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Subject: only the developer wants/needs the HOA to be incorporated
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NpS
(Pennsylvania)

Posts:3658


05/28/2019 2:18 AM  
Lawyers can certainly think outside the box, but typically that's in areas of law where they have recognizable expertise. When a lawyer admits to lacking expertise, they can think outside the box all they want. But it's their clients, not them, who can wind up sitting inside a box.

Once again, you are pursuing a false option down the same rabbit hole. Please speak to someone who knows something about the intersection of RE law and corporate law.

Re insurance, there's a reason why D&O insurance is separate coverage. When you step into the shoes of the prior HOA, do you become a fiduciary to the rest of the HOA members? Do you have any protections under your state's business judgement rules? And on and on.

You already have a long list of questions that you will never get through in a single meeting with a lawyer. IMO, if most of your questions are about corporate law instead of RE law then you are wasting your time.

Sikubali jukumu. Read all posts at your own risk.
JohnS111
(New York)

Posts:165


05/28/2019 2:22 AM  
I’m not sure if insurance would cover you.

For the HOA name, does the reference to the page in land records on which the HOA’s certificate of incorporation is recorded say “as amended from time to time” or include any other words that contemplate the certificate of incorporation being modified?

Forming a new corporation might at least require your neighbors to form a new HOA in order to bind people by its restrictions, and people would need to voluntarily join, since the zombie HOA, as referenced in county land records, would not be in existence and could not be revived as a corporation (because you would have taken its name with a new corporation).

Forming a new corporation requires usually a few hundred dollars in state filing fees but annual or biennial recurring filings and fees.

I would not do something like this if I were still on a board because that is not behavior that would be acceptable by a board member.
JohnS111
(New York)

Posts:165


05/28/2019 4:17 AM  
To add: if you form a new corporation, your neighbors could also amend the documents that are on file and that refer to the prior HOA. That could be tough to do.

In summary, there is a mess here and that gives you some room to escape the restrictions of an HOA. This is not without risk and the path is not completely clear. Messing with the prior HOA by forming a new corporation could also create liability for you, particularly as you’re a director.

There is no 100% correct and 100% clear path here, and each approach has different pros and cons. If anyone tells you that his way is the only way and denies having blind spots or a lack of knowledge of all relevant areas, then find someone else for advice.
NpS
(Pennsylvania)

Posts:3658


05/28/2019 4:50 AM  
Posted By JohnS111 on 05/28/2019 4:17 AM
To add: if you form a new corporation, your neighbors could also amend the documents that are on file and that refer to the prior HOA. That could be tough to do.

In summary, there is a mess here and that gives you some room to escape the restrictions of an HOA. This is not without risk and the path is not completely clear. Messing with the prior HOA by forming a new corporation could also create liability for you, particularly as you’re a director.

There is no 100% correct and 100% clear path here, and each approach has different pros and cons. If anyone tells you that his way is the only way and denies having blind spots or a lack of knowledge of all relevant areas, then find someone else for advice.



Once again, a lot of gobbledygook on how to circumnavigate the law of corporations, which is well established and rather straightforward, and which has nothing to do with the constraints on the land. Yet, nothing at all said about the source of the constraints that Joe and his neighbors would like to eliminate - the restrictions that run with the land no matter whether a corporation exists or not.

Entities can change form, but a cloud on title is a cloud on title is a cloud on title. Recommending that someone should play games with filings -- and then backpedaling by saying that nothing is 100% certain -- does not pass the proverbial giggle test IMO.

Sikubali jukumu. Read all posts at your own risk.
JohnS111
(New York)

Posts:165


05/28/2019 5:05 AM  
NpS, you're Example #1 in my casebook of someone who claims absolute knowledge yet lacks it.

There are numerous instances of people forming new corporations once a HOA has been administratively dissolved, in order to bypass HOA restrictions that are included on real estate filings. Nebraska, for example, passed a law a few years ago to avoid these situations.

Doing so in this situation might work, although doing so creates risks and neighbors can likely find ways to work around it.

NpS, none of us have even seen the full scope of real estate filings and corporate governance documents. To do as you're doing and to claim absolute certainty about the path forward, when we haven't even seen the full documents, is very poor form and you would be fired from a professional services firm for doing that.
JohnS111
(New York)

Posts:165


05/28/2019 5:13 AM  
To translate this situation into one that nonlawyers would know:

Say we are students in school and have to do a book report about a book covering two topics. We are knowledgeable about one of the topics but not the other. None of have seen the actual book or read it; we've just seen extracts and received second-hand information about it.

The wise student would read the whole book before giving a definitive book report. The wise student would not claim absolute knowledge about the book's topics.

The unwise student would claim absolute knowledge about the book and its topics, and give a definitive book report, before reading the whole book. This is NpS.

RoyalP


Posts:0


05/28/2019 5:27 AM  
Posted By JohnS111 on 05/28/2019 2:22 AM
I’m not sure if insurance would cover you.

For the HOA name, does the reference to the page in land records on which the HOA’s certificate of incorporation is recorded say “as amended from time to time” or include any other words that contemplate the certificate of incorporation being modified?

Forming a new corporation might at least require your neighbors to form a new HOA in order to bind people by its restrictions/, and people would need to voluntarily join, since the zombie HOA, as referenced in county land records, would not be in existence and could not be revived as a corporation (because you would have taken its name with a new corporation).

Forming a new corporation requires usually a few hundred dollars in state filing fees but annual or biennial recurring filings and fees.

I would not do something like this if I were still on a board because that is not behavior that would be acceptable by a board member.





NO NO NO NO ..... a thousand times NO

The HOA has no, repeat no, restrictions.

The HOA is formed to ENFORCE restrictions imposed by Covenants and to maintain any commonly owned property.
JohnS111
(New York)

Posts:165


05/28/2019 5:44 AM  
RoyalP, please re-read my post. You're reading things into it that aren't there.
NpS
(Pennsylvania)

Posts:3658


05/28/2019 6:10 AM  
Posted By JohnS111 on 05/28/2019 5:05 AM
NpS, you're Example #1 in my casebook of someone who claims absolute knowledge yet lacks it.

There are numerous instances of people forming new corporations once a HOA has been administratively dissolved, in order to bypass HOA restrictions that are included on real estate filings. Nebraska, for example, passed a law a few years ago to avoid these situations.

Doing so in this situation might work, although doing so creates risks and neighbors can likely find ways to work around it.

NpS, none of us have even seen the full scope of real estate filings and corporate governance documents. To do as you're doing and to claim absolute certainty about the path forward, when we haven't even seen the full documents, is very poor form and you would be fired from a professional services firm for doing that.



Never ending gobbledygook.

Joe already said that he will speak to a lawyer and a title company.

Joe has one question to ask the lawyer: What’s the best way for me and my neighbors to get rid of the CC&R's effect on our properties if the HOA serves no purpose to us and we have no common property, even though the CC&Rs still have ongoing viability for a sister property (with a pool, clubhouse, golf course, or whatever)?

At the end of the day, that’s the only question that matters. That question will likely spawn discussions about partitioning the effect of the CC&Rs on the different sub-parcels of land. And that will be helpful to Joe understanding his choices.

