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Subject: H.O.A. in default by vertue of walking away
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DanielA2
(Michigan)

Posts:8


01/10/2019 5:06 AM  
About 5 years ago the then President of the HOA up and walked out. Without any or most members being notified, and left the responsibility to another person. (don't 100% know but think wife?) She did nothing, collected dues and other money coming in and never deposited them. Paid very few if any bills, so no street light, snow plow or any services where done.

Now after 5 years he came back in and declared himself President and appointed people to a board, again with out any input from any one of the 28 homes.

To me that makes the HOA in default a invalid.

I paid cash for my home and have clear title with out HOA mentioned and there are 2 maybe 3 other homes purchased after his action.

Its been tough to find info on how this action of a the HOA being left for dead effects the HOA. Any thoughts.

I say it has to be redone from scratch ? Its not a dictatorship or a secret society as information from this group is at best lame.

Thanks
GeorgeS21
(Florida)

Posts:1208


01/10/2019 5:13 AM  
Five years of abject apathy? No special meetings? No elections?

He and his wife kept the assessments they collected?
DanielA2
(Michigan)

Posts:8


01/10/2019 5:23 AM  
No meeting, no nothing, it just went into limbo, she had checks un deposited totaling $2200 or so in a drawer. So by that fact alone, disbanded, defaulted, invalid HOA
TimB4
(Virginia)

Posts:16291


01/10/2019 5:40 AM  
Daniel,

I expect that there are covenants attached to your deed.
The covenants created the HOA.

If the covenants are not invalid, then the HOA is not invalid.

Taking what you post as face value, it sounds like the individual had a medical condition that the family needed to focus on. Why nobody stepped up in those five years (especially if services were not being provided/paid for) simply doesn't make sense to me. It sounds like the membership made it's choice and now has to deal with it.

If you want the HOA to go away:
1) gather support and properly abolish the covenants.
2) gift or sell common area over to others.
3) If roads are private, contact the county/city to see if they will take them over (perhaps with a special tax district made of the development to pay for it).

Considering that the membership did nothing for 5 years when services weren't being done, I doubt you can gather support to actually make the above happen. However, you might.
SueW6
(Michigan)

Posts:489


01/10/2019 7:43 AM  
How big is your HOA? Budget? Common areas? Are your roads private? Are you a residential or recreation HOA?

If the Annual Report to the State of Michigan is not filed in 3 consecutive years, its corporation can be revoked. So you need to check that out.

Then there is the IRS filing that was supposed to be done. Check that out, also.

Who was the Registered Agent? That's where all these legal notices are sent to. Was there a Secretary of the Board?

Most likely, those checks left in the drawer are void now.

Hopefully, there is legal guidance in making sure the HOA is on track.

Members should Call a special meeting and ask for an update.


(The legal description of your property should mention the name of your subdivision. The original organizing (Corporation) papers then name that subdivision or development as the corporation.)
JohnC46
(South Carolina)

Posts:8267


01/10/2019 10:02 AM  
Dan

It seems there was/is an HOA in place but it seems you and your fellow owners choose to ignore it. Now a fellow owner (past President of not) is trying to revive it. Maybe good for him addressing the elephant in the room.
DanielA2
(Michigan)

Posts:8


01/10/2019 11:14 AM  
There was no medical, he left his wife and moved away, not sure why that was added.

I moved here in 1/2015 the HOA had already been null for 2 years or so, So I did not ignore anything. Didn't know anything about a HOA, neither did either Real Estate Company. Took a while over a year to learn some had stopped paying because of no services. So really a total of close to 4 years no one has paid at all ?

No the city doesn't has anything to do with roads or what not, Getting annexed into the city is an option. I 100% know some thing needs to be done / addressed and have written them a note to us to explain action of some sort is needed. People don't just know why, telling them in plain English is a good way to inform. Not the dictatorship approach so far.

Thanks to the advise given I will look into the annual report and IRS things. That's GREAT info!
Thanks to the advise given I will look into the annual report and IRS things. That's GREAT info!
Thanks to the advise given I will look into the annual report and IRS things. That's GREAT info!
LetA
(Nevada)

Posts:675


01/10/2019 11:21 AM  
Are you still under declarant control?
CathyA3
(Ohio)

Posts:243


01/10/2019 2:03 PM  
Well, the former President can't go away for a few years and then come back and declare himself President or appoint other board members. You probably still have a legal HOA, but you do not have a valid, functioning board. However, given the level of apathy displayed by the community, these folks will likely get away with whatever they want to do without push back from the rest of the community.

