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Subject: possible expiration of CC&R's and what happens to the Association

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LynnR5
(Oregon)

Posts:12

09/06/2010 8:03 PM
Our HOA's CC&R's expire at the end of this year. An extension will be voted on at our annual meeting this fall. There is conflicting advice regarding the repercussions if they expire: a) Everything will remain the same (with the exception of no CC&R restrictions and elimination of the ARC Committee) Common areas - pool/clubhouse/tennis courts - will continue to be used by the membership Annual dues will remain the same b) The entire Association will basically 'go away' along with the association dues. No clubhouse/pool, etc. and any business the corporation does will be illegal. Anyone have experience with CC&R's that have expired? Thank you, Lynn

GlenL
(Ohio)

Posts:3526

09/06/2010 8:54 PM
Are you sure they expire? Most that I've seen automatically renew UNLESS a vote is held not to renew. The deed restrictions would remain, they are tied to the land. As to the common areas you would need the advice of an attorney familiar with Oregon law and your CC&R's but somewhere in the CC&R's should be the steps required if the HOA is dissolved. One thing I will caution you on is that if the HOA is dissolved and stops paying insurance on the common areas and someone were injured and sued; each and every homeowner could be held liable for the damages.

Too bad the only people who know how to run the country are busy driving cabs and cutting hair. - George Burns

LynnR5
(Oregon)

Posts:12

09/06/2010 9:31 PM
Yes, they do expire. They're very old and I realize Most nowadays continue unless they are voted down. Just wondered if someone has had cc&rs expire and how the then operates. Collects dues? Maintains common areas? Etc?

SusanW1
(Michigan)

Posts:5035

09/07/2010 5:38 AM
The CCRs may expire but that does not mean your corporation and its obligation to the Members "expires" What do the CCRs say about renewal or amending them? This may be time for a re-write on them.

LynnR5
(Oregon)

Posts:12

09/07/2010 8:11 AM
A rewrite was in the works and sabotaged by a group who wants no cc&rs. Too long a story to go into. CC&Rs allow for amendment, re-write, extension etc anytime before they expire at end of year. Right now we are hoping for an extension of the existing ones and then a re-write or amendment can be done afterwards. If they expire there is confusion about what happens to the HOA. Some say HOA is still intact and dues don't change - common areas such as pool, clubhouse and tennis courts are still available as usual. There would just be no ARC Committee as there would be no CC&Rs to enforce. Others say if there are no CC&Rs then it is no longer an HOA No more dues, no common areas, etc. I was just hoping to find someone who might have experienced this first hand.

MaryA1

Posts:0

09/07/2010 11:05 AM
Lynn, I do not have any firsthand knowledege regarding what happens if the CCRs expire. I would say "ditto" to everything Glen has said. Additionally, I would strongly advise the BOD to meet with an HOA attorney to determine what the best action to take. What everyone needs to understand is that the deed restrictions (CCRs) "run with the land" meaning they transfer to all succeeding property owners; in other words they never go away. At least that has always been my understanding. Usually the CCRs may be extended after an initial period of 10, 20 or 30 years. My CCRs state they automatically extend for successive periods of 10 years. What exactly do your CCRs say about extending. Is it automatic or is a vote of the members required? The HOA only exists to maintain the common areas; if it is dissolved who will maintain them? The common areas do not automatically go away when the HOA is dissolved or if the CCRs expire. They must be sold, but who will buy areas that are set aside for groundwater retention? Even the pool, clubhouse and tennis courts may be very hard to sell. Most cities/co's do not want to take ownership of the common areas. If you have private roads, they cannot be sold and in most instances, they were not built to city/co code standards and must be brought to those standards b/4 the city/co will take ownership. If the common areas are left unattended and continue to be owned by a defunct HOA, there are severe liability issues for each property owner in the assn to take into consideration, as Glen mentioned. Bottom line: your members need to be educated on exactly what the purpose of an HOA and the CCRs are and your board needs to contact an attorney if they are confused by the process of extending the CCRs.

LynnR5
(Oregon)

Posts:12

09/07/2010 11:33 AM
Okay, one more time. Our CC& R's have an expiration date....it is the last day of this year. It will take 55% of the owners of lots to extend them until 2025. They can be rewritten or amended or annulled at any time prior to expiration. We are hoping they will be extended at our annual fall meeting. However, there are many that do not want them and if the 'complacent' members don't pay attention and 'forget' to vote, they could go away. An attorney just hired by the board said 'If the CC&R's are not revised or extended, there will be no Association. If the corporation continues to do business after the CCR's expire, that continued operation may be considered ulta vires acts which mean that they are illegal or beyond the power of the corporation.' We had received different information from another attorney who said the assn dues would remain in addition to all common areas, etc. So, who to believe? That's why I continue to ask if anyone has experienced this situation (expiration of CC&R's) and if/how the association continued afterwards. Re: the CC&R's 'running with the land'...That is correct, until they expire. Ours were written in the dark ages, and do not automatically continue as most do. Thanks all,

GlenL
(Ohio)

Posts:3526

09/07/2010 1:56 PM
You want to get out the vote; send a special assessment (while the HOA exists) to demolish all of the facilities and fill in the pool.

Too bad the only people who know how to run the country are busy driving cabs and cutting hair. - George Burns

JanetB2
(Colorado)

Posts:1335

09/07/2010 2:46 PM
Hi Lynn ... Here is what you are looking for probably. It is section 94.626: http://www.leg.state.or.us/ors/094.html 94.626 Corporate dissolution of association. (1) If a homeowners association is at any time dissolved, whether inadvertently or deliberately: (a) The association automatically continues as an unincorporated association under the same name. (b) The unincorporated association: (A) Has all the property, powers and obligations of the incorporated association existing immediately prior to dissolution; (B) Shall be governed by the bylaws and, to the extent applicable, the articles of incorporation of the incorporated association; and (C) Shall be served by the members of the board of directors and the officers who served immediately prior to dissolution. (2) A separate association is not created when an association is reinstated after administrative dissolution under ORS 65.654 or again incorporated following dissolution. The association automatically continues without any further action by incorporators, directors or officers that may otherwise be required under ORS chapter 65. (3)(a) The association described in subsection (2) of this section has all the property, powers and obligations of the unincorporated association that existed immediately prior to incorporation or reinstatement. (b) The bylaws in effect immediately prior to incorporation or reinstatement constitute the bylaws of the incorporated association. (c) The members of the board of directors and the officers continue to serve as directors and officers. (4) The provisions of this section apply notwithstanding any provision of a governing document of a planned community that appears to be contrary. 󞪉 c.641 §3]

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