What Rules Set out the Usage/Misuse of HOA Dues?

Here is something I found on another site which reinforces what I said about the Laws of Missouri being lacking/deficient.

http://styronblog.com/2010/06/23/the-defunct-hoa-problem-continues-in-missouri-legislation-needed-urgently/

Our association has not had a quorum when they have conducted meetings and taken votes as well as they held elections this past June but did not have three people to put on the ballot so the three previous board members reran themselves. I don’t believe this is proper procedure based on the laws in Missouri. I believe if there is not three people willing to run then the association becomes defunct. Does anyone know if that is correct? Also, I believe I’m correct when I say that our association has to have a quorum to run their meetings and take votes. We have been told by the association that they can do what they want and sue them if you don’t like it. I believe this next year we are going to withhold our association dues and put them in an escrow account until they use the money for the road as it states in our subdivision restrictions. We figure let them put a lien on our home and we can go to court. I would love to have the judge ask them for minutes from the meetings as well as vote counts. They voted to take away proxy votes and force you to attend the meeting at the President’s home rather than a neutral location (public library had been suggested but they said no) because the President says that no judge is going to tell him what to do. The President has also told us that we are not a public meeting (which a judge told me it was), it’s a private subdivision and we are not governed by the law or police. Really intelligent individuals. I recently sent them a letter letting them that if they are not governed by anyone than on the flipside we do not have to follow what they say because who are they? I have spoken to my attorney and he indicated there is a real void in Missouri when it comes to Homeowners Associations.

Ann,

I answered the question in the other thread. However, since you did start a new thread, I'll post it here as well.

the answer to your question of "If there is no law then why are we required to pay dues? " is a simple one.

When you purchased your property in a coveted community, you entered into a contract with all your neighbors to abide by various rules. This contract is your Declaration of Covenants, Conditions and Restrictions (CC&Rs). Typically the CC&Rs specify that an Association be formed to manage the common area and enforce the conditions of the contract. Additionally, the CC&Rs typically state that the members will pay assessments so the Association has the financial resources to meet this obligation.

Therefore, you are paying dues/fees/assessments because you contractually said that you would and you are bound to the terms of the contract (as written or amended) until you sell the property.

As for the money being used properly, it's the responsibility of the members to be involved with the running of the Association to make sure that the money is properly used. If something prevents you from serving on the Board, you could still attend board meetings or request copies of the minutes. This way you can stay on top of how the money is used. If you strongly disagree with board decisions, you can offer your assistance to the Board or run for a position on the board itself and, if elected, be one of those making the actual decisions.

In regard to the laws, what you need to understand is that the Association is a business. They are typically incorporated as a nonprofit corporation (although some are not) and as a corporation, must comply with your States corporate law.

Many States are adopting various HOA laws to better protect the members right to review the books of the Association and be informed of meetings along with the right to attend those meetings if the members desire to. The specific Missouri laws which might apply that I know of are:

Missouri Nonprofit Corporation Act (applicable if your Association is incorporated as a nonprofit)

Condominium Property Act (applicable if your development is a condominium)

You might want to write your State representative and ask if there are any bills introduced that would create HOA laws similar to what other States have.

There are many many many web sites that speak about the problems about living within an Association. This site is a bit different in that posters actually try to help others learn and/or deal with an issue by working within the HOA rules. As with any advice you are free to use all, some or discard it. I've learned from experience, when I had issues with my Association, that the only real way to make positive changes in an Association is to become involved with the running of the Association. This can be done by serving on the Board, serving on a committee, just attending meetings and learning why things are done (perhaps suggesting other ways that were not thought of), volunteer for various projects, etc. It's your Association and the Association is only as good as those who are involved with it.

Welcome to the site. Hopefully we can assist you from time to time. Perhaps you can assist others who don't have your experiences.

Hope this helps.

Tim

What do you think a HOA is supposed to do? There's reality and fantasy. HOA's aren't run by "Proffessionals". They are run by people who just have a vested interest in keeping their home values up. The President could be the "avon lady" or a Real Estate agent. There's no hard rules on who is on the board nor who are the members of the HOA. Just have to be an homeowner.

I don't see the full story coming out here. Since you don't attend meetings, how do you know it's your dues being used? How do you know this isn't a charity the homeowners donate to every year on their own? I don't see proof your dues are being used to supply the charity.

A HOA is ONLY funded by it's members for it's members. It works like a "poker kitty". Everyone pitches in but the person with the best hand/squeeky wheel wins the pot...There's just no way to please everyone with the money the HOA has in it's budget. Someone is going to complain about something. Why do we spend money on new mailboxes but not on a lightbulb that burnt out at the entrance? Etc...

