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Subject: HOA's incorporation
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Author Messages
CherylM3
(Indiana)

Posts:6


08/28/2006 1:51 PM  
Can someone answer me the question of what differences there are for a HOA to be incorporated and why the BOD would incorporate without asking the homeowner's to vote whether we want to or not??
RogerB
(Colorado)

Posts:5067


08/28/2006 2:13 PM  
Cheryl, why would you not want to be incorporated? I strongly recommend incorporating as a non-profit organization which gives protection to the Board and to the members. If I was on a Board I would demand it be incorporated or I would not serve.
CherylM3
(Indiana)

Posts:6


08/28/2006 2:28 PM  
What protection does it give, that's my question. Also they are telling us that we have no rights to vote on nor can we change any covenants or restrictions. Is this right? Is this because of the incorporation? I am new to this and just trying to understand it all. Thanks
RogerB
(Colorado)

Posts:5067


08/28/2006 3:38 PM  
Cheryl, incorporation as a non-profit gives you a tax break. Incorporation provides a "rotective shield" against suits against Board members. The non profit corporation act requires sets forth organizational requirements including members right to vote. You always have the right to amend the covenants, restrictions, By-laws, and articles of incorporation - incorporating has no bearing on any of these things. Perhaps reading you controlling documents will provide some insights.

CherylM3
(Indiana)

Posts:6


08/28/2006 4:19 PM  
OK, I don't want to get too far into this, but here is the situation. Our driveway is a very steep grade, my husband has a older model Dodge full size vehicle. The HOA BOD are trying to enforce him to park in the driveway and we are scared for safety of children on bikes, if the vehicle pops out of gear and rolls into the street. They say if this happens and we are sued, we have to fight it on our own. But we have gotten 33 of 45 (there are only 45 houses in our neighborhood) signatures saying they don't care if we park in the street. The president says this makes no difference and they will continue to enforce the covenants and impose fines if we don't comply. An atty I talked to last week said that if an accident were to happen and we came to him being sued for the accident, he would in turn sue the HOA. What rights do we have in this matter and where should our concerns lie?
RogerB
(Colorado)

Posts:5067


08/28/2006 4:48 PM  
Cheryl, this is an entirely different subject than your first question. You have two choices:
1) park in the driveway and block the wheels
2) amend the Covenants which can be difficult and takes time

Forget about lawyers and law suits. If you can not park in the garage then make sure the vehilce will not roll into the street and make sure your insurance would cover damages if it does.
GeraldT1


Posts:0


08/28/2006 4:54 PM  
CherylM3,

Not sure exactly what your situation has to do with incorporation vs. non-incorporation. However, if the BOD is not incorporated than a letter from your attorney threating a counter-suit explaining the differences of incorporation and non-incorporation may get your BOD incorporated sooner than you can blink.

Your driveway's grade presents a permanent safety concern not easily remedied. Can you park the car, and or any of your cars in your garage rather than on the driveway? This may alleviate the immediate safety concern.

If 33 out of 45 owners say they don't care if your park in the street, your President is foolishly mistaken, it makes all the difference in the world. This sentiment needs to be formalized into a petition and provided to the board as a request to amend the cc&r's so as to re-consider their current parking rules to take into account your steep driveway with a requested amicable outcome, all with a cover letter from your attorney.

Is the road privately maintained by the association, will you be violating any borough ordinances by parking in the street?

Best of luck,
GeraldT1
NNJ

CherylM3
(Indiana)

Posts:6


08/28/2006 6:55 PM  
Well, the questions we all had was does incorporating have anything to do with the fact that we have no rights to change any of the covenants? If so, this was done by the BOD w/o any voting from the homeowners and now the BOD is trying to enforce the covenants that they say we don't have any right to change.

As far as parking in the driveway, we have 2 vehicles and one is kept in the garage. Our next door neighbor had his car in his driveway and had a brick under the tire. He woke one morning to a flat tire and the vehicle across the road. We are just trying to prevent a major catastophe and the BOD won't budge.
GeraldT1


Posts:0


08/28/2006 7:14 PM  
CherylM3,

I see, thanks for the clarification. I'll quote what RogerB wrote, "You always have the right to amend the covenants, restrictions, By-laws, and articles of incorporation - incorporating has no bearing on any of these things.".

