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Subject: Annexation
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KellyG8
(North Carolina)

Posts:10


10/05/2020 11:20 AM  
I need some help. I live in a coastal community, which happens to be a 26 mile island with 3 townships. The township I live in has been severly mismanaged for years. To the point where we actually had to take the former Mayor to court to remove him as he wouldn't concede the election he lost. It gets worse. Needless to say the border city is very well managed and several residents want the well-managed city to annex us. I'm not sure how to begin this process, other than I've emailed the Mayor and councilman of the City we wish to annex us (awaiting response). But also, if I am part of an HOA does the entire HOA have to agree to be annexed or can some choose to be annexed and others not?
GenoS
(Florida)

Posts:4130


10/05/2020 12:12 PM  
This site is about Condos and Homeowners Associations, not municipal, county, or state political subdivisions and their politics.
KellyG8
(North Carolina)

Posts:10


10/05/2020 2:07 PM  
I understand that. My question is regarding an HOA. That was, does the entire HOA have to agree on annexation or can invidual homeowner's within an HOA go?
CathyA3
(Ohio)

Posts:1315


10/05/2020 2:58 PM  
This is probably a legal question that needs an educated opinion, and most of us around here are not lawyers. But thinking out loud...

Local municipalities do what's best for them, so you would have to convince the powers that be that it's in the city's best interest if your community were annexed. What's best for the HOA will not matter, so you need to come up with good reasons for them to take this step. Not to throw cold water on your idea, but local governments generally love HOAs - the residents often have to maintain their own streets and other infrastructure, relieving the city of that expense, yet the residents still pay taxes. That's what you're up against. City officials would have to have a compelling reason to take on the added expense.

As for whether owners have a vote, I'm trying to think of anything in my community's CC&Rs that would be affected by a change like this (we're also in a township). I can't come up with anything.

On the downside, if we were to be absorbed by the nearest city, our residents would have to start paying city income taxes as well as city utilities charges. Many residents would not be happy about that, since the absence of local taxes is a selling point.

People who believe it's a good idea to be annexed should do a thorough financial and legal analysis - because the decision may not be so clear when all the pluses and minuses are listed and dollar signs attached to them. I doubt that it's a slam dunk decision. Still it's worth thinking through the idea in more detail.
JohnC46
(South Carolina)

Posts:10014


10/05/2020 3:22 PM  
I say it is up to the municipality to annex. The HOA maigh have something to say about it but I doubt it could stop it.
AugustinD


Posts:4153


10/05/2020 3:27 PM  
Posted By KellyG8 on 10/05/2020 11:20 AM
I need some help. I live in a coastal community, which happens to be a 26 mile island with 3 townships. The township I live in has been severly mismanaged for years. To the point where we actually had to take the former Mayor to court to remove him as he wouldn't concede the election he lost. It gets worse. Needless to say the border city is very well managed and several residents want the well-managed city to annex us. I'm not sure how to begin this process, other than I've emailed the Mayor and councilman of the City we wish to annex us (awaiting response). But also, if I am part of an HOA does the entire HOA have to agree to be annexed or can some choose to be annexed and others not?


-- Did you google on this?

-- The land on which the HOA sits is next to this "border city," correct? Else I guess you would not call it a "border city."

-- It appears to me that North Carolina statutes require every owner in the HOA to sign a petition, in the statutes' specified format, requesting annexation. Read here: https://www.sog.unc.edu/resources/microsites/annexation/ , then click on "annexation statutes." Make sure you end up here: https://www.ncleg.net/enactedlegislation/statutes/html/byarticle/chapter_160a/article_4a.html

-- Per statute, a public hearing before the City's governing body occurs.

-- The governing body votes on an ordinance to annex the land on which your HOA sits.

-- I am not sure if the township, to which the HOA currently belongs, can fight this.

-- This is only an introduction that may or may not be relevant to your goals. Before today, I never heard of this in my life.