Until you make the effort to get involved and educated, expect what you get. I don't believe anyone has a say in their HOA if they don't have a solution and work toward getting there. Everyone has problems and issues, they just don't make the effort to make the fixes or solutions..... The power is yours, if you don't use it, then keep making up excuses...

I know because people kept asking them "where are our funds going" and so in the local newspaper in their weekly blog they wrote what they were doing with them. They wrote in all kinds of stuff as filler like "going to meeting and advocating" and stuff like that. For the last sentence they wrote (finally getting around to answering the question) that they planted flowers at the elementary school, gave all the kids "goodies" at Christmastime and that with the remainder they adopted 7 (I believe or 8) homeless kids and bought them food and clothes etc. That is all well and good but we are not a charitable organization. If as someone else said above we are obligated bbecause of papers we signed with our loan I just doubt that the government has a mandate to sign papers stating we will contribute to a charity. I know because they told us.

I don't go to the meeting because its a dangerous neighborhood at night and I've already been broken into once and I don't like coming home to a dark house not knowing if someone is inside and I'm scared and nervous the rest of the night thinking about if someone might be hiding inside. NOT PARANOID - a lady one corner from me was murdered in the middle of the night turns out by someone who had walked by several times and seen her. she was about the age i am now. her house sat empty for years and was starting to fall apart no one wanted it because of the history but finally someone bought it for a rental and it looks nice again. But I refuse to feel guilty for not attending these meetings. My son lives out of town but went with me to one and it was so hot and so jammed as I said before there was no place to sit and it was summer time and very uncomfortable and I couldn't hear what they were saying and they purposely choose a room too small is all I can figure because on the way out the principal of the building said she had offered them the auditorium and they refused it so you figure it out if they really want people to attend or not.

And I really don't like your attitude but I guess opinions - everyone has one and you are entitled to yours but don't blame it on me and I outlined in what I wrote this stuff before.

Have you ever had your house broken into. I was home at the time and for a minute or so was inside the house when the 3 thugs "young men" were inside. Do you know what happens to people sometimes if you confront a robber in your house? I was outside on my patio on the phone and my phone went dead so I went in to see why and it was because they stole my computer and unplugged the modem and my phone went out.

So NO I don't go to the meeting after dark because I don't feel safe and if you can't understand that well I guess you lead a charmed life.

Excuse me it was not to Lisa but Melissa. I got the Lisa part more or less right anyway.

Excuse me I am not too familar with how this site works so I'm not sure I'm using it correctly to properly reflect who I am responding to.

Anyway this is continuing with my response to Tim - I read again what you wrote and i see that you have provided a link to some info about non-profit corporations which I have since discovered this is registered as. So I will review the info provided on the link you listed here thank you.

What you say is true about being part of the solution but for the most part as i said I stay home and take very good care of my yard and it adds a lot to the neighborhood and I always get compliments on it.

In the daytime I don't worry so much (although my house was broken into and that was in the daytime) but when nighttime comes the only place I want to be is home.

I got a fright just last week because it was about 1 a.m. and all of a sudden my dog started growling like I have never heard before and was looking down the hallway to my bedroom while growling and at the same time I had just noticed the odor of cigarette smoke which I am very sensitive to. You know how you notice things but they don't register but when my dog started growling (and like I said this was something new for her) and I "registered" in my mind the cigarette odor I became alarmed enough to call 911. I figure they would think I was some hystrionic or something but they came quickly and were very very helpful and nice to me and said I did the right thing. They said "a few things" have happened lately they'd like answers to and if the people responsible could be discovered by helping me all the better. So they checked around my house and said they would drive the neighborhood to see if anyone was out walking at such an odd hour who didn't need to be. They went into my basement which frankly if I were them would have made me very uncomfortable as its a good place to get trapped or surprised if someone wanted to. I've heard of people calling the police and setting them up with disastrous results so i was very grateful to these two officers who didn't cause me to feel I was overreacting.

Then about 4 or 5 days after that I went into my bedroom and raised the blinds on the side of my house to let some sun in. I usually don't raise those because it just overlooks where my non-working airconditioner is and its nothing to see so why have them up just another way for people to see in if i forget to put them back down. Anyway it gave me a start when i saw that the screen on my window was raised up and not down in place and I would have no reason for doing that as I always want the screens in place for insect control etc. in summertime. I thought maybe my son might have raised it so I didn't get too alarmed but when I asked him and he said no that together with the incident with my dog has definitely worried me the more for it and this house that I have really loved being my own and felt good in I no longer really feel secure. I tried to get a security system but I do not have the money for installation to get started and the fee would be hard to come up with but I could probably do it somehow if I could be comfortable again in my home. The house next door was broken into and they went in through a basement window so now I have developed this aversion to going to my basement at night to do laundry as I worry if someone were there. I am not normally a person who thinks about stuff like this but the way things are going and after the break-in I confess I have not been the same and this recent event has me really on edge.

