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Subject: Has anyone ever had experience in disolving an Association?

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KarenT
(Washington)

Posts:57

01/25/2008 8:39 AM
Our Association has a large common area, 8,000+ sq. ft., swales outside the subdivision on county property which our CCR's require the association maintain which are approximately 2000+- sq. ft.,a private road and fence around the preimeter. One house in the subdivision controls the sprinkler system for the entire common area and swales. Our major expense is lawn care to include sprinkler repairs and maintenance. Other expenses are minimal, taxes, insurance, snow removal, fence repairs, etc... We've had a request by only one homeowner (who is the only howmeonwer one who has NEVER attended any meeting or paid their dues on time and now have been turned over to an attorney for collection) to disolve the association. Our annual meeting is coming up sometime in February and I would appreciate any information, thoughts or advice from anyone regarding the reasons why we should not disolve the association. I'm sure the majority will rule and it will not be disolved. Who would maintain the common area and the private road??? Thanks!

SusanW1
(Michigan)

Posts:2316

01/25/2008 10:06 AM
To "dissolve" the association would take a vote of your members. Look in your Articles of Incorporation. There should be a section in there about how to dissolve. If done, after that, the associaton would simply cease to perform its mission. But since your association has OBLIGATIONS, you can not dissolve so easily. your Board needs to clarify the mission of the Association and be sure every member understands what their "membership" means - benefits and liabilities.

DonnaS
(Tennessee)

Posts:2951

01/25/2008 10:21 AM
Susan has told you to look in your Articles of Inc and there it might state that you might not have an ability to dissolve the corp. The State has the Articles of Inc for Not for Profit corps in your State and that would give you your allowances for dissolution if indeed you could get the vote of your membership. Which I would bet that you could not. You have so much common area to rid the association of and it cannot just be ignored and tossed aside. A better solution would be to get yourself involved in a rstructure if you are unhappy with things now.

JC3

Posts:290

01/25/2008 11:16 AM
Give the common area, the fence, and the perimeter road (ALL roads or streets)to the county and or city. If they don't want the fence, dismantle it, recycle it, offer it to charitable organizations or whoever might want it. What kind of fence is it? OFfer sections of it through freecycle. If the accepting agency wants the sprinkleer system, redo the plumbing so it is that agency's, no longer the homeowner's. If you dissolve, you would not have insurance or the other items to handle, either. Are your streets private or city? Turn them over to the city too. Ask the city/county how to do that.

KevinH
(Texas)

Posts:53

01/25/2008 4:11 PM
If the association is responsible for any amount of property, the first road block starts there: What to do with it. This includes greenbelts, parking areas, roads, buildings, etc. If the homeowners dissolve the association and neglect the property, most likely the city will come in and levy a tax or other measures on the homeowners responsible for that property (former HOA) to keep it maintained. Trust me, you don't want this. If any homeowner thinks the HOA dues are bad, wait till the city slams them with the bill for that. It will trump any HOA dues by far. Unless the property in question has value that city or county could benefit from, they will not likely take it. If the city/county doesn't want it, you would have to find someone who would, or consider selling off portions to each homeowner (tons of paperwork and legal sorting to do there). I have heard that it may be possible to work with the city on a solution that involves identifying a management company of your choice prior to dissolving the HOA to manage just the property afterwards. The company would still be paid by the homeowners (though less certain if it is done as direct billing or a city tax), but you only are paying for the property management, not all the other headaches involved with an HOA. Whatever method used to dissolve the HOA, the CC&Rs, also known as the deed restrictions, remain present. Any homeowner (or group of homeowners) could take another homeowner to JP court for failing to abide to the deed restrictions that are part of those properties that were once part of the HOA. So does it really dissolve? I guess that's for you, your board, and the disgruntled homeowner to debate. This is what I have learned in my own search on how to dissolve an HOA over the past 3 years. It really makes you think before buying a property that is part of one.

If you cannot see the forest for the trees, back up and get a better view. Don't start to clear a path while still blind.

DonnaS
(Tennessee)

Posts:2951

01/25/2008 4:58 PM
JC3, Your statement to give the common area to the city or county really makes me wonder where you live. You would have a hard time finding any county or city, eager to assume more financial responsibility than they already have unless they are going to get some payoff to make it worth their while. Common area inside associations is not something that they want to assume ownership of. I think that a disgruntled homeowner would do better for her association and her unhappiness by taking on some responsibility and see if she can change things for the better. I really think that a dissolution of the association is going at this all wrong and she stated that there wasn't any support to do this.

BrianB
(California)

Posts:1748

02/07/2008 9:28 PM
kevin and donna are right... most cities/counties will not accept the "donation" of the common lands, and if they do, be prepared for a huge special assessment and tax bill for the upkeep, every year. you likely cannot sell the land easily, because (in our case at least), the land is DEED RESTRICTED to be used for common area. even if you sell it, the only thing a buyer can do with it is leave it alone, and besides the nature conservancy, who buys land and does nothing with it? you cannot build on it, you cannot alter it, you cannot do anything to it but leave it as retention basin, common area, green belt, buffer, etc..

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