There's a big difference between claiming to know more than you actually do vs. having the experience to know which path is most likely to reap positive results. To me it's a slam dunk - This is a Title issue.

Sikubali jukumu. Read all posts at your own risk.
JohnS111
(New York)

Posts:165


05/28/2019 6:12 AM  
To me it's a slam dunk - This is a Title issue.




OP, I'll be curious to see what the lawyer you talk to says:

Is it a title issue alone?

Or are there other areas of the law that are relevant? In my view, it's a real estate issue plus a corporate law issue (and there could be other areas of the law that are relevant and should be looked it); it's not just a title issue.

Please let us know when the time comes.

If the lawyer says that it's a title issue alone, then I'll be shown to be wrong.
JohnS111
(New York)

Posts:165


05/28/2019 6:16 AM  
Posted By JohnS111 on 05/28/2019 6:12 AM
To me it's a slam dunk - This is a Title issue.




OP, I'll be curious to see what the lawyer you talk to says:

Is it a title issue alone?

Or are there other areas of the law that are relevant? In my view, it's a real estate issue plus a corporate law issue (and there could be other areas of the law that are relevant and should be looked it); it's not just a title issue.

Please let us know when the time comes.

If the lawyer says that it's a title issue alone, then I'll be shown to be wrong.




To add: OP, your questions are good ones. In my view, once you've described your ideal outcome, the question would be, "How do I get there?"

That's the question. NpS says that it's "a Title [sic] issue". I say that it's a real estate plus a corporate law issue (and there could be other areas of the law that are relevant and should be looked at); it's not just a title issue.

I look forward to the feedback that is received.
JohnS111
(New York)

Posts:165


05/28/2019 6:21 AM  
JoeB20, please also consider emailing the relevant documents to the lawyer before you speak to him or her. That way he or she can give an informed view when you speak. The lawyer is obligated to keep them confidential even before you engage him or her.
RoyalP


Posts:0


05/28/2019 7:14 AM  
BTW, our covenants Article 1 Section 1.01 says our HOA is required to be incorporated:
"The "Association" shall be organized as a nonprofit corporation for a perpetual term under the laws of the State of Kansas."
RoyalP


Posts:0


05/28/2019 7:15 AM  
oops:

from the OP

BTW, our covenants Article 1 Section 1.01 says our HOA is required to be incorporated:
"The "Association" shall be organized as a nonprofit corporation for a perpetual term under the laws of the State of Kansas."
JoeB20
(Kansas)

Posts:35


05/28/2019 7:45 AM  
JohnS111 said: "does the reference to the page in land records on which the HOA’s certificate of incorporation is recorded say “as amended from time to time” or include any other words that contemplate the certificate of incorporation being modified?"

No, it does not. There is a reference to omiting any restrictions based on race/color/etc citing the laws that preempt such descrimination. There is no wording in the title work referencing any of docs being modified. However, those documents (i.e. what is recorded at that book/page) themselves outline their procedures for modification.

I would assume that since the title work cites the version that declares the procedure for modification, such modification would be allowable?
JohnS111
(New York)

Posts:165


05/28/2019 8:20 AM  
Posted By JoeB20 on 05/28/2019 7:45 AM
JohnS111 said: "does the reference to the page in land records on which the HOA’s certificate of incorporation is recorded say “as amended from time to time” or include any other words that contemplate the certificate of incorporation being modified?"

No, it does not. There is a reference to omiting any restrictions based on race/color/etc citing the laws that preempt such descrimination. There is no wording in the title work referencing any of docs being modified. However, those documents (i.e. what is recorded at that book/page) themselves outline their procedures for modification.

I would assume that since the title work cites the version that declares the procedure for modification, such modification would be allowable?




Without seeing the documents in full, your analysis seems to make sense.

If you set up a new corporation with the HOA's name, then your neighbors would need to set up a new corporation and amend the existing filed documents so that they are valid for the new corporation, or start over with new filings. That's a hassle for them and would add complications in their efforts to bind you and others by a HOA.
JoeB20
(Kansas)

Posts:35


05/28/2019 8:23 AM  
I went to the title company who handled my closing 11 years ago. The lady was nice, but very non-comittal. She said that she didn't know anything about HOAs or disovling them, or removing the CC&R. She said a lawyer needs to prepare the paperwork to do that.


A couple thoughts come to mind:
- I assume there are more knowledgeable title company employees around who could provide more guidance
- This title company seems like it might go along with whatever a lawyer sends them (that's spooky)


I asked for a lawyer recommendation and got a number.
I also emailed a lawer who's onlne description starts off with "His practice principally consists of disputes involving real estate, businesses..." I haven't heard back from him yet.
JohnS111
(New York)

Posts:165


05/28/2019 8:28 AM  
Posted By JoeB20 on 05/28/2019 8:23 AM
I went to the title company who handled my closing 11 years ago. The lady was nice, but very non-comittal. She said that she didn't know anything about HOAs or disovling them, or removing the CC&R. She said a lawyer needs to prepare the paperwork to do that.


A couple thoughts come to mind:
- I assume there are more knowledgeable title company employees around who could provide more guidance
- This title company seems like it might go along with whatever a lawyer sends them (that's spooky)


I asked for a lawyer recommendation and got a number.
I also emailed a lawer who's onlne description starts off with "His practice principally consists of disputes involving real estate, businesses..." I haven't heard back from him yet.




I've filed mortgages and other real estate filings before, using a title company, and the title company just filed what I gave them, without a problem. I included all sorts of stuff in the filing (extra documents, etc.), but I checked to make sure that to the best of my knowledge what I submitted did not violate any filing requirements. So yes, title companies will file what you give them, in my experience, although a good lawyer will only provide something that can be filed.

I've had similar experiences with title company employees. My experience with real estate filings is very limited, though.

A lawyer who handles residential real estate should be able to help with this (the real estate filings side), and I'd try to find someone who handles residential real estate but works in a firm with other lawyers who handle corporate law or, ideally, HOA law.

JoeB20
(Kansas)

Posts:35


05/28/2019 1:22 PM  
So I found the kansas law about forfeiture of corporations: https://www.ksrevisor.org/statutes/chapters/ch17/017_075_0010.html


A noteworthy assembly of quotes:
... Any corporation that fails to submit such report and fee within such time shall forfeit its articles of incorporation, and the secretary of state shall notify the attorney general that the articles of incorporation of such corporation have been forfeited. .... In addition to any other penalties ... shall work a forfeiture of its right or authority to do business in this state.


We already discussed how members can seek enforcement without the board, so the "board" can likely pursue enforcement by saying they are acting as individuals.


But the articles of incorporation say (among other things) its purpose is to fix/levy/collect payment. The CC&R says the association board (not members) may assess dues. The articles and the CC&R say the association shall be a corporation.

So the party allowed to collect $ is required to exist as a corporation, and collect that $ by actions the corporation's board. And yet the only authorized form of that board has no right to do business in the state...?

So it might be the case that without the corporation, the HOA does not have authority to collect dues or fines, but can otherwise whine about violations?

