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Subject: Inground Pools partially on HOA property
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CliffordL
(New Jersey)

Posts:12


05/08/2020 7:58 PM  
Hello everyone.

First-time poster. We have recently ousted a charlatan of a President ( no elections for 20 years, maybe facing RICO charges) Now we are finding out we were in Administrative Dissolution for 20 years etc. Total tool. Shoddy, illegal liens everywhere, no record of payments, personal approvals of CC&R violations (siding color changes) the list goes on.

We have now had a proper Board elected. Fixed our state issues. Now I'm finding Inground pools build partially on HOA property with fences extended as far as 20ft into retention and spillway areas. Some are recent, some older, none qualify for Squatters Rights yet (under 20 years). Those encroaching the retention areas are leeching leftover pool sand into the spillway depository and causing additional damage and cleanup needs (not truly a retention pond) Its a mess.

Permits were issued and signed off from the town on these pools although they were archived mysteriously with the 30-year-old permits. I can't even offer these people a purchase option as these encroachments occur on retention area embankments that were EPA signed off on 30 years ago as all our spillway needs end up in a lovely local lake.

Whew. Sorry, i know that is exhausting. Try living the dream. Any advice is appreciated.

Clifford R. Lane, III
President
GeorgeS21
(Florida)

Posts:2681


05/08/2020 8:24 PM  
Uh, so the property owners supported this for 20;years?

Single family houses?
How many?
CCRs and Bylaws and Rules and Regulations?
CliffordL
(New Jersey)

Posts:12


05/09/2020 7:24 AM  
In all honesty, they ignored it. The HOA fee is only $40 a month. On $300k properties with 8K a year in property taxes, its quite low. I think most people would like their HOA to just disappear, until that is, their neighbor starts painting their house purple. Then the emails start. This post wasn't really a discussion as to why this was allowed to occur for 20 years. There isn't enough room on the internet for that.
GeorgeS21
(Florida)

Posts:2681


05/09/2020 7:30 AM  
But the lack of interest - obviously gross apathy - relates to the likelihood of it being “fixable.”

Dissolution as in there isn’t an HOA any longer? As in the state has already pulled the corporate status?
CliffordL
(New Jersey)

Posts:12


05/09/2020 7:30 AM  
It is composed of 82 Twin homes. The Bylaws magically disappeared after the final original members of the Board moved or died. Around that time a magical Resolution did appear that released the Officers from paying HOA dues. Yes you read that right. I managed to find these elusive Bylaws and presented them to the Members door to door. This is how we finally removed the acting president eventually. IN those Bylaws we found that is emphatically stated that Officers or Trustees were not to be compensated.

Unfortunately there are many years worth of work to be done to fix what was left to its own devices.
CliffordL
(New Jersey)

Posts:12


05/09/2020 7:32 AM  
In NJ the state puts a Corporation into Administrative Dissolution after 6 years of not filing an annual report. That allows the Corporate officers to commence with the dissolving
of that corporation. The state never actually dissolved it. Oddly
GeorgeS21
(Florida)

Posts:2681


05/09/2020 8:12 AM  
Clifford,

OK - so, twin homes means duplex?

You need to detune the language to remove things like "magic" - we get the point you are trying to make, but the president can't win with this sort of approach. Facts are what matter. Not emotion.

You need a website - a place to gather and post all the legal docs - NOT rumination from board or owners, but to ensure everyone can see for themselves.

You didn't answer as to whether there are CCRs or Rules and Regulations - how about architectural standards?

I'm not certain I follow about the NJ process - are you certain you still have an HOA? Certain as in legal opinion or agreement from representative of NJ government?
CliffordL
(New Jersey)

Posts:12


05/10/2020 5:18 AM  
Duplex in my experience would be multi-family, that is not the case here. Side by Side mirrored units are what we have. Individually owned. Sharing a common wall.

The Board has just appropriated funds for the website, I agree that is paramount to fair access. Everyone has been updated (by mail) with current Governing Docs which
at the moment consist of CC&R's and the Bylaws.

The Board has approved a rough draft of 5 Resolutions that are at counsel currently. Those include expansive R&R's, Trash, Rental, Fee Schedule, Collection Procedures & Policy.
I have established a virtual platform once these are greenlighted, for a public meeting.

The architectural guidelines are a little vague in areas, but VERY specific on such things as exterior color, size, of siding, trim.

Contained in the CC&R's are guidance for the exterior, such as the creation of an ARC (Arch. Review Committee), limits on shed placement, fencing, additions.

