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Subject: Small FL HOA has interest in splitting in 2
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SuzannC
(Florida)

Posts:4


10/30/2019 12:01 PM  
Hi Im on the board and of townhome community in FL where as there are only 44 units- 32 on one side of pond and 12 on the other. The side with 12 has made some demands on the board and basically stated that if they could not get more representation on the board, they either want their own budget and not pay for gate, sidewalk or pool expenses. And last option, they would like to split and divide the reserves. We are in the Tampa area, has anyone experienced this and does anyone know of an attorney in this area that you can recommend?
GenoS
(Florida)

Posts:3328


10/30/2019 1:31 PM  
Sounds like a very expensive proposition. You would probably have to have 100% of all owners agree to a few things including how to split the existing reserve funds, which may involve having 2 separate reserve studies done, determining which associations bear what percentage of responsibility for the drainage system (storm drains, retention/detention ponds), dividing up any other common property or amenities.

I think all it would take is 1 owner who disagrees to screw everything up and that could happen at the last minute after you've spent time and money trying to line everything up.

I'm not an attorney and you should definitely have one holding your hand and guiding you through this every step of the way. The breakaway rebels probably will want their own attorney to look out for their interests in the divorce (which is basically what this is). I think the original association would need to go away and be replaced by 2 new ones. With 100% agreement of all the owners. And probably the county. And your Water Management District.

At the end of the day I think all that will cost a fortune. The lesson to be learned is look before you leap because after that, you make your bed and then you have to lay in it when you buy into an association.
GenoS
(Florida)

Posts:3328


10/30/2019 1:32 PM  
OK, it's not like a divorce. That was a bad choice of words.
SuzannC
(Florida)

Posts:4


10/30/2019 1:42 PM  
Thank you- but it does kinda feel like a divorce. It is a small community and we are professionally managed, but for the last 20 years it has just been like a "pissing match" between the 2 sides. I wish all could just get along.
NpS
(Pennsylvania)

Posts:3865


10/30/2019 1:44 PM  
Posted By GenoS on 10/30/2019 1:32 PM
OK, it's not like a divorce. That was a bad choice of words.


I think your choice of words were appropriate. Marriage often involves little or no up-front investigation. Divorce investigations - well, you could write a book - and some do.

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

Posts:3865


10/30/2019 1:44 PM  
Posted By GenoS on 10/30/2019 1:32 PM
OK, it's not like a divorce. That was a bad choice of words.


I think your choice of words were appropriate. Marriage often involves little or no up-front investigation. Divorce investigations - well, you could write a book - and some do.

Sikubali jukumu. Read all posts at your own risk.
SueW6
(Michigan)

Posts:608


10/30/2019 1:59 PM  
Have you done an informal poll of each side? The 32 might be more than OK with the 12 “seceding from the union. “

But to continue the divorce metaphor ... of course who would get custody of the “kids” (ie the pool and the gate, road access, water system ) and the split of the savings account will be very interesting to follow.

Keep us updated!
SuzannC
(Florida)

Posts:4


10/30/2019 2:06 PM  
I will update- it was the 12 that asked to "split" and all 12 of them are in agreement. We have our annual meeting in a few weeks and will take a vote from the other 32 on whether they would like to explore this. And yes dividing reserves, etc will be not fun.
DouglasK1
(Florida)

Posts:1466


10/30/2019 2:21 PM  
As Geno mentioned this would probably require replacing the existing CCRs with new ones for each group. This might require not only 100% agreement from all owners, but possibly assent from the mortgage holders. My guess is that this is not likely to happen. If it does, I would suggest that the group of 12 should bear most of the cost since they are the ones who want the change.

Escaped former treasurer and director of a self managed association.
GenoS
(Florida)

Posts:3328


10/30/2019 2:28 PM  
When my HOA was half-built the developer bailed out. The homeowners were desperate for another developer or builder to come in and finish building so that the common expenses would be shard 100 ways instead of 50. I think if we were to split in 2 now everyone's expenses would go up. Double contracts, double bookkeeping, double attorneys, etc. We'd lose all our economies of scale. We could never do it. We have 2 detention ponds that the local Water Management District requires us to operate and maintain. They require ONE responsible party to hold the permit so there'd have to be some kind of agreement between the 2 sides that would need to be acceptable to the District. And then one side all of a sudden can't pay or won't pay and things get crazy from there.
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