(still waiting on contact from a lawyer)
JoeB20
(Kansas)

Posts:35


05/28/2019 1:34 PM  
nevermind, I read that too fast. The forfeiture of the right to business only applies to foreign corporations. Domestic corporations only forfeit their articles of incorporation.
JohnS111
(New York)

Posts:165


05/28/2019 1:57 PM  
Let's also think outside the box here:

Even if a member of an unincorporated HOA can enforce restrictions, doing so means incurring legal fees. It's rare for a plaintiff to recover legal fees from a defendant, unless the governing documents provide for that or unless the plaintiff files a lawsuit under a law that provides for that.

So in most cases, if a member of an unincorporated HOA will have to bear his or her own legal fees in order to enforce a restriction against someone else.

I don't know of many people who would bother, in that case.
RoyalP


Posts:0


05/28/2019 2:35 PM  
Posted By JoeB20 on 05/28/2019 1:22 PM
So I found the kansas law about forfeiture of corporations: https://www.ksrevisor.org/statutes/chapters/ch17/017_075_0010.html


A noteworthy assembly of quotes:
... Any corporation that fails to submit such report and fee within such time shall forfeit its articles of incorporation, and the secretary of state shall notify the attorney general that the articles of incorporation of such corporation have been forfeited. .... In addition to any other penalties ... shall work a forfeiture of its right or authority to do business in this state.


We already discussed how members can seek enforcement without the board, so the "board" can likely pursue enforcement by saying they are acting as individuals.


But the articles of incorporation say (among other things) its purpose is to fix/levy/collect payment. The CC&R says the association board (not members) may assess dues. The articles and the CC&R say the association shall be a corporation.

So the party allowed to collect $ is required to exist as a corporation, and collect that $ by actions the corporation's board. And yet the only authorized form of that board has no right to do business in the state...?

So it might be the case that without the corporation, the HOA does not have authority to collect dues or fines, but can otherwise whine about violations?

(still waiting on contact from a lawyer)




fact: all property owners are members of the HOA (by virtue of the CCRs)

fact: if incorporated the members are protected by the'corporate shield'

fact: if not incorporated the property owners are still members OF THE HOA, but, no longer have a 'corporate shield' against personal liability

that will be $0.02 please


ps. what, precisely, are the collected assessments used for ?

could the HOA be successfully sued ? see the above re: corporate shield / personal assets (ie. homes)
NpS
(Pennsylvania)

Posts:3658


05/28/2019 2:59 PM  
Posted By NpS on 05/28/2019 6:10 AM
Joe has one question to ask the lawyer: What’s the best way for me and my neighbors to get rid of the CC&R's effect on our properties if the HOA serves no purpose to us and we have no common property, even though the CC&Rs still have ongoing viability for a sister property (with a pool, clubhouse, golf course, or whatever)?



Joe
You only have so much free time with the lawyer. I suggest that you use it wisely.

What I posted was one clear and concise statement of your real issue that you can discuss with the lawyer. She will want to know the relevant facts, and you should provide them. Then listen to what she recommends.

Sure, there are a lot of side issues and distractions that you can talk about. But those are not going to get you an answer on your core question identified in that one single statement of the most important issue that you face.

What's your goal? - Get rid of the restrictions on your land.

How can you achieve that goal of getting rid of the restrictions? Well, if I were in your shoes, I would spend as much of the lawyer's time on that issue. Not because there aren't any other issues. But because, once you have the title cloud resolved, the rest is relatively easy.

Best of luck.

BTW. My issue with John is that he's a what-about kind of guy. What about this? And what about that? Oh, and here's something else. I've seen this and I've seen that. Maybe you can get around things this way or that way. But at some point, all those what-abouts are little more than a distraction unless you can consolidate your message into a single straightforward statement of the issue.

I've tried to give you such a statement on your title issue.

Perhaps John can do something similar on his central argument.

Sikubali jukumu. Read all posts at your own risk.
JohnS111
(New York)

Posts:165


05/28/2019 3:10 PM  
Posted By NpS on 05/28/2019 2:59 PM
Posted By NpS on 05/28/2019 6:10 AM


BTW. My issue with John is that he's a what-about kind of guy. What about this? And what about that? Oh, and here's something else. I've seen this and I've seen that. Maybe you can get around things this way or that way. But at some point, all those what-abouts are little more than a distraction unless you can consolidate your message into a single straightforward statement of the issue.





Good, I take that as a compliment. I am very careful and am very sure, when doing my job in the real world, to analyze ALL of the facts and explore ALL of the options.

Very few legal issues in the real world are black and white, with only one right answer.

Result of my being careful? I keep getting promoted, am known as being very thorough and, as one client told me, "when you give me a piece of your work, I know it's always right".

You've given very cavalier answers, given with certainty and covering only one or two points of a broad situation. And you've done so without even having the full facts and even without seeing the relevant documents! I said before that you'd be fired for doing that (at least in my line of work), and I stand by that. Some clients like that kind of approach, but it comes back to bite because someone who acts like that misses things and gets things wrong.

JoeB20
(Kansas)

Posts:35


05/28/2019 3:17 PM  
RoyalP said: ps. what, precisely, are the collected assessments used for ?

Hot dogs & burgers at national night out block party
Years ago the HOA owned common property (basically: a drainage ditch) but got the city to buy it for $1, and take over mowing. Except there is a gentleman's agreement that the HOA will still clean up under the trees where the mowers can't go. So we pay someone to do that.
There may be other expenses I'm forgetting.
JohnS111
(New York)

Posts:165


05/28/2019 3:17 PM  
Reposting for clarity:

NpS, good, I take that as a compliment. I am very careful and am very sure, when doing my job in the real world, to analyze ALL of the facts and explore ALL of the options.

Very few legal issues in the real world are black and white, with only one right answer.

Result of my being careful? I keep getting promoted, am known as being very thorough and, as one client told me, "when you give me a piece of your work, I know it's always right".

You've given very cavalier answers, given with certainty and covering only one or two points of a broad situation. And you've done so without even having the full facts and even without seeing the relevant documents! I said before that you'd be fired for doing that (at least in my line of work), and I stand by that. Some clients like that kind of approach, but it comes back to bite because someone who acts like that misses things and gets things wrong.
RoyalP


Posts:0


05/28/2019 3:44 PM  
Posted By JoeB20 on 05/28/2019 3:17 PM
RoyalP said: ps. what, precisely, are the collected assessments used for ?

Hot dogs & burgers at national night out block party
Years ago the HOA owned common property (basically: a drainage ditch) but got the city to buy it for $1, and take over mowing. Except there is a gentleman's agreement that the HOA will still clean up under the trees where the mowers can't go. So we pay someone to do that.
There may be other expenses I'm forgetting
.




better start remembering

w/o a corporate shield y'all are exposing your PERSONAL assets to a judgement against the HOA

personal assets = home and bank account and retirement fund
JohnS111
(New York)

Posts:165


05/28/2019 3:54 PM  
RoyalP, individual homeowners often have to pay for judgments against the HOA anyway, indirectly.

The HOA's funds are from homeowners, in large part. If the HOA has to pay a judgment, where does it get the funds to do so? Often by imposing an assessment on homeowners.

Thus an HOA without sufficient insurance coverage doesn't necessarily provide a lot of protection.
NpS
(Pennsylvania)

Posts:3658


05/28/2019 4:05 PM  
As you wish John. You still haven't made a clear and concise statement of the central issue as you see it.