However, you have bigger problems. Here's what you need to do:

* Read and understand your CC&Rs. Your neighbors should do likewise because it appears no one understand their rights and obligations as members of an HOA.

* Renew your corporate status IMMEDIATELY! Without it, homeowners are jointly and *personally* liable for accidents occurring on the common areas as well as other failures to do such things as file tax returns. I don't have to explain why this is a bad thing. Also, the bogus board may be interested to discover that if your corporate status has lapsed, they are no longer acting under the corporate shield with its D&O insurance and thus are *personally" at risk of being sued. I would not serve on a board without this, not for one minute.

* You'll probably need professional advice to untangle this mess and guide you through getting your feet under you again. The bogus board is the least of your problems right now. In your shoes, I'd be debating whether to call an attorney or a realtor first. Probably the attorney since I could be sued faster than I could sell my home.

Stories like this help explain why some of us find ourselves stuck serving on boards for years on end. We're too aware of what happens when the clueless folks take charge (or fail to take charge).

RoyalP
(South Carolina)

Posts:698


01/10/2019 4:35 PM  
* Renew your corporate status IMMEDIATELY! Without it, homeowners are jointly and *personally* liable for accidents occurring on the common areas as well as other failures to do such things as file tax returns. I don't have to explain why this is a bad thing. Also, the bogus board may be interested to discover that if your corporate status has lapsed, they are no longer acting under the corporate shield with its D&O insurance and thus are *personally" at risk of being sued. I would not serve on a board without this, not for one minute.

* You'll probably need professional advice to untangle this mess and guide you through getting your feet under you again. The bogus board is the least of your problems right now. In your shoes, I'd be debating whether to call an attorney or a realtor first. Probably the attorney since I could be sued faster than I could sell my home.



PERECT
DanielA2
(Michigan)

Posts:8


01/13/2019 8:30 AM  
Well with the helpful info SueW6 gave I contacted the State and since no annual report had been filed since 2012, they declared the HOA dissolved.

That info along shook they guys to the core.

Then I added the IRS question, omg thought they were going to pass out. LOL

I stated that there was way more to all this then just putting a letter in everyone's mailbox and claiming, here we go and I am the President and his appointment is not the way to go. I do thank them for trying to make something out of a big mess that he made, but it got more details than that.

My suggestion is to have it an annexed in to the city its self and be governed by the same city rules. I am looking into the tax rate to see if there is a difference between others and our taxed rate. If the HOA fees of $300 a year are huge difference then I'd question that.

Thanks to those who commented with helpful info. Now I will read and act on new comments / suggestions.
SueW6
(Michigan)

Posts:489


01/13/2019 9:55 PM  
Well, hang on...

If your annexation to the city to take over your private roads doesn’t work out...

You can get reinstated with the Michigan Corporate Division by filling out The paperwork and paying a small fee for each lapsed year. Check that out.

But you will need wiiling people to establish a valid board to do that, copy of original corporation papers, CCRs and bylaws too.

You will need to find out about your financial situation - bank accounts, who’s the signee, etc to update all that.

Get an accountant to help figure out your IRS filings.

The former president and wife should retire from any HOA volunteer role.
SueW6
(Michigan)

Posts:489


01/13/2019 9:58 PM  
Get board liability insurance asap, too.
SueW6
(Michigan)

Posts:489


01/13/2019 10:06 PM  
General Liability insurance, too.
DanielA2
(Michigan)

Posts:8


01/17/2019 4:42 PM  
Thank you SueW6 all good stuff and working on all that in one way or the other. I had warned them that getting into a rush to make the HOA active was a waste of effort.

I am sort at a loss as before this all came to light I started making may place in tip top shape as selling would net me $50k over purchase.

But since I seem to be in it I plan on helping where I can. But that's seems like herding cat's at this point. It been a long time since collection of dues has happened. And even then when he left his wife, he appointed her the new president, which is against the rules anyway. Not sure how this mess could be any worse to straighten out.
RoyalP
(South Carolina)

Posts:698


01/23/2019 12:14 PM  
..... Well with the helpful info SueW6 gave I contacted the State and since no annual report had been filed since 2012, they declared the HOA dissolved. .....


NO NO NO

The HOA is NOT dissolved.

The CORPORATION is dissolved.

Y'all are now open to PERSONAL liability as there no longer exists a 'corporate shield'.

Y'all can now lose PERSONAL assets including HOMES instead of merely losing corporate assets a/k/a common elements.

Either:

Reincorporate

or

Sell and move on down the road.
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