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WinstonH2
(Arizona)

Posts:11

04/05/2008 1:07 PM
Our very small (26) lot subdivision in Queen Creek, prefers to legally dissolve our hoa. We do not have enough people willing to serve on the board, etc. Our CC&Rs are very restrictive; i.e., we're limited on what we can charge for annual fees and special assessments -- requires a vote of 75% (and vote of 75% to change the CC&Rs. The fees raised are not sufficient to hire someone to keep up common areas (very small, narrow perimeter areas) and few homeowners are interested in keeping up the common areas. We have overwhelming support to dissolve the hoa. Our documents allow it with a 75% vote. What else must we be concerned about? If we vote to dissolve, what else do we need to do? Need help fast! Thanks! AHughes

HaroldS
(Arizona)

Posts:904

04/05/2008 3:40 PM
What will happen to your common area? That is the real bugaboo. Sounds too small to be a mandated retention basin which are impossible to get rid of. Are you in an incorporated area? Will they or perhaps the county take over the maintenance? 75% to disband sounds low. Good luck! Harold

RobertR1
(South Carolina)

Posts:2525

04/05/2008 3:45 PM
Winston, If you have the power to dissolve your association under state law, and want to do it, hire a lawyer and pay him to make it happen. I suspect the only way to solve your problems is for someonee to offer you a more expensive alternative to dissolving the association. I doubt anyone can led you through it and don't be surprised if you find it to be expensive and time consuming. If no one in the associoations is going to do the work necessary at the association level, the lawyer will probably take the job at so much/hour, in addition to other fees and charges. If anyowner objects I would think you will have a challenge in court, no matter what your documents say. Keep a low profile and shoot for a quick clean break.

BrianB
(California)

Posts:1748

04/05/2008 9:11 PM
yes, you can dissolve. One thing you need is to get some entity to agree to own and maintain the common area. Perhaps the city will do that for you, and only charge your neighborhood around $1200/month for the service. Do you pay for streetlights now? If so, expect to continue when the city takes over, only expect a service charge for the "effort" of the city to manage it. Other than that, if you own no other common areas (water retention basins (how did your developer manage to not have those imposed?), and you have no watering systems for landscaping, no roads or sidewalks that are the HOA's, you stand a chance to dissolve. Just get someone to own that common land, pay the taxes, liability insurance, maintenance, etc on it, and you are golden.

RobertR1
(South Carolina)

Posts:2525

04/06/2008 5:31 AM
See ((((( ))))) Our very small (26) lot subdivision in Queen Creek ((((((What is this? Are you part of another association such as a POA? If you are they might want to take over your common property. At a cost to your members, maybe even a monthly fee. Also if Queen Creek has any vested interest in your subdivision, you will have to satisfy that interest.))))))))))))))))))))) prefers to legally dissolve our hoa. We do not have enough people willing to serve on the board, etc. Our CC&Rs are very restrictive; i.e., we're limited on what we can charge for annual fees and special assessments -- requires a vote of 75% (and vote of 75% to change the CC&Rs. The fees raised are not sufficient to hire someone to keep up common areas (very small, narrow perimeter areas) and few homeowners are interested in keeping up the common areas. We have overwhelming support to dissolve the hoa. Our documents allow it with a 75% vote. What else must we be concerned about? If we vote to dissolve, what else do we need to do? Need help fast! Thanks!

BrianB
(California)

Posts:1748

04/06/2008 7:43 AM
fyi robert, Queen Creek is the name of a small community in the south and east of the Phoenix Valley. It is an incorporated city, i believe, a suburb of Phoenix. I only know that because i lived in Phoenix for twelve plus years, and went to Queen Creek daily for work.

RobertR1
(South Carolina)

Posts:2525

04/06/2008 8:23 AM
If Queen Creek is Incorporated and this HOA is a part of the city, then the Association is there because the city allowed it to be there. So, you might be able to get the city to annex the Real Property of the HOA and dissolve their control over the HOA. In any event, you better check with the city fathers and seek their advice. IMHO

JC3

Posts:290

04/06/2008 10:57 AM
Please keep us informed of the steps and your progress.

WinstonH2
(Arizona)

Posts:11

04/06/2008 4:25 PM
Thanks for your response. Queen Creek is an incorporated town southeast of Phoenix. Our common areas consist of narrow "buffers" around the perimiter of the property which was required by the Town because we are an equestrian subdivision. We do not maintain any lights, streets, etc. We have talked with the Town about taking over the 'buffer' areas to be made part of the Towns 'equestrian trail' system. That's still 'up in the air.' The north and south buffers are about 8 feet wide along highway/street rights of way.