I think that one of the core differences between you and me is that you seek to maximize billable hours and I don't. If a lawyer couldn't provide a clear and concise statement of the issue, I wouldn't hire him. Not because he isn't thorough in his research, but because he's spending my money and I don't want my money wasted by someone who lacks the expertise to separate the wheat from the chaff. If a lawyer knows what he's doing, he should have no trouble coming up with a short and concise statement of the issue.


Sikubali jukumu. Read all posts at your own risk.
JohnS111
(New York)

Posts:165


05/28/2019 4:15 PM  
Posted By NpS on 05/28/2019 4:05 PM
As you wish John. You still haven't made a clear and concise statement of the central issue as you see it.

I think that one of the core differences between you and me is that you seek to maximize billable hours and I don't. If a lawyer couldn't provide a clear and concise statement of the issue, I wouldn't hire him. Not because he isn't thorough in his research, but because he's spending my money and I don't want my money wasted by someone who lacks the expertise to separate the wheat from the chaff. If a lawyer knows what he's doing, he should have no trouble coming up with a short and concise statement of the issue.





Yes, I have.

The OP stated:

"If I could permanently be free of the HOA for a few thousand $, I'd jump at the chance."

I've stated above that the question is "how to be rid of the HOA's restrictions".

Just because you can't or won't read my concise statements does not mean that I haven't made them.

Don't hire me. I hope you won't.

And, just so you know (something), clients won't pay for hours they view excessive. So if I spend 2 hours thinking about something and there's only 30 minutes of value to the client, then only 30 minutes is billed and paid. Lawyers actually try to MINIMIZE billable hours, since we all know that clients won't pay for things that they consider excessive and since we have extensive obligations always to act in the client's best interests.
JohnS111
(New York)

Posts:165


05/28/2019 4:21 PM  
NpS, the difference between us is:

(1) You make cavalier assertions about things, claiming or effectively claiming absolute knowledge, when in fact you don't know the full facts and don't know much at all about the situation. You even make sweeping assertions without even having the relevant documents for a situation.

(2) I think things through very carefully, get all of the facts and documents and, if I can't get all of the facts and documents, make it clear what my analysis is based on. Then I lay out the options for a situation, weighing the pros and cons.

Results?

You're repeatedly shown to be incorrect.

I'm repeatedly promoted at work.

There you have it.

JohnS111
(New York)

Posts:165


05/28/2019 4:26 PM  
NpS, to add:

The OP has stated that what he wants is:

"If I could permanently be free of the HOA for a few thousand $, I'd jump at the chance."

Since you don't have the full facts and have such little knowledge generally, you kept claiming that it's a "Title [sic] issue". You didn't even bother finding out the facts of the situation or considering that, just maybe, other things beyond title were relevant, and could help the OP accomplish what he wants.

You effectively claim to know everything. The result is that you're repeatedly shown to be wrong, and you miss big-picture things.

You and Melissa ("Former HOA President") are both know-it-alls. The only leg up on her that you have is that as far as I know, you haven't been accused of being a racist.

I'm ignoring both of you from now on since you add little to a discussion other than the sound of your own voice.
NpS
(Pennsylvania)

Posts:3658


05/28/2019 4:33 PM  
Yes that is a statement of what Joe wants as an outcome. "How to be rid of the HOA's restrictions" is just saying the same thing with different words.

I believe that I provided a clear and concise statement of the essential facts and the core legal issue that Joe needs to overcome to achieve his objective.

Go ahead. Give a try. What do you have to lose?

Sikubali jukumu. Read all posts at your own risk.
JohnS111
(New York)

Posts:165


05/28/2019 4:43 PM  
NpS, I see your user name on the side. I'm ignoring your posts from now on. I've lowered myself to your level by engaging in an argument with you, which I shouldn't have done. Unlike you, I apologized.
MelissaP1
(Alabama)

Posts:8503


05/28/2019 5:18 PM  
NPS... You know you can't fight an ambulance chaser... That's essentially what John111 has been from the start. He couldn't understand why a HOA would choose to fight than make an insurance claim when someone sent them intent to sue letter... (Extortion comes to mind on that one...)

I too had thoughts of disbanding my HOA and running it myself. It wasn't like I wasn't doing it anyways. However, the process and results of disbanding a HOA held no real benefit for it's members in the long run. Restrictions still had to be enforced. What if I decided to sell?

Do not think the solution to the OP's issue is to mess around with the corporation status except to re-establish it. The same results would happen if disbanded and then made anew. Best to just start from scratch and start the HOA in the right way.

Plus don't think an individual can do this. It's a whole membership thing. Wish the OP luck but think going up the wrong tree on this one.

Former HOA President
NpS
(Pennsylvania)

Posts:3658


05/28/2019 5:54 PM  
My first negative impression was when John recommended that you can take advantage of a lapse in corporate status to get out from under the reach of the HOA. Thought that it was a dangerous recommendation then. Still do.


Sikubali jukumu. Read all posts at your own risk.
RoyalP


Posts:0


05/28/2019 7:15 PM  
Posted By JohnS111 on 05/28/2019 3:54 PM
RoyalP, individual homeowners often have to pay for judgments against the HOA anyway, indirectly.

The HOA's funds are from homeowners, in large part. If the HOA has to pay a judgment, where does it get the funds to do so? Often by imposing an assessment on homeowners.

Thus an HOA without sufficient insurance coverage doesn't necessarily provide a lot of protection.




An INCORPORATED HOA provides 'corporate shield' protection for its' member's personal assets - they can't lose their homes based on a judgement against the corporation - the corporation can only lose corporate assets, eg. common elements.

An UN-Incorporated Association provides no such shield - in 'most' jurisdictions its' members would be 'jointly and severally' liable INCLUDING their personal assets.


basic corporate law 101 - feel free to pay the attorney of your choice for EXACTLY the same info
JohnS111
(New York)

Posts:165


05/28/2019 7:22 PM  
RoyalP, yes, ask any litigator how a HOA pays judgements against it: often by levying a special assessment on owners.

The owners might not be directly liable for a judgment, but they often have to pay all or part of it indirectly.
JoeB20
(Kansas)

Posts:35


05/28/2019 7:29 PM  
I'm just guessing here, but I would imagine that if the HOA is incorporated, it takes all liability on itself and has the option bringing all that liability to an end with bankruptcy. So worst case, the HOA loses its assets and goes bankrupt. It practice it probably is a cheaper/better option on smaller losses to not go bankrupt and instead raise money from the members. But in the worst case, go bankrupt and the homeowners are safe.

But without a corporation there would not be the option of the HOA taking the liabilities with it into bankruptcy to protect the homeowners.

But I'm not a lawyer, so I may way off...?
RoyalP


Posts:0


05/28/2019 7:32 PM  
Correct, BUT, in the event of a catastrophic judgement, the incorporated HOA may file for bankruptcy and loose its' corporate assets WITH NO FURTHER COST TO ITS' MEMBERSHIP.