-- Spending the money for an hour or so consultation with an appropriately specialized attorney may be worth your group's time. Go in there having read the statutes linked above. Bring specific questions.
AugustinD


Posts:4153


10/05/2020 3:36 PM  
This seems to give a nice overview, including why a city would want to annex an unincorporated land area:
https://charlottenc.gov/planning/AreaPlanning/Annexation/Pages/Annexation%20-%20FAQ.aspx
KellyG8
(North Carolina)

Posts:10


10/05/2020 3:37 PM  
Thank you all for your comments, it does help me think about other things. I have googled this, our circumstances are unusual. Our town has an obvious divide between the North end and the South end. The North End has major erosion of beach and likely cannot be saved, so those in the North block anything the south wants. Most eligible to vote live in the North, so they make all the decisions when voting. The south end are mainly 2nd homes for most owners. The town has been mismanaged for so many years, that we literally had to take the former Mayor to court because he would not conceed when he lost the last election. It's so many things the town governance has done (not done) which is why everyone wants to be annexed by the border city.
JohnC46
(South Carolina)

Posts:10014


10/06/2020 10:09 AM  
Kelly

So I better understand. You want the neighboring town to annex only your association. Is this correct?
KellyG8
(North Carolina)

Posts:10


10/06/2020 10:14 AM  
No, I'm trying to see if part of an HOA can be annexed. Can those who want to go, go and those who want to stay, stay?
CathyA3
(Ohio)

Posts:1315


10/07/2020 5:38 AM  
Posted By KellyG8 on 10/06/2020 10:14 AM
No, I'm trying to see if part of an HOA can be annexed. Can those who want to go, go and those who want to stay, stay?




Very unlikely, at least not without significant (ie. expensive) legal wrangling. But you really need someone with a legal background to tell you what's involved.




JohnC46
(South Carolina)

Posts:10014


10/07/2020 9:48 AM  
Posted By CathyA3 on 10/07/2020 5:38 AM
Posted By KellyG8 on 10/06/2020 10:14 AM
No, I'm trying to see if part of an HOA can be annexed. Can those who want to go, go and those who want to stay, stay?




Very unlikely, at least not without significant (ie. expensive) legal wrangling. But you really need someone with a legal background to tell you what's involved.








I agree.
AugustinD


Posts:4153


10/07/2020 10:27 AM  
Posted By CathyA3 on 10/07/2020 5:38 AM
Very unlikely, at least not without significant (ie. expensive) legal wrangling. But you really need someone with a legal background to tell you what's involved.
The OP has spoken of a north end and south end of the HOA being at loggerheads. She has indicated that one end has residents who want their property annexed by "the border city." North Carolina's annexation statute does not seem to preclude this possibility. All that is needed is that all the owners of land that is contiguous to the city's boundaries would have to sign a petition.

According to the layperson's friend Wikipedia, annexation in the past nationwide has taken some very odd geographical shapes indeed. For example, it appears that, if just one lot on the one end seeking annexation is contiguous to the city boundary, and then lot-by-lot all other lots would be contiguous, then I think a case for annexation is possible.

I agree this needs to go to an attorney. All this forum can do is maybe help the OP prepare for a meeting with an attorney.

In theory, the end result would be a HOA whose governing documents would perhaps have to be revised to show that one end of the HOA is located in City X and the other end is located in Township Y. I do not see how this would change the restrictive covenants in any meaningful way.

Road maintenance seems addressable. In theory, City X could be responsible for the roads up to point ___ and no further.

Then again, it's common for OPs here to disregard the suggestions made. Perhaps because the suggestions are overwhelming to anyone new to land law. Maybe because OPs are asked to learn to fish instead of just being given fish. It's their choice.
CathyA3
(Ohio)

Posts:1315


10/07/2020 1:47 PM  
Posted By AugustinD on 10/07/2020 10:27 AM
Posted By CathyA3 on 10/07/2020 5:38 AM
Very unlikely, at least not without significant (ie. expensive) legal wrangling. But you really need someone with a legal background to tell you what's involved.
The OP has spoken of a north end and south end of the HOA being at loggerheads. She has indicated that one end has residents who want their property annexed by "the border city." North Carolina's annexation statute does not seem to preclude this possibility. All that is needed is that all the owners of land that is contiguous to the city's boundaries would have to sign a petition.