Once I recovered the Corporations EID in its creation documents, I approached the state online. That is when I discovered that the Annual Report had not been filed for over 20 years.
Thus, the State had placed the Corporation from "not in good standing" to "Administrative Dissolution". Luckily, the state was offering a one time window of 3 months for reconciliation
for a large fee. Simply filing an annual report and cutting a check avoided all the red tape and back fees that would have been owed. It might have even saved some money in the long run.
Currently we are in Good Standing with the State and are allowed to perform the actions needed for running the daily operations of the Corporation.

Our thought process in most of this is that the previous President was acting outside the scope of their authority if they performed any function other than the process of dissolving the corporation under the NJ statutes. They would most likely not be able to avail themselves of the D&O insurance while acting outside their fiduciary duty, should legal action be brought for past decisions.

I am confident with our process, I think we have covered many bases in 2 months with a quarantine going on. Our concern is regarding the liability of inground pools encroaching on HOA property.
One built as recently as last October, 2019
CathyA3
(Ohio)

Posts:953


05/10/2020 6:16 AM  
Some things you want to check:

* Insurance on HOA common areas, and Directors & Officers insurance for the board. I assume you have the latter - nobody should put their personal assets at risk when they volunteer to serve their community. Talk to your insurance agent about the encroaching pools to see if there are any gotchas that have been overlooked.

* Do you have an HOA attorney? If not find one, and be sure the person is well-versed in community association (not real estate) law. I think you will want to get an attorney's opinion on the pools and what the HOA can reasonably and lawfully do after all this time. The courts are big on "reasonable" when deciding cases that aren't clearly black and white. The easiest thing may be to sell the extra land to the owners of the pools, but that will require a lot of legal paperwork as well as an affirmative vote from the membership since you will be reducing the common area - and it may or may not be lawful in your state.

* I second the idea of having an HOA web site where you can put the CC&Rs, financials, board meeting minutes, architectural guidelines, and other items. If you have a board member who is reasonably savvy about this stuff, you can create a site for modest cost (a few hundred dollars at most). Being able to do things online is especially useful nowadays.

You're probably in for a lot of squawking, but in my mind everyone is to blame: the people who built pools on HOA property and the apathetic homeowners who allowed this to happen and ignored it for all these years. I suspect everyone is going to get a painful lesson on the realities of owning property in an HOA.
GeorgeS21
(Florida)

Posts:2681


05/10/2020 7:52 AM  
Yeah - agree with Cathy.

I would summarize options for the future and pick the one that offers least cost to benefits - I'm talking real benefits, not fighting over each inch of property, or who did what to who (unless criminal), but rather how to understand what happened over the last 20 years, development of a plan to re-establish control, communications that are clear and often, legal opinions to back up directions and decisions, and a non-board group to continue to work the issue that reports to the board.
CliffordL
(New Jersey)

Posts:12


05/10/2020 8:35 AM  
Thank you both for your comments.

It is true that most people did not pay much attention to what was going on. Those that did felt helpless as their complaints fell on deaf ears or
were simply ignored or were labeled as 'Troublemakers". As I said, $40 a month is not enough to make a stink about, probably the reason it was $40
a month for 20 years. (no, no budgets, no reserve study, no reserve)

We are trying to concentrate on the items that could cause harm to the Association and its Members. It is a, "pick your fights" scenario.
Our biggest concern is the Pools that are constructed on the embankment of the spillway. The way it was property was designed, we
can no longer get earth moving equipment back there due to the encroachments.

I will post a follow up to let everyone know the outcome, on the outset that another board runs into this problem.

Just a note. Youtube channel: Scottsdale Arizona has some very educational videos up from prominent HOA Attorneys/Board members. Great Resource
AugustinD