?pool? who really cares

?clubhouse? who needs it w/o a pool

?entrance decorations? who really cares

?private roads? homeowners will have an 'easement by virtue of necessity'

?drainage facilities? the 'county' will need to set-up a special tax district - probably cheaper

?your private home? safe IF the HOA was incorporated


Sheeeeez ...... did we forget how to screw over creditors ?





RoyalP


Posts:0


05/28/2019 7:33 PM  
Posted By JoeB20 on 05/28/2019 7:29 PM
I'm just guessing here, but I would imagine that if the HOA is incorporated, it takes all liability on itself and has the option bringing all that liability to an end with bankruptcy. So worst case, the HOA loses its assets and goes bankrupt. It practice it probably is a cheaper/better option on smaller losses to not go bankrupt and instead raise money from the members. But in the worst case, go bankrupt and the homeowners are safe.

But without a corporation there would not be the option of the HOA taking the liabilities with it into bankruptcy to protect the homeowners.

But I'm not a lawyer, so I may way off...?






EXACTLY CORRECT

our posts 'crossed'


NpS
(Pennsylvania)

Posts:3658


05/29/2019 2:31 AM  
Posted By JoeB20 on 05/28/2019 7:29 PM
I'm just guessing here, but I would imagine that if the HOA is incorporated, it takes all liability on itself and has the option bringing all that liability to an end with bankruptcy. So worst case, the HOA loses its assets and goes bankrupt. It practice it probably is a cheaper/better option on smaller losses to not go bankrupt and instead raise money from the members. But in the worst case, go bankrupt and the homeowners are safe.

But without a corporation there would not be the option of the HOA taking the liabilities with it into bankruptcy to protect the homeowners.

But I'm not a lawyer, so I may way off...?




Not exactly.

1. The process that a failing HOA would go through is receivership rather than bankruptcy. Courts are involved in both, but things are resolved differently. Your suggestion about avoiding bankruptcy is, in fact, what the receivership process is designed to do.

2. Even if the process was through a bankruptcy court, the assets wouldn't just go away. They'd get transferred to someone else.

3. Any right in land that the HOA has would initially be considered as an asset by the courts. That right in land comes from the CC&Rs, regardless of whether the HOA is incorporated or not. (This is why I keep saying that the CC&R's effect on your land is the critical issue - because corporate status doesn't make any difference when it comes to rights in land - Ownership can be held by a corporation, a partnership, a person, a trust, and many other forms.)

4. As I think you discovered when you looked into the regulations on domestic corporations, failing to maintain corporate status is a slap on the wrist offense that is easily rectified by filing papers and spending money.

Sikubali jukumu. Read all posts at your own risk.
NpS
(Pennsylvania)

Posts:3658


05/29/2019 3:26 AM  
Posted By NpS on 05/29/2019 2:31 AM
Posted By JoeB20 on 05/28/2019 7:29 PM
I'm just guessing here, but I would imagine that if the HOA is incorporated, it takes all liability on itself and has the option bringing all that liability to an end with bankruptcy. So worst case, the HOA loses its assets and goes bankrupt. It practice it probably is a cheaper/better option on smaller losses to not go bankrupt and instead raise money from the members. But in the worst case, go bankrupt and the homeowners are safe.

But without a corporation there would not be the option of the HOA taking the liabilities with it into bankruptcy to protect the homeowners.

But I'm not a lawyer, so I may way off...?




Not exactly.

1. The process that a failing HOA would go through is receivership rather than bankruptcy. Courts are involved in both, but things are resolved differently. Your suggestion about avoiding bankruptcy is, in fact, what the receivership process is designed to do.

2. Even if the process was through a bankruptcy court, the assets wouldn't just go away. They'd get transferred to someone else.

3. Any right in land that the HOA has would initially be considered as an asset by the courts. That right in land comes from the CC&Rs, regardless of whether the HOA is incorporated or not. (This is why I keep saying that the CC&R's effect on your land is the critical issue - because corporate status doesn't make any difference when it comes to rights in land - Ownership can be held by a corporation, a partnership, a person, a trust, and many other forms.)

4. As I think you discovered when you looked into the regulations on domestic corporations, failing to maintain corporate status is a slap on the wrist offense that is easily rectified by filing papers and spending money.




5. For the most part, the law of corporations and the law of real property have different origins and histories. Real estate law has ancient roots that still affect legal thinking today. Corporate law is much more recent. I live around 10 miles from Delaware which has been the center of corporate law in the US for more than a century. I'm very familiar with the workings of the Delaware legal system.

Sikubali jukumu. Read all posts at your own risk.
JoeB20
(Kansas)

Posts:35


06/06/2019 8:23 PM  
Update -

I contacted a law firm with several attornys who focus on real estate. I emailed one who's profile looked like he had a lot of expertise, and he forwarded my email to the new guy a couple years out of school. I figured that's fine, the firm has the expertise and and he can ask whatever he needs.

Here is the list of questions I posted before, and the answers I got. It was 1 hour of rapid discussion back and forth between us.

1)Confirm we have no protection from liability while the corporation is forfeited (for the board & members)
>> not discussed in fine detail, but the personal liability from loss of the corporate sheild is in line with what was discussed here - i.e. we're all exposed.

2) Can I refile my deed/title without conditions since corporation is forfeited? What extra documentation can/should we include beyond what the title company may require (e.g. documenting forfeited status)?
>> probably not


3) If I did get the deed refiled, and the HOA sued, does title insurance paid on the reissuance of the deed cover it? Or does my umbrella insurance?
>> n/a, not discussed - other than if I refiled following disolving the HOA, the title insurance may try to exclude it from coverage. I pointed out since the HOA has no money, they won't take frivilous legal action, so all I need is a credible filing and and it will not be contested. He agreed.


4) Can HOA enforce articles/by-laws/CC&R while its corporation is forfeited?
>> they can act as individuals. Whether or not they can act as an HOA is somewhat debatable. If they tried to file a lien, the registrar of deeds may reject it. If not, it could maybe be contested. Also discussed if the HOA can collect dues while in forfeiture, he thought they couldn't force the issue, but if people are voluntarily paying they probably are fine.


5) Since the charter has been forfeited, do persons other than the corporation who were given rights under its governing documents still have them? (i.e. can residents take enforcement action)
>> per covenenants and state law, any resident can pursue enforcement action


6) What legal action can I take to force HOA to clean up taxes, corporate status, etc? Cost? What would that procedure look like? If pursued, this would be a strategy to force the HOA into costs it cannot afford for the purpose of forcing dissolution. Is this a viable strategy?
>> any member can bring an action to force the HOA to incorporate, do taxes, etc. Since it is simply trying to force the HOA to follow its own clear rules, recovery of legal fees is a strong possibility (so - no guarantees but - its likely doable to sue the HOA using its own money).


7)If the articles are for the GV overall, can dissolution be specific to GV4?
>> not discussed, I have since figured out other additions have their own corporations, in good standing.

8) Specific process for dissolution? One sentence in articles seems to govern, right? It appears that the additional restrictions are for disposing of assets (i.e. just a problem for the board while winding it down, with no impact on the decision to dissolve – right?) What about recording? Then what, refile deed? What about residents who don’t refile deed?
>> yes, one sentence governs the decision to disolve. He said someone may try to claim covenants disclosure rules apply, that's not likely to work. The articles indicate no process, signatures from 2/3 settles it.