According to the layperson's friend Wikipedia, annexation in the past nationwide has taken some very odd geographical shapes indeed. For example, it appears that, if just one lot on the one end seeking annexation is contiguous to the city boundary, and then lot-by-lot all other lots would be contiguous, then I think a case for annexation is possible.

I agree this needs to go to an attorney. All this forum can do is maybe help the OP prepare for a meeting with an attorney.

In theory, the end result would be a HOA whose governing documents would perhaps have to be revised to show that one end of the HOA is located in City X and the other end is located in Township Y. I do not see how this would change the restrictive covenants in any meaningful way.

Road maintenance seems addressable. In theory, City X could be responsible for the roads up to point ___ and no further.

Then again, it's common for OPs here to disregard the suggestions made. Perhaps because the suggestions are overwhelming to anyone new to land law. Maybe because OPs are asked to learn to fish instead of just being given fish. It's their choice.




You may be right about all of that. What I still come back to is: what incentive does the city have to annex some or all of the HOA? Even if the HOA can jump through all of the necessary legal hurdles, they still need to convince the city that it's in the city's best interest to annex this property. The OP believes that it would be in the HOA's best interest - but that doesn't mean that all of the neighbors would believe it.

And we haven't even addressed the issue of this being an island, with all the risks of rising sea levels, hurricanes, etc. Nervous insurers could make the whole question moot.
AugustinD


Posts:4153


10/07/2020 2:19 PM  
Posted By CathyA3 on 10/07/2020 1:47 PM
What I still come back to is: what incentive does the city have to annex some or all of the HOA?
This is discussed a lot on the net, but I admit I am struggling some to get clarity. Some of the reasons a city may want to annex land:

-- Ensure growth is planned. This results in more efficiency in planning for and delivering infrastructure-related services.

-- Subject the land (to be annexed) to the city's standards, thus raising property values, thus raising revenues due to increased income from taxes on the annexed land. Why not have more taxpayers to help pay for the fire department, police department, et cetera?

-- See https://www.strongtowns.org/journal/2018/6/11/when-is-it-okay-to-annex-property

There are successful movements to de-annex as well.

In the OP's case, I admit the reasons the border city would want to agree to annex part of the land on which the HOA sits are not clear to me.

Maybe one of the important questions to ask is has this city annexed land in the recent past? If so, perhaps this is a sign that the city would be open to annexing at least part of the land on which the HOA sits.

I am ready to bet this thread is an academic exercise.
JohnC46
(South Carolina)

Posts:10014


10/07/2020 2:43 PM  
This is a complex situation and depending on the symbiotic relationship between the two HOA sections, there could be far reaching issues beyond a simple annexation. Such as services presently paid for by the association that would now be paid for by the town such as trash collection road maintenance, etc. I can see it now, The annexed part saying we are not going to keep paying for services (part of their dues) from the association that we no longer need.

If me, I would look at several methods:

1. Get the entire HOA to agree to annexation if the town is willing.

2. Divide the HOA into two different HOA's and get the town to annex the OP's HOA.

Otherwise, forget about it.


KellyG8
(North Carolina)

Posts:10


10/07/2020 4:35 PM  
Thank you all for your comments. This is a complex situation but we are moving forward. It has a lot to do with 3 townships on a 26 mile island and 1 is poorly run. We received federal funding for beach nourishment project but our town is passing because of so much mismanagement. Things most would not believe. The town we are petitioning is going to be involved with providing us direction. Our State Represetives are willing to help, so now it's up to us to get it done. I like the last idea however, if we cannot get 90% of our HOA to agree to annexation (we are currently at 80%) then we may need to split the HOA. This is about to get very interesting!
AugustinD


Posts:4153


10/07/2020 6:08 PM  
Posted By KellyG8 on 10/07/2020 4:35 PM
I like the last idea however, if we cannot get 90% of our HOA to agree to annexation (we are currently at 80%) then we may need to split the HOA. This is about to get very interesting!
You may very well "need" this, but I have never seen governing documents that will permit a split. A complete, lawful dissolution of the HOA will likely be necessary. Would you please review your HOA's Declaration and see how many of the Owners must vote to dissolve for the dissolution to lawfully occur?
AugustinD