Posts:3364


05/10/2020 9:00 AM  
Posted By CathyA3 on 05/10/2020 6:16 AM
I think you will want to get an attorney's opinion on the pools and what the HOA can reasonably and lawfully do after all this time. The courts are big on "reasonable" when deciding cases that aren't clearly black and white. The easiest thing may be to sell the extra land to the owners of the pools, but that will require a lot of legal paperwork as well as an affirmative vote from the membership since you will be reducing the common area - and it may or may not be lawful in your state.
-- I agree with the above, with the caveat that the OP said sale of the land is likely not possible (see below). Competent HOA attorneys are emphatic about the unacceptability of HOA members encroaching on HOA common area. The potential liability issues for the HOA are enormous. I think this HOA's insurer should be informed immediately of the situation and that the HOA is using an attorney to rectify it.
Posted By CliffordL on 05/08/2020 7:58 PM
I'm finding Inground pools build partially on HOA property with fences extended as far as 20ft into retention and spillway areas. Some are recent, some older, none qualify for Squatters Rights yet (under 20 years). Those encroaching the retention areas are leeching leftover pool sand into the spillway depository and causing additional damage and cleanup needs (not truly a retention pond) Its a mess. Permits were issued and signed off from the town on these pools although they were archived mysteriously with the 30-year-old permits. I can't even offer these people a purchase option as these encroachments occur on retention area embankments that were EPA signed off on 30 years ago as all our spillway needs end up in a lovely local lake.
-- Are you saying that the EPA approved the pools and encroachments? Or are you saying just the opposite? It sounds like a consultation with the EPA (along with a competent HOA attorney and the HOA's insurer) would be appropriate.

-- I believe the encroachment issues (with in-ground pools installed) could be a years long dispute with many attorneys (the HOA's, the City's, individual owners') involved.

-- I think many an owner will say something like, 'Things have been fine for decades. Why are you making all this fuss?' The answer is because corporate law and the covenants require you to. But these folks are likely not going to understand.

-- I understand adverse possession law is unlikely to kick in here, due to NJ's 20-year and other requirements. But there is a question in my mind about whether the covenants on who owns what land within the HOA have been abandoned. If so, perhaps the HOA can lawfully say this land, on which individual owners' in-ground pool sits, is not the HOA's land. Then inform the EPA and city as needed, putting the ball in the EPA's (and city's?) court. Drainage concerns are huge. New plats will probably have to be drawn up and recorded.

-- The OP referred to the corporation having been on the cusp of being administratively dissolved by the state. For the archives, a few observations on this. First states do not like doing this, and state law tends to be set up to allow a corporation to revive itself. Second, dissolution of a corporation does not dissolve the covenants. Third, dissolution of a corporation does not cause the ownership of the former corporation's real estate to, say, suddenly revert to the state. Even though the corporation is dissolved, the legal rights to the real estate do not change meaningfully.
GeorgeS21
(Florida)

Posts:2681


05/10/2020 9:30 AM  
Agree legal rights to real estate do not dissolve - but, if the HOA (corporate entity) is dissolved, it makes it very difficult to put together a fix. It also is likely to decrease property values.
AugustinD


Posts:3364


05/10/2020 10:18 AM  
Posted By GeorgeS21 on 05/10/2020 9:30 AM
Agree legal rights to real estate do not dissolve - but, if the HOA (corporate entity) is dissolved, it makes it very difficult to put together a fix. It also is likely to decrease property values.
From recent experience on a non-HOA land use dispute, I believe reviving the corporation is often not difficult.
KellyM3
(North Carolina)

Posts:1509


05/10/2020 12:22 PM  
Cliff,

I'd forget it and move on due to precedent if the community has accepted it for nearly 20 years and pool installations were permit-approved and HOA approved installations. Plus, if your HOA was effective "dissolved," forget about it. Don't die on that mountain.

Sounds like you can be very constructive in creating the HOA board leadership culture that is needed going foward. It's easy to become a benevolent and evil tyrant when you first join an HOA board and see problems in every corner of your community.
JohnC46
(South Carolina)

Posts:9461


05/10/2020 12:52 PM  
Posted By KellyM3 on 05/10/2020 12:22 PM
Cliff,

I'd forget it and move on due to precedent if the community has accepted it for nearly 20 years and pool installations were permit-approved and HOA approved installations. Plus, if your HOA was effective "dissolved," forget about it. Don't die on that mountain.

Sounds like you can be very constructive in creating the HOA board leadership culture that is needed going foward. It's easy to become a benevolent and evil tyrant when you first join an HOA board and see problems in every corner of your community.




Sound advice.
AugustinD


Posts:3364


05/10/2020 1:28 PM  
Posted By KellyM3 on 05/10/2020 12:22 PM
I'd forget it and move on due to precedent if the community has accepted it for nearly 20 years and pool installations were permit-approved and HOA approved installations.
Cover-ups of a situation that poses a significant liability risk to the HOA can be successful.
Posted By CliffordL on 05/08/2020 7:58 PM
these encroachments occur on retention area embankments that were EPA signed off on 30 years ago as all our spillway needs end up in a lovely local lake.
Posted By CliffordL on 05/10/2020 8:35 AM
Our biggest concern is the Pools that are constructed on the embankment of the spillway. The way it was property was designed, we can no longer get earth moving equipment back there due to the encroachments.
CliffordL
(New Jersey)

Posts:12


05/10/2020 1:28 PM  

These particular pools are new (oct 2019) or Id agree with you. I'm very cautious about getting the HOA into an extensive and expensive battle. I have to offset that with the possibility
of selective enforcement if other people want to install pools in the future but don't have enough land to do so. I don't think this is an issue we can leave at rest no matter how much I would like to.