Keep the other vehicle in the garage as well, and amend your by-laws, you have the numbers, do it. As for getting everything on attorney letterhead, it has nothing to do with suing, it is credibility. You are getting the run around, fight fire with fire. It's in no one's best interests to sue but your board, in my opinion is being negligent.

Best of success!!
GeraldT1
NNJ
CherylM3
(Indiana)

Posts:6


08/28/2006 7:19 PM  
Thank you, that's the way we feel as well. Thank you all for your time and intrest, you gave us more clarification.
RogerB
(Colorado)

Posts:5067


08/28/2006 8:06 PM  
Gerald, I disagree with your comment that the Board is being negligent. The Board should enforce the Covenants. If the owners don't like a Covenant restriction they can amend it; until such time the Board would be negligent and could be subject to a suit if they fail to do they duty.
Also, amending the By-laws would not override the restriction in the Covenants.
WilliamT
(Arizona)

Posts:489


08/28/2006 8:50 PM  
I don't think Cheryl has stated what the CC&R's or Rules say about parking.

I agree that the BOD must enforce the covenents and Rules. If the covenents say that cars cannot be parked on the street, then you must abide by that.

If I were to park on the hill and it presents a safety hazard, I would chock both rear tires with proper wedge type chocks to eliminate the possibility of the car rolling backwards.
GeraldT1


Posts:0


08/29/2006 4:15 AM  
Roger, I could not disagree more.

Perhaps negligent was a strong word, however I don't think so. How about, I think the president is being an idiot and derelict?

He has heard the feelings from 33 out of 45 of the community residents regarding a safety issue in favor of parking in the street, another car has indeed rolled accross the street. It's clearly become a contest of wills. While he has an obligation to enforce the covenants, it must be for the benefit the majority's best interest, correct? If you see something that is wrong, are you going to allow it to remain that way? This is an instance where the Board must intercede.

Rather than advise the community on the necessary steps to amend the covenants he's stated basically that the feelings in favor of the street parking, "...make no difference and they will continue to enforce the covenants and impose fines", if they don't comply.

He's forcing the owners to comply with a covenant that poses a safety issue. Is that not negligent?

How can you say enforcing the covenants is in the best interests of the eligable mortgage holders? This is not a matter of enforcing for their benefit, this is about power and stupidity, plain and simple.

GeraldT1
NNJ
RogerB
(Colorado)

Posts:5067


08/29/2006 7:58 AM  
Gerald, the reason I disagree with your comments is because the Board has no authority to override or ignore the Covenants. That's why I said the owner has two choices- either amend the Declaration or make sure the vehicle will not roll down the driveway.

Certainly the Board could initiate an effort to amend the Covenants. The owner could also have done so rather than conducting a survey which ends having no authority. It takes time and effort to try get the approval to amend and it may be improbable to get this passed. Until this Covenant restriction is changed the President is correct; the Board should continue to enforce the Covenants.

The safety issue is certainly of concern and the homeowner is responsible (and possibly the Board) to take the necessary steps to eliminate the potential safety hazard.
GeraldT1


Posts:0


08/29/2006 10:06 AM  
Roger,

So let me get this straight. In this situation, your advise to the HOA would be.....to fine, and keep fining? Or something else. If something else, why?

No one is holding the board's feet to the fire on imposing a fine for this situation. Based upon my set of principles, the President is incorrect in enforcing and fining for the parking covenant in relation to all steep driveways. As well, the owners would be negligent in not cleaning out their garages to immediately alleviate the safety concern and comply with an inflexible and unrealistic covenant.

This is a safety, and covenant issue that has been brought to the attention of the board. An attorney will have a field day with this if something happens. How can that step be in anyone's best interests.

While the president may revel in his/her black and white fixed action, while some sense of duty to fine may be protected by powers and duties, at the end of the day it shows stupidity of gross proportion.

Because if a survey evidences 73% (33 out of 45) of the owners feels a certain way about a covenant, a responsibile board should hold their ability to fine in abeyance, until such time as the owners can resolve the safety issue. It is indecent, and in my opinion negligent to do otherwise.

A covenant is not going to be changed just because one person says it should. You of all people Roger know this. The survey is exactly where the owner should have begun. It has all the authority in their HOA world because it is enough to convince the board they have to rethink what's goin on and the impact of not being reasonable.

GeraldT1
NNJ
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