Posts:4153


10/07/2020 6:18 PM  
Posted By KellyG8 on 10/07/2020 4:35 PM
I like the last idea however, if we cannot get 90% of our HOA to agree to annexation (we are currently at 80%) then we may need to split the HOA.
From North Carolina statute G. S. § 47F-2-118, if this HOA was formed after January 1, 1999, then:
"Except in the case of taking of all the lots by eminent domain (G.S. 47F-1-107), a
planned community may be terminated only by agreement of lot owners of lots to which at
least eighty percent (80%) of the votes in the association are allocated, or any larger percentage
the declaration specifies. The declaration may specify a smaller percentage only if all of the lots
in the planned community are restricted exclusively to nonresidential uses."

https://www.ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_47F/GS_47F-2-118.pdf

The NC Condo Act says similar for all condos formed after October 1, 1986:
"§ 47C-2-118. Termination of condominium.
(a) Except in the case of a taking of all the units by eminent domain (G.S.
47C-1-107), a condominium may be terminated only by agreement of unit owners of units
to which at least eighty percent (80%) of the votes in the association are allocated, or any
larger percentage the declaration specifies. The declaration may specify a smaller
percentage only if all of the units in the condominium are restricted exclusively to
nonresidential uses."

If KellyG8's HOA/condo meets the above requirements, then it appears her 80% are at least partly headed in the right direction towards annexation.
KellyG8
(North Carolina)

Posts:10


10/07/2020 6:20 PM  
Thank you, I have and the percentage is 90%, which seems unsurmountable. However, we already have 80% in these early discussions. So I do have confidence that 90% is attainable. There are so many years of mismanagement in this town that has led to this. Thank you!
KellyG8
(North Carolina)

Posts:10


10/07/2020 6:21 PM  
We were incorporated in 1991.
KellyG8
(North Carolina)

Posts:10


10/07/2020 6:22 PM  
We were incorporated in 1991.
AugustinD


Posts:4153


10/07/2020 6:26 PM  
KellyG8, is this a condominium?
KellyG8
(North Carolina)

Posts:10


10/07/2020 6:27 PM  
no. single family homes
AugustinD


Posts:4153


10/07/2020 6:50 PM  
Posted By KellyG8 on 10/07/2020 6:27 PM
no. single family homes
Posted By KellyG8 on 10/07/2020 6:22 PM
We were incorporated in 1991.


North Carolina statute G.S. 47-F-102 states that 47F-2-117 applies to both pre-1999 and post Jan 1, 1999 North Carolina HOAs. Many sites say that 47F-2-117 says only 67% is required.


More discussion:
N.C. Gen. Stat. § 47F-2-217(a), which, with the exception addressed below, is now applicable to all planned communities, provides that "the declaration may be amended only by affirmative vote or written agreement signed by lot owners of lots to which at least sixty-seven percent (67%) of the votes in the association are allocated, or any larger majority the declaration specifies." The association's declaration may require a higher level of member approval, but the minimum level of member approval in a residential community is 67%.

There is a catch. While N.C. Gen. Stat. § 47F-2-217 now applies to pre-1999 communities, it does not if "the articles of incorporation or the declaration expressly provides to the contrary." Unfortunately, the meaning of this phrase has created potential problems for pre-1999 communities. For example, if a pre-1999 community's declaration contains a clear and unambiguous provision providing that a mere majority of all members can amend the declaration, the provision in the declaration should control over N.C. Gen. Stat. § 47F-2-217(a). If, however, the declaration contains ambiguous language regarding amendments, such as "all actions taken by Members shall be by majority vote," it is unclear whether this is a sufficiently "express provision" to override the 67% approval floor set out in N.C. Gen. Stat. § 47F-2-217(a).

The amendment applying N.C. Gen. Stat. § 47F-2-217 to pre-1999 communities is new and has not yet been interpreted by a North Carolina appellate court. Until that time, planned communities without clear amendment provisions in their declarations should consider taking the conservative approach and complying with the Act.

More at https://www.wardandsmith.com/blog/some-but-not-all-how-the-north-carolina-planned-community-act-affects-pre-1999-planned-communities

Skim it. Go see an attorney.
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