9) Any conflict of interest concerns regarding me trying to dissolve it? (e.g. don’t say anything that could be construed as trying to scare people while taking signatures to dissolve)
>> no problem. Even if I were to sue, I could remain on the board without issue.

10) May I generally assume as long as I do not act maliciously, any liability I incur in this activity will be covered by my umbrella liability insurance?
>> only discussed general liability resulting from the lack of corporate shield - he said it depends on the policy, ask the insurance company

11) CC&R Section 11.01 says:
Covenants Running With the Land. The covenants and restrictions of this Declaration shall run with and bind the land for a term of twenty (20) years from the date this Declaration is recorded, after which time they shall be automatically extended for successive periods of ten ( 10) years.

since the corporation was forfeited when the 20 years passed, did it still automatically extend? (or can we declare it invalid on the grounds it did not extend?)

>> He didn't know, but probably not affected


12) Can anyone (me?) reincorporate the HOA? What would that look like? Is it for all of GV, or just GV4?

>> he had not heard of this. I think he may have been a little amused at it. He thought it could minimally be a stall and harassment tactic. But I prefer clear and indisputable action rather than underhanded attempts, so I don't plan on pursuing this.

13)The HOA cannot directly contact tenants for enforcement actions, true? Can the landlord sue for interference if the HOA does?

>> Initially he didn't see a problem with contacting the tenant directly. Later decided that possibly there could be liability there.

14) Since I bought after the HOA corporation was forfeited, must I be a member? Is there an angle of attack here?
>> not discussed





Other:
He's represented several HOAs and individuals involved in disputs with HOAs. He thought this was a weird situation I think his basic point was that HOAs that go after people generally have the sense to keep their house in order. He thought the most sensible course of action is for the HOA to disolve.

My stance:
- I don't think it is reasonable for the HOA to touch the covenants without cleaning up its situation entirely. They will have to raise meaningful cash to do this, which will require explanations, which probably isn't going to go over well.
- If the covenants are touched, I want a question of "should we disolve" on the ballot.
- The board members are nice people (though I disagree with some of their objectives). I'm hoping that some clarity about the facts of life can redirect the board.


Here's the facts of life for our HOA:
- Any member can easily sue the HOA to follow its rules, (likely) using the HOA's money to sue it
- The HOA would have no choice but to immediately assess the the members before they could begin their defense.
- The members could then be told the HOA can't force them pay until they're incorporated (creating confusion and difficulty in getting the necessary cash)
- This creates an ideal time to try to get 40 signatures to disolve.


They won't like hearing this, but some of them I think will appreciate understanding the precarious situation they have created.
TimB4
(Virginia)

Posts:16448


06/07/2019 1:52 AM  
Posted By JoeB20 on 06/06/2019 8:23 PM
[emphasis added]

6) What legal action can I take to force HOA to clean up taxes, corporate status, etc? Cost? What would that procedure look like? If pursued, this would be a strategy to force the HOA into costs it cannot afford for the purpose of forcing dissolution. Is this a viable strategy?
>> any member can bring an action to force the HOA to incorporate, do taxes, etc. Since it is simply trying to force the HOA to follow its own clear rules, recovery of legal fees is a strong possibility (so - no guarantees but - its likely doable to sue the HOA using its own money).





This is a poor answer and sounds like they are looking for business.

The "Association money" comes from the membership.
Hence, it's doable using your and your neighbors money.

Potential increase in Assessments and/or special assessments to answer a legal challenge is always a possibility.
TimB4
(Virginia)

Posts:16448


06/07/2019 2:05 AM  
Posted By JoeB20 on 06/06/2019 8:23 PM

Here's the facts of life for our HOA:
- Any member can easily sue the HOA to follow its rules, (likely) using the HOA's money to sue it
- The HOA would have no choice but to immediately assess the the members before they could begin their defense.
- The members could then be told the HOA can't force them pay until they're incorporated (creating confusion and difficulty in getting the necessary cash)
- This creates an ideal time to try to get 40 signatures to disolve.




Two things -

1) It's typically easy to incorporate or to have the corporation reinstated (typically filing of forms and paying fees).

Therefore, don't think that the HOA won't be able to collect properly adopted special assessments or regular assessments.


2) Dissolving an HOA is not easy even if everyone wants to do it:

Common area needs to be sold or gifted to the city/county (if they will take it).

Private roads need to become public (often the city/county won't take them)

Playgrounds/parks need to be sold/given to city/county (if they will take them) and make them public.

Storm water management will need to be addressed (special tax district is often they way this happens)

Service contracts (landscape, trash/recycling, etc.) need to be terminated or bought out and residents will have to make their own arrangements.

Electrical requirements (entrance lights, pond lights/fountains, street lights) will need to be transferred (if anyone will take them) or elimination of those services.

The covenants need to be amended to remove all requirements for an Association (architectural changes, maintenance of common areas, services requirements, etc.). This will require the correct procedures be followed.

Funds (operating/reserves) will need to be properly handled in abolishing accounts and paying final bills.


JoeB20
(Kansas)

Posts:35


06/07/2019 5:29 AM  
Posted By TimB4 on 06/07/2019 1:52 AM
Posted By JoeB20 on 06/06/2019 8:23 PM
[emphasis added]

6) What legal action can I take to force HOA to clean up taxes, corporate status, etc? Cost? What would that procedure look like? If pursued, this would be a strategy to force the HOA into costs it cannot afford for the purpose of forcing dissolution. Is this a viable strategy?
>> any member can bring an action to force the HOA to incorporate, do taxes, etc. Since it is simply trying to force the HOA to follow its own clear rules, recovery of legal fees is a strong possibility (so - no guarantees but - its likely doable to sue the HOA using its own money).





This is a poor answer and sounds like they are looking for business.

The "Association money" comes from the membership.
Hence, it's doable using your and your neighbors money.

Potential increase in Assessments and/or special assessments to answer a legal challenge is always a possibility.




Let me clarify - he did not bring that up. Near the end of the conversation I asked about how difficult it is to make the other party pay for legal expenses and he said it was a good possibility in this case. If he was looking for business, he would have brought it up himself and more forcefully. Also, his recommendation was that he thought the HOA should just disolve. I.E. his advice was for him to never have any revenue from his time with me. I also think disolving is a good solution, but there are board members who will be strongly opposed.
JoeB20
(Kansas)

Posts:35


06/07/2019 5:36 AM  
Posted By TimB4 on 06/07/2019 2:05 AM
Posted By JoeB20 on 06/06/2019 8:23 PM

Here's the facts of life for our HOA:
- Any member can easily sue the HOA to follow its rules, (likely) using the HOA's money to sue it
- The HOA would have no choice but to immediately assess the the members before they could begin their defense.
- The members could then be told the HOA can't force them pay until they're incorporated (creating confusion and difficulty in getting the necessary cash)
- This creates an ideal time to try to get 40 signatures to disolve.




Two things -

1) It's typically easy to incorporate or to have the corporation reinstated (typically filing of forms and paying fees).

Therefore, don't think that the HOA won't be able to collect properly adopted special assessments or regular assessments.