Anyway I'm not sure why I told you that - oh I know it was in response to your suggestion i become more involved. Right now I'm just really not in a position to do anything because its all done at night and like I said I do not like coming home after dark and then being concerned if someone might have gotten in while I was gone. I'm much more conscious and aware of what can go wrong and the lady getting murdered about 10 yrs ago only a block away combined with everything else has just gotten me too nervous to do that.

Its not irresponsible I just don't want to put myself through all that stress which is not really unreasonable to have the fears I do consider the declining neighborhood. We used to have two police officers on bicycles in the summertime but they quit doing that.

Anyway I will respond to the others here that were nice enough to reply and then get back to the link you provided on non profit corporation information/requirements.

I will have to take some time to find answers to your questions about tax returns etc. I doubt I'm in a position to do anything in court but that won't stop me from making it known that I do not approve of their misuse of funds and I do believe it is because as I've said I doubt that the government would require me to sign papers agreeing to support homeless kids in order to buy a house here or anything similar. as I understand it the dues are for things like the other ones do like extra yard waste pickup or a community gathering and not for donations to charity. And who decides, i have to ask, how do they decide which kids they want to help? Is it just a giveaway to some kids they know or someone they have a favoritism for. But that doesn't really matter either the facts are I believe they are misusing the funds and just as i hold myself morally accountable so too I do to others with whom I must deal and so that is where my mind is, not really some legal challenge but just a way to get my point across. I know the man across the street told me he was wanting to find out and he went to a meeting one month and probably got rather upset with them but he is a nice man and not violent the police never at his house but they told him to get out of the meeting. So he put a sign in his yard (which people are always putting signs up for something around here) he lives on the corner and his house would be visible and gather more attention - but the sign said do you know where your HOA dues got to. And shortly soemone from the HOA came by to tell him to take it down as not allowed. And it may very well be against the rules but people do it all the time for garage sales or lost dog or whatever so it is very interesting that suddenly his sign was a problem.

So I'm just getting info and looking into this and will be following up on all the information you all have passed along to me so thanks very much for your interest and time.

Here are some documents that show among other things the purpose of the nonprofit corporation (the HOA) ATTACHED.

So it appears that the requirements are a part of the title to the property if I understand which is where the authority to charge dues comes in and my requirement to pay them.

But as I said I am going to write them a letter telling them that I do not agree with how they are using these funds and I'm going to suggest other things such as another yard waste pick up for example which should aid people in keeping property up.

I remember when I moved here that from the HOA they used to give an extra trash pick up per week but they quit doing it saying they couldn't afford it so you see that they used to use it for something more appropriate like the extra trash pick up but now that has been supplanted with for the most part charity contributions.

Speaking of fantasy - I think it is fantasy thinking to believe that choosing anonymous/undisclosed people and saying that you adopted them and donated whatever money was had - that will be accepted and satisfy everyone is not only fantasy thinking its delusional. In my particular circumstance I wouldn't hesitate to tell that that charity begins at home and so I've decided to donate my share to me.

I have very little control over anything and very little "say" as well. I was equally or even more disturbed when our legislators took it upon themselves to nullify the vote of the people on Proposition B and though I didn't get anywhere with it I had the satisfaction of making my displeasure well known and I gave it liberally and often and publically as well as directly to the individuals involved. The proper way (but I guess since its Missouri they wanted to SHOW ME) to address their issues with Prop B would have been a court challenge but they chose to take the direct route and basically turn Missouri government into their own fiefdom/dictatorship. I don't have a lot of things because almost everything cost money however an opinion is free and everyone has one and I don't hesitate to share what mine is.

Too many people nowadays just throw their hands up and say "oh well what choice do we have". I don't consider a victory to be totally getting what you want. There is a degree of victory to be had by not laying down like sheep and instead offering dissent. I would not be very happy with myself if I just decided it was easier to be quiet.

I realize there is no way to please everyone however they didn't please anyone in their application of the funds except the people, if they exist, to whom they donated our money.

I don't think you will find any HOA bilaws that says they are organized as a charitable humanitarian entity who collect donations to give to random strangers.