If even one Member hires an attorney and says we are not abiding by Corporate Law or the Governing Documents, we are going to court anyway. I'd rather go for the right reasons than be on the wrong end of that stick. If you do not act within your fiduciary duty, there is chance the D&O Insurance will not cover your defense. Also, the community has no idea of these encroachments yet. I am still in discovery with many issues until we can have a proper, public meeting.

Knowing how frustrated the members were at the General Election meeting, (2/3 showed to vote, which was record-breaking) I can only imagine the outrage when this and other items go public.

CliffordL
(New Jersey)

Posts:12


05/10/2020 1:34 PM  
I should rephrase.

The ORIGINAL grading, design, and engineering plans for the retention area were EPA approved 30 years ago because the final destination is a Lake in our town.
The HOA still owns all the land. Any alteration or modification to that area must be presented to the EPA by a Professional Engineering firm.

I hope that clarifies any ambiguity in my original postings.
AugustinD


Posts:3364


05/10/2020 1:46 PM  
Posted By CliffordL on 05/10/2020 1:34 PM
The ORIGINAL grading, design, and engineering plans for the retention area were EPA approved 30 years ago because the final destination is a Lake in our town. The HOA still owns all the land.
I'd say: At least until a court rules the covenants regarding lot boundaries have been abandoned.
Posted By CliffordL on 05/10/2020 1:34 PM
Any proposed alteration or modification to that area must be presented to the EPA by a Professional Engineering firm.
To me, this gives a good idea of the next steps:

-- Contact the EPA.

-- Explain what happened.

-- Consider the possibility of the corporation facing an EPA fine. Since the present board of the corporation was so honest, maybe the fine will be minimal.

-- Do what the EPA directs. Which could be expensive. Or it is possible the present design is acceptable with a few alterations or possibly a maintenance agreement between the City and your HOA.

(I am speaking from a bit of experience with subdivision development; statutory drainage requirements; and EPA approval.)
JohnC46
(South Carolina)

Posts:9461


05/11/2020 10:47 AM  
Cliff

What do you want these pool owners to do?
KellyM3
(North Carolina)

Posts:1509


05/11/2020 4:13 PM  
Please keep us informed as the war in your community unfolds. I can't imagine this in a real-life scenario where I seek and receive HOA approval AND Town Permit Office approval (thus following ALL protocol asked of me as a homeowner) only to have the new HOA president attempt to have me demolish a huge investment that I - and others - have legally installed by all measures.

I understand the easement part BUT the town permitting process is designed to prevent such occurrences. You sure these pools are permitted? If they were, you better watch out.
CliffordL
(New Jersey)

Posts:12


05/11/2020 7:41 PM  
Posted By JohnC46 on 05/11/2020 10:47 AM
Cliff

What do you want these pool owners to do?




That is the Million Dollar question isn't it.

I don't have the answer. Maybe I do, maybe it involves a bulldozer and a tough lesson.
Let the homeowner seek remedy from whomever told him it was ok.

CliffordL
(New Jersey)

Posts:12


05/11/2020 7:49 PM  
Posted By KellyM3 on 05/11/2020 4:13 PM
Please keep us informed as the war in your community unfolds. I can't imagine this in a real-life scenario where I seek and receive HOA approval AND Town Permit Office approval (thus following ALL protocol asked of me as a homeowner) only to have the new HOA president attempt to have me demolish a huge investment that I - and others - have legally installed by all measures.

I understand the easement part BUT the town permitting process is designed to prevent such occurrences. You sure these pools are permitted? If they were, you better watch out.




I have had the permits sent to me. They are signed off on and were buried. It took weeks digging in archive for my contact to find them. There are no surveys with setbacks in the documents. Just a rough sketch with no fence lines or property lines on the diagram. These were slid through as favors we have no doubt.

I will definitely circle back to this for you all.
CliffordL
(New Jersey)

Posts:12


05/11/2020 7:53 PM  
I will bring this entire post (names redacted) and its responses to the Board for insight and discovery. You all are very generous with your time and I do thank everyone that offered some input. I realize there is no clear solution per se.
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