2) Dissolving an HOA is not easy even if everyone wants to do it:

Common area needs to be sold or gifted to the city/county (if they will take it).

Private roads need to become public (often the city/county won't take them)

Playgrounds/parks need to be sold/given to city/county (if they will take them) and make them public.

Storm water management will need to be addressed (special tax district is often they way this happens)

Service contracts (landscape, trash/recycling, etc.) need to be terminated or bought out and residents will have to make their own arrangements.

Electrical requirements (entrance lights, pond lights/fountains, street lights) will need to be transferred (if anyone will take them) or elimination of those services.

The covenants need to be amended to remove all requirements for an Association (architectural changes, maintenance of common areas, services requirements, etc.). This will require the correct procedures be followed.

Funds (operating/reserves) will need to be properly handled in abolishing accounts and paying final bills.









Regarding #1 - when I called the secretary of state a week or so ago, the guy added things up and guestimated it would be $760 in fees to reinstate the corporation. I don't know the exact balance, but I think the HOA has less than a thousand dollars. So yes, I agree that procedurally it is easy, but the cost of the things that need cleaned up (corp/taxes/audit) exceeds the available $ (so they'd have to do a special assessment).

Regarding #2 - the common area (a drainage ditch) was sold to the city years ago for $1. The street light cost was handed over to the city years ago. There have never been pivate roads, play grounds, etc. The assets to dispose of consist of a checking account with less than a thousand $. The laywer agreed with my assessment that the process of deciding to disolve is goverened by a single sentence (plus a few additional sentences that govern what to do with assets once the decision to disolve is final).


Again - thanks for the comments from all.
NpS
(Pennsylvania)

Posts:3658


06/07/2019 6:11 AM  
Joe

- How many units?

- How much will it cost to prepare and file dissolution papers at the Recorder of Deeds?

Thx.

Sikubali jukumu. Read all posts at your own risk.
JoeB20
(Kansas)

Posts:35


06/07/2019 9:25 AM  
Posted By NpS on 06/07/2019 6:11 AM
Joe

- How many units?

- How much will it cost to prepare and file dissolution papers at the Recorder of Deeds?

Thx.




59 units
I have emailed the register of deeds with questions and not gotten a response yet
NpS
(Pennsylvania)

Posts:3658


06/07/2019 10:25 AM  
Posted By JoeB20 on 06/07/2019 9:25 AM
Posted By NpS on 06/07/2019 6:11 AM
Joe

- How many units?

- How much will it cost to prepare and file dissolution papers at the Recorder of Deeds?

Thx.




59 units
I have emailed the register of deeds with questions and not gotten a response yet





Let's say it would cost you $760 to reinstate the corporation and $760 to prepare and file dissolution papers with the recorder of deeds.

That's $13 per unit to reinstate and $13 per unit to remove the reach of the CC&Rs from the individual lots.

In fact, if push came to shove, you could skip the reinstatement and just file the dissolution papers with the recorder of deeds. The document filed with the recorder of deeds would match up with the original CC&R document that was filed at the recorder of deeds, and that would typically satisfy any title company.

So for as little as $13-$26 per household, you could clear the title cloud. Not bad at all.


Sikubali jukumu. Read all posts at your own risk.
JohnC46
(South Carolina)

Posts:8650


06/07/2019 1:20 PM  
Posted By JoeB20 on 06/07/2019 5:36 AM
Posted By TimB4 on 06/07/2019 2:05 AM
Posted By JoeB20 on 06/06/2019 8:23 PM

Here's the facts of life for our HOA:
- Any member can easily sue the HOA to follow its rules, (likely) using the HOA's money to sue it
- The HOA would have no choice but to immediately assess the the members before they could begin their defense.
- The members could then be told the HOA can't force them pay until they're incorporated (creating confusion and difficulty in getting the necessary cash)
- This creates an ideal time to try to get 40 signatures to disolve.




Two things -

1) It's typically easy to incorporate or to have the corporation reinstated (typically filing of forms and paying fees).

Therefore, don't think that the HOA won't be able to collect properly adopted special assessments or regular assessments.


2) Dissolving an HOA is not easy even if everyone wants to do it:

Common area needs to be sold or gifted to the city/county (if they will take it).

Private roads need to become public (often the city/county won't take them)

Playgrounds/parks need to be sold/given to city/county (if they will take them) and make them public.

Storm water management will need to be addressed (special tax district is often they way this happens)

Service contracts (landscape, trash/recycling, etc.) need to be terminated or bought out and residents will have to make their own arrangements.

Electrical requirements (entrance lights, pond lights/fountains, street lights) will need to be transferred (if anyone will take them) or elimination of those services.

The covenants need to be amended to remove all requirements for an Association (architectural changes, maintenance of common areas, services requirements, etc.). This will require the correct procedures be followed.

Funds (operating/reserves) will need to be properly handled in abolishing accounts and paying final bills.









Regarding #1 - when I called the secretary of state a week or so ago, the guy added things up and guestimated it would be $760 in fees to reinstate the corporation. I don't know the exact balance, but I think the HOA has less than a thousand dollars. So yes, I agree that procedurally it is easy, but the cost of the things that need cleaned up (corp/taxes/audit) exceeds the available $ (so they'd have to do a special assessment).

Regarding #2 - the common area (a drainage ditch) was sold to the city years ago for $1. The street light cost was handed over to the city years ago. There have never been pivate roads, play grounds, etc. The assets to dispose of consist of a checking account with less than a thousand $. The laywer agreed with my assessment that the process of deciding to disolve is goverened by a single sentence (plus a few additional sentences that govern what to do with assets once the decision to disolve is final).


Again - thanks for the comments from all.





John

Is there nothing common like, land, parking pace, entry way, etc.?
MelissaP1
(Alabama)

Posts:8503


06/07/2019 3:55 PM  
May I ask what end result do you want in this? Are you wanting to disband the HOA to say "Screw You Board members!"? Are you wanting to own the HOA to tell board members they work for you? Do you no longer want an HOA in existence? What is the end result you are pursuing?

Who is with you on this endeavor? If your disbanding or wanting to form a new HOA, then you must have agreement of most if not all the existing membership. It's not a one man battle. It's a neighborhood one...

I still don't see why you can't just have the HOA membership pay the incorporation fee necessary to renew and just start living by the rules. Which does include the ability to vote in or out board members. This would be the route I would take. Make sure the HOA is on incorporated status and make changes in leadership to follow the rules that already exist. Since the rules allow the membership to make changes, then incorporate those also.

Why re-invent the wheel? You got all the tools to make changes, use them....

Former HOA President
JoeB20
(Kansas)

Posts:35


06/07/2019 3:57 PM  
John -
years ago the HOA owned a "common area." It was basically a drainage ditch that the developer pushed off on the HOA to maintain. Prior HOA board members found out that the city had taken over maintenance of other drainage ditches from other HOAs, so they talked the city into buying the common area for $1.

So the HOA does not own any land. Part of the proposed changes to the covenants is striking all language about common area because it is no longer applicable.