The fact that it took them so long to disclose what they did tells me they knew it was wrong or why stonewall releasing the info? There is such a thing as common sense and it seems few people have it nowadays. There really was no reason for the rude tone of your answers suggesting I'm not in touch with reality and engaging in "fantasy" thinking. I am very much in touch with reality - the reality that there are limited funds in everything today and just like our government people it doesn't belong to are very quick to distribute these limited funds to ridiculous causes like studying if the housefly prefers hamburger to turkey to dine on or som other silly study. That, btw, is a FICTIONAL study that I used for the sake of example and I'm well aware of that just so you know.

Yes, you've been most helpful. And I do intend to offer, along with my disapproval of their use of the funds, some alternate suggestions of what they might be better used for. They might reinstate the additonal yard waste pickup because I recall when that practice came to an end members were not happy about it but were told that there was no money for such a thing. obviously there is some money hence the donations. They might also consider an extra yard waste pickup per year so that you don't have to save branches and so forth for 6 months before they are picked up. Wouldn't people's property look nicer (and thus home values improved or at least stable) with yards free of clutter. That is what I consider an example of proper use. I intend to investigate but I would think that somewhere it must be spelled out that they funds are to be used to preserve as much as possible the neighborhood so that home values remain as high as possible. I don't think donating money to homeless people helps my home value in any way. Judging the way homes are being repeatedly broken into maybe it would be better spent to get us a discount on home security systems. I would very much like to have one so that I can go into my basement without wondering if there might be a thief who wandered there and didn't get to leave before I came downstairs as well. I have little doubt that in such a confrontation I would not come out the winner. I resent the fact that i have spent a lot of money and time and care to make my home livable only to have my peace of mind waylaid by thieves and burglars. Considering my situation where I am truly doing without things I NEED i cannot in good conscience NOT voice my disapproval of their usage of funds. Like i said, if they really felt good about what they did they wouldn't have taken so long to divulge it. On the contrary they would have been happy and eager to share the good news with us.

If you look guilty and act guilty you probably are guilty. hedging, not telling the truth or trying to avoid revealing facts says to me that you are guilty of something.

I'm going to follow-up on the links you left and try to get more information there. I'm not delusional enough to think that I, a 62 year old woman with few resources to hire an attorney or anything else is going to stand the world on end. I am sensible enough to think that if we are to be responsible then we owe it to ourselves and others to not be silent in the face of wrongdoings.

You do know the saying - and it can apply to anything not just international intrigue but even to HOA's. All it takes for evil to prevail is for good men to do nothing.

That's one reason I intend to do SOMETHING even if its just putting in my two cents. I'm not at all sure that I will hand over my dues this year - they are due in a month or so - I have always paid before - as a statement. Yes, they can file a lien on my house but since its upside down good luck getting anything out of it.

These are tough economic times. If they want to engage in questionable and surreptitious behavior then I have a right/obligation/duty to play my own minor-league form of hardball.

Yes I found the Articles of Incorporation filed with the Secretary of State for a non-profit corporation.

For my HOA, it states the following as its purpose:

"To maintain aesthetic and economic values of all properties within the said Homes Association Sudivision and to enforce all restrictions included in the Original Declarations and Restrictions filed with and made a part of Title to all properties in this subdivision. It shall also have other legal powers permitted a non-profit corporation.

So if it was Dissolved in 1996 for reasons including the Use of Fraud

and wasn't reinstated until 1/1/1998

how does that affect dues? Because there has never been a year we did not have to pay dues and if it was Dissolved How did they collect dues. Is that legal/allowable?

I'm interested to see an answer or figure out the answer but if somebody has an idea I'd be interested.

Anne,

Since your Association is incorporated as a non-profit, the corporation laws I provided a link to need to be complied with.

Based on what you discovered from your Corporation Commission, it appears there were issues in the past when, due to lack of knowledge, forgetfulness or actual intent, your Association failed to file annual reports. This resulted in the Association being administratively dissolved. This did not dissolve the Association. It only dissolved the status of being incorporated. Again, based on what you posted, it appears that someone discovered the error and reapplied for corporation status. When your dealing with volunteers this can happen from time to time. It shouldn't, but can and does happen.

You've done some great research over the past week or so. I would encourage you to start attending a few board meetings to see why things are being done the way they are. Perhaps you can suggest a better way or, depending on the time you have to offer, volunteer to do the research to find alternatives.

Good luck.

