Transition Committee Resolution was introduced, which would have delegated full transition authority to two Owner Elected Directors. At the time, Josh Mastrangelo, Senior Vice President for the Freeman Companies and former HOA Board President, explained the rationale behind the Independent Transition Committee in an official Developer Update dated February 3, 2021:

    "The decision-making Transition Committee would be comprised of all non-developer members of the Board of Directors. They may retain experts in law, finance, and engineering, as well as consult with volunteers from across the community to advise on all matters pertaining to your interests to achieve a fair and equitable transition. This committee will act independently from the Board and will not include any developer representation. This newly proposed transition process is guided by Delaware law as well as industry-recognized best practices recommended by the Community Association Institute. It delegates all Board power related to the transition to the Owner Elected Directors and effectively eliminates the developer’s majority Board control over transition matters on behalf of the Association. We believe this is the only way to move forward with this process."

    However, this Resolution was never adopted by the HOA Board, as several residents were opposed, and it did not receive full support from the Board Members at that time – well in advance of Board turnover as required in the Charter when such an independent committee would have been most effective. Despite this, in 2023, Owner Elected Directors David Chun and Dave Williams revisited the idea despite their previous opposition to the proposal, recommending the formation of an Independent Transition Committee composed just themselves, the two Owner Elected Directors. This proposal closely mirrored the one from 2020, which had the support of the Founder-appointed Board Members at the time.

    Since the transition meeting on February 29th between the Founder and the Owner Directors, and the ongoing transition meetings between the Founder, the Owner Directors and Homeowner-led Committees, nearly all 20 items on the Owner Directors’ transition list have been resolved without needing to delegate authority to just two individuals as the Founder Directors have deferred to the recommendations of the Owner Directors that have arisen from those discussions. At this stage, establishing an Independent Transition Committee seems counterproductive, given the progress achieved through the close collaboration of the Founder, the Owner Directors, and the Homeowner-led Committees, which continue to meet as part of the community transition. This transition will culminate in Board turnover, with at least two additional Owner Directors being appointed with terms commencing at the beginning of 2025.

    At the April 2024 Board Meeting, this topic was revisited. The Founder Appointed Directors opposed the motion, stating that the reasons for denying the proposal in 2023 still hold true today, and that this proposal would remove authority from the two incoming Directors just a few months prior to joining the Board. However, the Founder Appointed Directors continue to support the Owner Elected Directors in leading discussions on final transition-related matters with the Founder. Additionally, they endorsed the establishment of an advisory Transition Committee composed of homeowners to assist the Owner Elected Directors in these discussions, and the use of Association funds to engage resources to support transition related efforts, including the hiring of Bob Valihura to represent the Association in such matters.

Meeting with Homeowner-led Groups and Committees

On August 21st, Carl M. Freeman Companies spent half a day meeting with various homeowners and groups to discuss the following:

  • Street Drainage Concerns
    Most of the six areas of concern that were raised have been under HOA management for ten years or longer. In some cases, the Founder has overseen modifications and repairs, including changes at Hydrangea Park (which were walked on the May 1st meeting between the Founder and various homeowner representatives) that were accepted by Sussex County in 2022. Note that except for Coastal Crossing Phase 2 which is currently under construction, all roads have been accepted by Sussex County and any associated bonds have been released. Nevertheless, the Founder engaged engineering consultants (GMB) to further understand these issues, and those conclusions were presented to the Owner Directors, Legum & Norman, homeowners and members of the GOC for discussion on August 21st. The engineers from GMB have provided additional construction detail and working on additional engineering plans to provide to the Association. The Founder has agreed to meet again with appropriate homeowner members from that group after they have determined a preferred path forward.
  • The Potential for Simplifying the Covenant to Share CostsSince the May 1st meeting and walk of the community, the Founder has been collaborating with the Shared Area Working Group (SAWG) and Owner Directors to simplify the Covenant to Share Costs (CTS) for Bayside. After several thorough discussions, including the property walk on May 1st, it was agreed that simplification would benefit all stakeholders. The agreed upon framework to achieve this objective involves more closely aligning land ownership with the party that primarily uses and benefits from it.

    Key changes proposed by the Founder included:

    • The Founder will take back ownership, maintenance and management of certain parking lots in the Town Center, reducing the Association’s administrative, reporting and financial responsibilities considerably, as the SAWG requested on May 1st.
    • The General Shared Area and the Association's contribution to the General Shared Area will be reduced, resulting in additional cost savings.
    • Certain stormwater management ponds will be reallocated based on their ownership and primary function, which will further clarify obligations following the Association’s decision to eliminate the “Shared Pond” framework at the end of 2023.

    Additionally, the Founder offered to deed the West Sand Cove parcel with the trash compactors and storage shed, as well as the parcel including the dog park to the Association, clarifying insurance and maintenance responsibilities there, and requested again that the Access and Indemnity Agreement for the Commons dumpster installation that was negotiated between the Founder and Owner Directors in 2023 be approved and fully executed by the Board.

    These adjustments aim to streamline operations, reduce costs, and better align responsibilities within Bayside.

  • Reserve Funding LevelsSince the beginning of the year, the Founder has actively engaged with the Owner Directors and the Finance Committee to address concerns regarding the reserve funding levels. However, despite four years of negotiations on this issue, the Owner Directors and the Finance Committee recently increased their funding request by over 300% to a level that had not been previously contemplated. The Founder remains confident in its interpretation of the law and the requirements outlined in the Charter with regard to reserve funding and has consistently met those obligations throughout the community's development—including providing nearly $700,000 in subsidies to the Association over the years. The Founder believes the Association is financially sound, with well-funded reserve accounts and healthy fund balances / operating reserves, with financial oversight provided by owner-led committees for the past 5+ years.

    Nevertheless, the Founder has agreed to review the 2024 reserve study upon its completion in early September and will continue to meet with the Owner Directors and Finance Committee to work toward an amicable resolution to their request on this issue.

Bayside Sales Update

We are excited to announce that only one villa remains available in Coastal Crossing. Schell Brothers will begin construction on this spec home this month, with all design selections already curated and available for viewing in their “Look Book.”

For sales inquiries, please reach out to Rosemary Wehberg, Community Sales Manager, at [email protected].

We’ll keep you informed as we move through the final phase of our transition. For more details, please visit the Bayside Founder website.

Live Bayside,

Carl M. Freeman Companies

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