WinstonH2
(Arizona)

Posts:11

04/06/2008 4:25 PM
Thanks for your response. Queen Creek is an incorporated town southeast of Phoenix. Our common areas consist of narrow "buffers" around the perimiter of the property which was required by the Town because we are an equestrian subdivision. We do not maintain any lights, streets, etc. We have talked with the Town about taking over the 'buffer' areas to be made part of the Towns 'equestrian trail' system. That's still 'up in the air.' The north and south buffers are about 8 feet wide along highway/street rights of way.

WinstonH2
(Arizona)

Posts:11

04/06/2008 4:53 PM
We've been working with the Town in an effort to get them to take over our common areas which consist only of narrow 'buffer' areas. They were originally designed to be equestrian trails around and through the subdivision. The issue is complicated because when the subdivision was completed in about 2000, the developer 'left the scene' (around 2001 or so) without turning over the HOA to the homeowners. He also left before some of the planned work was completed. He left drainage issues unresolved, fencing incomplete, etc. He did install landscaping and a drip watering system in the common areas, but they have not been maintained in 7+ years. Most of the plant material has died. The developer did not, of course, leave with any homeowners any documents or records concerning the HOA, although the appropriate documents were filed with the County. Early last year, a group of homeowners contacted an HOA attorney in an effort to get the HOA going. We had an annual meeting, elected a board, etc. It was necessary to reincorporate, have by-laws and Articles of Incorporation written, etc. The attorney did all of that, but his fees took about 75% of the first year's annual dues. We sent out notices of annual dues ($280 per year). While there were sufficient votes at the annual meeting to reincorporate, a large number of the homeowners have fought the HOA all year. It took all year to collect some of the dues -- after large late fees and threats of liens, etc. We also found that the taxes had not been paid on the common areas. They, in fact, had never been turned over to the HOA, but we were able to track down a former principal with the developer who signed a Quit Claim deed for the common areas. We then found the common areas had never been combined into one parcel, which we were able to do. However, there are back taxes going back to the early 2000s that must be paid -- almost $4,000 -- which the HOA can not afford. As the board attempted to get estimates to repair the common areas, we found that our annual budget will never generate enough cash to repair the watering system and to replace plant material. (CC&Rs restrict annual dues increases to 5% -- and it takes a vote of 75% to levy a special assessment or to raise dues more than 5%.) At this point, we still have overgrown common areas, very unhappy homeowners and board that's tired of the uphill battle. At this point in time, we feel most of our homeowners would prefer not to have an HOA. Allow governing documents allow us to dissolve with a vote of 75%. We just don't know what else needs to be done after the vote. Thanks for your interest and suggestions/comments. I'll keep you posted.

BrianB
(California)

Posts:1748

04/06/2008 4:57 PM
after the vote, you must get someone to own the common areas, which also means owning the back taxes on them. The HOA can try to sell the strips of land, but good luck... who wants a strip of land 8 feet wide with $4000 in back taxes owed? If the city assumes the strips, good luck, because they will simply charge everyone in the HOA for the $4000, as well as assess fees to pay the taxes and maintenance in the future. if the city repairs the water lines, they will assess the fees against the neighborhood. in general, i estimate more money being spent in your future, a lot more.

JC3

Posts:290

04/06/2008 5:10 PM
Do you have any idea what happened to the developer? Where he is now, or what his business name is? Maybe find him and picket, if the state and local laws permit. Let his current market know what he did to you, just be very careful to be very accurate in what you say/print, so he cannot sue for libel or slander, etc...

WinstonH2
(Arizona)

Posts:11

04/06/2008 5:30 PM
It was a very small, family-owned group. They are no longer in the area and are not developing properties, to our knowledge.

SusanW1
(Michigan)

Posts:2316

04/06/2008 5:37 PM
Are you saying that you are a 26-home complex, with equestrian trails winding around and through the homes, with a few common areas.? Are these trails being used by the residents? Are they open to the public for use as horse trails? Are you saying that the consensus is to abandon these trails? What will that do to your property values? Have you requested a tax review hearing?

WinstonH2
(Arizona)

Posts:11

04/06/2008 10:41 PM
Yes, we are a complex of 26 one acre equestrian lots. The trails are available to the residents. The complex has a 20-ft equestrian trail that crosses the mid-section of the subdivision, as well as the 10' 'buffer' zone around the perimeter. The town requires a 10' 'buffer' zone around all equestrian subdivisions because of the horses. When two equestrian subdivisions are adjacent to each other, this provides a 20' trail for equestrian use. The trails interconnect with other equestrian trails in our town, supposedly. What has happened, unfortunately, is the town hasn't planned very well and some of these trails have been blocked off. It's our understanding that, in the past, the town has purchased some of these zones to become part of the Towns Trails and Open Spaces. We've approached them about taking over ours, but so far we have been unable to get a commitment. Yes, we're prepared to abandon the trails. We did have tax review. We were able to have the six common properties combined into one with a valuation of $500. The property taxes, going forward, will only be $5 per year. Unfortunately, we were advised by the County Tax Assessor that, as AZ statutes are currently written, there is nothing that can be done about the back taxes prior to the last three years. There was some adjustment in the past three years and we could deal with that. The real problem is the taxes for 2001-2003 that add up to almaost $4,000 with interest, etc. The common properties have appeared on the County Tax Lien Sale for about six years now and the tax liens have been purchased. The County owns about half the six and the rest are owned by individuals. Fortunately for us, the common properties are of no value to anyone else, it would seem, or they would have already been foreclosed. Anyway, it's a giant mess and none of us have the knowledge to deal with it -- most of the homeowners just don't care, they just want it to go away. As far as property values go, clearly they would be more valuable surrounded with nicely landscaped common areas. Unfortunately, there are still a few subdivisions in our Town that do not have HOAs and there are still a lot of people who prefer to NOT have an HOA. About two-thirds of the houses have turned over since the developer left and a few bought here thinking there was no HOA. For those people, especially, those of us who were trying to revive the HOA are the "bad guys." They can't seem to understand that we didn't create this fiasco, we're trying to fix it.

