Questioning Validity of Assignments - Michigan

Just curious if anyone has input on my HOA's current situation.

My particular community is made up of 10 separate associations, each with its own set of Deed Restrictions. As each association was completed, the developer was to have assigned membership to an “umbrella” association, which oversees the each individual association and the overall community with a set of By-Laws. A Board of 5 Directors loosely governs the overall community.

Some associations are questioning the validity of their assignments. Only 3 of the 10 can provide documents recorded with the state proving that they were properly assigned. The remaining associations have signed documents but no proof that the documents were officially filed with the state. The assignments would have occurred between 1975 and 2002.

To resolve this, the board is filing paper work to have the associations questioning their membership officially assigned. I question the authority of the board to take such action without a 2/3 vote approving this transaction.

Does anyone know if there is a statute of limitations for assigning an association and if it is past the period is the association considered lapsed?

Also, at one point our association let its non-profit status lapse for a period of time, approximately 5 years. In order to reinstate the non-profit status would a 2/3 vote approving the re-instatement be necessary?

Sorry for the confusion, it really is quite a quagmire. There are really 2 main issues that have come up in the last year where our board is not transparent. I will do my best to be clear.

Issue 1
My Homeowners Association is made up of 10 smaller individual associations, which upon completion were assigned to the overall Association over a period of time. Each association operate under the by-laws of the main association but have its own set of Deed Restrictions (comparable to CCR’s) that dictate what can and cannot be done within that particular subdivision. No two sets of Deed Restrictions are alike.

In 1958 our developer started building Subdivision #1 which consists of 43 individual homes. Upon completion Subdivision #1 rights and obligations per its Deed Restrictions were assigned and transferred to the HOA, a Michigan non-profit corporation, in 1959.

A few years later Subdivision #2, consisting of 20 individual homes, was completed and its rights and obligations were assigned to the main HOA. The same procedure was followed until all 10 associations were supposedly assigned. I write “supposedly” because filed recording documentation can only be found for Subdivisions 1, 2 and 3. It is speculated that the builder did not follow through with the actual recording of the assignments since we are unable to find the documents recorded with the county. The current board is working with the family of the developer to collect copies of the assignments that they may have in their possession, hoping that this will provide proof of recording.

If the board is not able to find proof of recording, they plan to record them as is. I believe that they would need to have 100% participation of the homeowners in order to do so but the board insists it is obligated to present the topic to the membership for discussion or a vote. As directors, they feel that they have the authority to record the assignment documents without membership input.

My question is: If the HOA is unable to prove that the specific subdivision had been properly assigned to the HOA upon completion, is that subdivision a legal member of the HOA subject to the by-laws and deed restrictions? Is there a legal timeframe in which the assignment was to take place and if so, how long does the developer have to complete the transaction? If not, does the board have the power to record the assignments today, up to 50 years later, without a vote from that particular subdivisions approval? How do we move forward?

Issue 2 –

While researching this, I found that the original Non-Profit Corporation created in 1958 had not been renewed yet the HOA had continued operating its status lapsed for a period of 3 years. The board created a new association bearing the same name but different tax id status in 2001, again without notification to the membership. Is this legal? Wouldn’t a membership vote have been necessary to do so? Would that negate the entity as it is today and require the association to be established all over again? How do we move forward?

I hope that helps, it really is a confusing situation!