Tim

It appears that you were posting these questions while I was answering your last one. Since it's possible I didn't provide enough explanation, allow me to try now:


As explained in earlier posts, it's the CC&Rs that require you to pay assessments and it's the CC&Rs that typically specify what an Association is supposed to do and maintain.

In order to be recognized as a legal entity and gain the legal rights (to sue and be sued, tax benefits, etc.) that goes with being a legal entity, an Association (or any business)will formally become incorporated as a business. This is why the corporate laws apply.

When an Association is dissolved as a corporation (either administratively by the State or through a membership vote) all that happens is that the Association is no longer a legal entity unto itself. However, the contract (the CC&Rs) is not dissolved by this action and, per the CC&Rs, you pay assessments to an organization known as your Association.

If the Association is not incorporated, and you fail to pay your assessments, the Association may not file a lien or take you to court. However, per your contract, any member could file the lien or take you to court for nonpayment. This is because the contract is between you and your neighbors.


This is standard language that is put in to any Associations governing documents and is there because of contractual requirements. If the membership dissolves the Association the members must arrange for some entity to fulfill the requirements of the contract (CC&Rs). This might be by having the city agree to take ownership of the roads, donating parks to the city, etc. However, what typically happens is that your Association merges with another Association and the funds transfer over to the other Association.


Again being administratively dissolved by the state does not cause the Association to cease operations. It just causes the Association to no longer have legal rights.

However, if the Association is dissolved by the membership, then it's like a business closing the doors and no longer operating.

No matter how the Association is dissolved, the contract (CC&Rs) remain intact and enforceable. Per the contract, the common elements must be maintained and the membership must pay for the maintenance, repairs, etc. of those common elements.


Should they? yes.

Must they? - Probably not unless someone asks.

Did they? If you don't attend meetings, you would have to review the minutes of meetings to find out


I know of no requirement that they send this info out to the membership in a newsletter or in a flyer. They should have at least mentioned it at an annual meeting. However, it's possible that nothing was said about it until it was discovered and then corrected. Even then, it might have only been mentioned at an annual meeting or, more likely, just recorded in the minutes of a Board meeting (making it available to those who take the time to look and prevents making a mountain out of a mole hill for the rest of the membership).

Based on the dates, I suspect that the issue was caused from your developer failing to file annual reports. This often happens when transitioning from developer to developer or developer to membership. It shouldn't happen, but does.

Hope this helps,

Tim

I explained very clearly - you can't be much more clear than to say that it is not safe to be out at night around here.

I'm not aware of any law that says I must make myself vulnerable to the night creatures that roam around here, like the one who killed the lady one block from me or the people who kicked my neighbors door down or who broke into my bedroom through a window I foolishly left open because it was 95 degrees that day and not having the money to fix my air conditioner I preferred having it open to at least catch a breeze.

I don't have the money that you do obviously and if neither of you can figure out why it is wrong for money that is collected for preservation of the neighborhood to be given to anonymous possibly nonexistent homeless people you need more help than I can give you.

It's not fun living in this environment. Its not how I was raised. I'm not going out at night to an HOA meeting that I explained previously is held in a very small room where there aren't enough seats, no air conditioning, people smoking when the auditorium was offered for our use. They chose the most uncomfortable room possible so that people stay away. My son was in town that day and went with me otherwise I would not have gone.

Having been victimized in the past, I refuse to put myself in harm's way. If you don't understand that like I said you need more help than I can supply you with.

There are other HOA's here, I read their blog every week. They do things like have yard waste pickup or even neighborhood picnics so people know each other. None of them have ever said that they give the money collected from hard-working people to an anonymous charity with no proof of what they did with it.

If you noticed or not, FRAUD was involved before and apparently is again.

I won't say anything else because obviously you prefer to believe whatever. That's your problem not mine.

Anne,

I saw the Fraud but do not know the circumstances around it. Therefore, could not and did not comment on it.

I read about, and understand, your concern about being out at night. I certainly wouldn't ask that you put yourself in harms way. Perhaps you can encourage the Association to hold the meetings on weekends during the day or see if someone would walk you to and from the meetings.

Please remember that we only know what you post. What might be common knowledge to you isn't common knowledge to us. Therefore, we have no idea of the level of crime, the condition of your Association, the actions of your board, the specifics of issues involved, etc.

You don't need an Association do hold a neighborhood picnic. We, my wife and I, hold one every year by coordinating with neighbors to supply grills, tables and some paper supplies. Then we distribute a flyer saying "neighborhood picnic, bring your own meat, your own drink and a dish to share. Tables, grills and paper goods provided". Perhaps you can get some neighbors together and do the same thing.