BrianB
(California)

Posts:1748

04/07/2008 6:33 AM
if the common areas were sold (half to county, half to others), then you dont own any common areas after all. And, if they were sold for the tax liens, then you don't owe any back taxes, right? Those were assumed by the new owners. I hope the new owners don't intend to put a quad trail in on those 8 to 10 foot sections... the noise and dust would be horrible around the horses. Or a skateboard ramp/park area... again, there's not much that can be done, but why would someone buy that land if they didn't have some plan? I think you need to research what the HOA actually does own and owe, and what it doesn't. This story gets more confusing as we progress, at least to me.

MaryA1
(Arizona)

Posts:2504

04/07/2008 6:56 AM
I think the board should industriously pursue the city taking back all the common areas. If that were to happen there would be no need for an HOA. Problem solved! Contrary to what another poster said, I don't believe the city would pass on the cost to the members unless they were to set up a special taxing district.

BrianB
(California)

Posts:1748

04/07/2008 9:38 AM
Mary, you may be right, and the city may absorb the cost of maintenance without passing it on. I know the City of Tempe would not do that, even in the 1990s and early 2000's, when it was flush with money and had a budget surplus. Perhaps Queen Creek still has a surplus, and can afford to take on the additional expense without getting paid, but after the OP's last post or two, i am not sure there are any common areas.... if they were sold at auction for the tax lien, then the areas are owned by other entities, not the HOA. they may already be out of business.

WinstonH2
(Arizona)

Posts:11

04/07/2008 2:09 PM
Only the tax liens have been purchased (not the properties) and the purchaser will recieve interest on their investment. If the liens are not satisfied within a certain period of time, the lien holder may 'foreclose' and then own the property, if he chooses to pay all the back taxes. That has not been done at this point. Therefore, all the taxes are still due, plus all the interest the lien holders have received; and title will remain in the name of the HOA until foreclosure occurs. Until we get this resolved, we're hopeful that before someone goes to the trouble and expense of foreclosing, they will view the property and realize that it's an eight or ten foot strip of unusable land running between properties. In many cases, we understand, investors sometime buy these tax liens for a few dollars without even viewing the property and understanding what they've bought the right to buy. In some cases, they buy them then attempt to hold hostage the other homeowners. They are often called "predatory investors."

BrianB
(California)

Posts:1748

04/07/2008 8:04 PM
predatory investments...Hmmmmmmmm i can see several things to do with a ten foot strip of land that would make life miserable for those around it. SKateboard park. Quad trail or motocross trail. basketball court for teens to hang out all night. Car parking/sales area. Good luck with Queen Creek taking over your debt. I personally doubt it will happen: cities don't typically want HOA's back, that's why they allowed them to be created in the first place, to not have to deal with maintenance, etc...

MaryA1
(Arizona)

Posts:2504

04/08/2008 8:20 AM
You're right, Brian, most cities don't want this resp. which is why they've mandated HOAs for all new construction. The CCRs of my former assn had a clause which required the approval of the City of Glendale to terminate maint. of the common areas. A number of residents wanted to terminate the HOA and when we checked with the City we were told they definitely would not take ownership of the common areas. The common areas consisted of a water retention basin and 3 small strips bordering several streets -- a total of about 2 acres. Of course, in Winston's case it's worth a try. Since the City of Queen Creek already has equestrian trails they might be receptive to taking over the ones in his s/d. I can't imagine that these trails would cost as much as landscaped areas to maintain. Also if the City took ownership of the parcels they might be able to negotiate a deal regarding the back taxes, so that might not be a consideration in determining if they want to get involved. I can't imagine any investor wanting this property!

BrianB
(California)

Posts:1748

04/08/2008 8:59 AM
the only reason an investor would want that property is predatory investment, like the OP mentioned (hoping to turn a profit from the HOA with "threats"), or someone simply looking to cause trouble with threats to build on it, etc..

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