This raises another issue, because the way I read the requirements for IRS form 1120-H, we do not meet the expenses test. It appears to me that to qualify for 1120-H, 90% of expenses must be somehow related to maintaining the common property. Since we have none, it looks like our HOA is too simple to use the simple HOA tax form.
JoeB20
(Kansas)

Posts:35


06/07/2019 4:14 PM  

>> May I ask what end result do you want in this? <<
Sure you may ask.

>> Are you wanting to disband the HOA to say "Screw You Board members!"? <<
Not at all. I don't want to screw anyone. In fact several times in my discussion with the attorney I said the board members are genuinely nice people, we just have a significant disagreement what the HOA should do. The president is very diplomatic, but he is stuck in a difficult task.

>> Are you wanting to own the HOA to tell board members they work for you?<<
No, I believe the board members are suposed to pursue the best interest and desires of the comunity they represent. Currently most people are apathetic. I expect that with greater awareness of the situation a lot of people will be interested in disovling it. I believe the members have a right to know the full situation and make an informed decision


>> Do you no longer want an HOA in existence? What is the end result you are pursuing? <<
I want 2 things:
1) no additional restrictions (if possible, though obviously none of us get to dictate)
2) no personal risk from a few members of the HOA making war against the landlords and others
I was totally fine with my minimally active HOA. The $20/year is not worth complaining about.
What was proposed as changes last year makes clear that a small number of people want a number of new rules and meaningful enforcement power.
If the are willing to let the status quo stand as it has for 20 years (weak hoa, no power to heckle people), that's good enough for me. If they want power to start yanking people around I want to block it while I still can.


>> Who is with you on this endeavor? <<
I don't know many people in the neighborhood, but excluding board members there is one person I expect to be in favor of keeping the HOA. Everyone else who I have an idea of where they stand, I expect them to support disolving. But like I said, I don't know many people.


>> If your disbanding or wanting to form a new HOA, then you must have agreement of most if not all the existing membership. It's not a one man battle. It's a neighborhood one... <<
The articles of incorporation say 2/3 written assent is required to disolve it. I have no desire to form a new HOA.


>> I still don't see why you can't just have the HOA membership pay the incorporation fee necessary to renew and just start living by the rules. <<

There are a number of stupid rules that everyone violates (no irrigation wells, most have them. no parking in driveway, must have heat pump, etc). Currently every board member and (I assume) every covenant commitee member is in violation of the covenants. What is being proposed can be described as: removing everything that inconveniences the board members and adding new restrictions that only inconvenience a few.

The only possible way to start living by the rules is to start living by a subset of the rules that suit the people trying to micromanage.
MelissaP1
(Alabama)

Posts:8503


06/08/2019 6:19 AM  
It sounds like your going to be shooting yourself in the foot with these plans. Kind of saving your nose despite your face.

What your facing is the SAME issues EVERY HOA faces. It's apathy and no one enforcing the restrictions yada yada… Removing the corporation of the HOA doesn't do you any favors in pursuing the ability to enforce restrictions. It hurts it.

If your issue is the lack of restriction enforcement, then need to make changes to the culture of your HOA or the rules. The HOA is managed by it's members for it's members. So it can set up the rules and enforce them on how it wants to live. Let's say for example everyone LOVES boats. The rules say "No boats" parked in driveways etc... Well most members have or want a boat. The HOA under it's corporate status can then get a majority vote of it's membership interested in changing that rule to allow boats.

You don't have that corporate structure and protection, then you all lose the ability to change or to enforce any rules. There is no structure or even ability to collect money to make things happen. It may be that the restrictions stay and each individual has to take the initiative to sue a neighbor to enforce them.

Again, your options are to step up and start getting thing straightened out. Our HOA we started bringing the rules to each and every meeting. We found what we could or could not do in the ways of enforcement. We had the right to fine but never did. Instead we chose to fix the issue and send the owner the bill. IF they did not pay that bill, we then liened for that amount owed plus legal expenses.

So it sounds like your just frustrated with the rules enforcement. No one wants to be the bad guy or take on that responsibility to enforce them. Plus may be limited on how to address them. I'd suggest instead of looking for disbandment, the routes to take to enforce what you and other want out.

Former HOA President
PaulJ6
(New York)

Posts:273


06/08/2019 7:09 AM  
JoeB20, I haven't followed this in full but your best approach might just be to convince people (particularly board members) of the wisdom of your approach and move forward in a mutually-agreeable way.
JoeB20
(Kansas)

Posts:35


06/08/2019 7:21 AM  
>>If your issue is the lack of restriction enforcement...<<
I wouldn't say that. I would say the rules are unenforcable as a matter of law and and reasonableness. Several of the rules are violated by nearly 100% of the members. I assume no member is in total compliance. Compliance whith that handful of rules is not attainable. I don't consider it reasonable for me (or others) to wipe away the rules that inconvenience me, but not wipe away the rules that inconvenience other members. The only path to enforceability is for a majority to take care of themselves at the expense of the others. Its like the quip about pure democracy being two wolves and a sheep voting on what's for dinner.

I think being on the board I can ensure that the final proposal of covenants changes will not inconvenience me. But I know for certain they intend to go after other people once the covenants are revised. I have an ethical problem with sitting by while that happens.


>>You don't have that corporate structure and protection, then you all lose the ability to change or to enforce any rules. There is no structure or even ability to collect money to make things happen.<<
I believe the members have a right to know this.



I found out yesterday that apparently several violation letters have been sent this year to various people. I am on the enforcement committee, there has been nothing referred to the enforcement committee all year. One of the people who received a violation letter was discussed at a board meeting. Someone pointed out some extenuating circumstances and I had the impression no one would hassle him. The others were not discussed at all at any board meetings. I think I know who is sending the letters. I suspect they are trying to be discreet to avoid giving the new board members (me + one other) a bad feeling about their appetite for enforcement.
JoeB20
(Kansas)

Posts:35


06/08/2019 7:29 AM  
Posted By PaulJ6 on 06/08/2019 7:09 AM
JoeB20, I haven't followed this in full but your best approach might just be to convince people (particularly board members) of the wisdom of your approach and move forward in a mutually-agreeable way.





I'm thinking I will contact the president of the board (who is a very nice and very diplomatic guy) and suggest we meet to discuss why I belive the HOA should disolve. I'm confident he and I can have a polite discussion.

I also think when I see people out in their yard I'll just pull into their driveway and introduce myself and ask them what they think about the HOA. As I've started paying more attention to people's houses more, I suspect quite a number of people may have gotten violation letters.
PaulJ6
(New York)

Posts:273


06/08/2019 7:33 AM  
Posted By JoeB20 on 06/08/2019 7:29 AM
Posted By PaulJ6 on 06/08/2019 7:09 AM
JoeB20, I haven't followed this in full but your best approach might just be to convince people (particularly board members) of the wisdom of your approach and move forward in a mutually-agreeable way.





I'm thinking I will contact the president of the board (who is a very nice and very diplomatic guy) and suggest we meet to discuss why I belive the HOA should disolve. I'm confident he and I can have a polite discussion.

I also think when I see people out in their yard I'll just pull into their driveway and introduce myself and ask them what they think about the HOA. As I've started paying more attention to people's houses more, I suspect quite a number of people may have gotten violation letters.




That's the best approach.

Legally, the HOA is a mess.

A mess can best be cleaned up by people just reaching a general consensus.
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