How to disband an hoa

Sharon, it depends on what your Declaration says and if you have common area properties. Why are you considering it? You really need to read your Declaration, understand how difficult it will be, and realize how expensive it can be to every owner.

Well Brian - Just quit paying the real estate taxes on your common area. That land has no value to anyone because it is probably deeded for storm retention.
This is where the cities get us by the short hairs. They demand that the developer install storm retention - which is usually the only common area for many HOAs, then demand he form an HOA to tax us to maintain it, all the while collecting taxes themselves from the same homeowners. Let the city take over the retention basin they required.

That's unusual. We are a non profit also, but the association pays RE taxes directly. We almost lost our common area becasue a fired MC never forwarded the tax bills to us or the new MC. So I talk from experience. If each of your owners pays a pro-rated RE tax on your common area - do they have a pro-rated ownership of the common area? I don't think I would like that situation. I'm at a loss to understand how a county can pro rate a tax to someone who doesn't own the property. Is this recorded in the deed? Harold

In the case of my own HOA, we are required to exist. The fundamental legal responsibility of our HOA is the maintenance of the common areas. This is an agreement that the developer made with the city in that the city does not have to pay to maintain the drainage pond, mow the weeds, stain the fence that keeps the kids off of the RR tracks, etc. The HOA is required to take care of all of this in addition to the CCRs.

Contrast this with our neighbors to the North. They had a similar agreement with the city and an HOA. As time passed, no one wanted to serve on the HOA and many residents hated the HOA because their focus was on whining about garage doors being open, etc. - classic "bad HOA" stuff. Eventually the HOA folded. The city's response was to hire a property manager on behalf of the defunct HOA and that property manager now takes care of their drainage pond, weed mowing, etc. The cost of the property manager is paid by a special property tax assessment against the homeowners. This seems to work for them ... the assessment is less than the HOA was charging and they maintain compliance with the city by having a professional property manager. With this, the HOA isn't technically disbanded, they just exist enough to meet their legal obligations.

Brian, have you read your Declaration? Such requirements are usually recorded in it.

The transfer of property from the developer to the association and related items should be recorded in the county deed book. Check the internet to see if your county has it posted.

Last spring during an 'uprising', someone in the neighborhood questioned that fact that the HOA owned small parcels of property in the neighborhood (dentention ponds, etc.). I checked our county's website and searched the developer, builder, association and individual homowners for the trail of property turn over and related items.

I found the property manager scenario to be very informing. It is something we could possibly suggest to our city officials when trying to work out the details of disbanding and returning the property.

Disbanding generally requires the following:
1) Approval of 2/3 members (or whatever the magic number is for your association)
2) Doing all the paperwork or hiring an attorney to help file (we had been quoted around $3000).

Considering most HOAs have a maintenance fund, the "cost" to disband is minimal and most likely absorbed by it, until you deal with the city who seems to like to threaten to charge us 10 times the cost of lawn maintenance, etc if we fail to keep the area maintained.

Again, I agree, if it is not listed on my property as belonging to me, why should I have to pay for it. I imagine a lawyer may be able to help homeowners squeeze through that crack. But with the property manager option, that may not be necessary.

our cc&r's say nothing. Common areas are center islands ging up the main street...sand, plam trees and oleanders: self maintaining. The city took over the street care 20 some years ago.

this sounds like ours...we have only islands that are "maintained by usuless gardeners...for top dollar ...there is only sand, oleanders and plam trees all of which take care of themselves.
Most residents hate the HOA...they do not follow the rules: sue only people they don't like enforce the rules aginst those they don't like etc etc. We have no pools, parks etc...just sand and desert landscape.

Roger,
Since 1955, I have lived in 13 single family residences in 6 states. I’ve owned 6 of the 13 properties and owned 3 rentals in addition. Right now, I live in my first property in an HOA. I can’t recall any time in the past fifty years having a need or desire a “good HOA” would have satisfied. I bought my present property for the property itself, not for the HOA. What a mistake!
I think as HOA’s go, we have a pretty good one. But I would be willing to step up and contribute as much as ten years of assessments to be rid of it.
In my not so humble opinion, anyone who has a chance to get rid of an HOA should “go for it”. Many of us are not that fortunate.

Roger,
I have not had the "HOA-from-hell" experience. Not at all.
As I said, I simply have yet to experience anything that justifies the arbitrary imposition of an unnecessary layer of private, poorly regulated, and marginally-competent government upon owners of individual residential properties. (Condo’s are something else.) Competent zoning has always been more than adequate. Of course, I have always supported diversity over conformity.
I absolutely support the right of a group of fully informed owners to agree to almost any level of arbitrary restrictions. But that is not what happens. Restrictions are IMPOSED by the developer, not agreed to (explicitly) by the buyer.
I am convinced that in apathetic HOA’s the majority of owners were never fully informed and if they were, they would have never agreed to the CCR’s imposed by the developer. As a consequence they are in an adversary relationship with the CCR’s and anyone trying to enforce them. If the overwhelming majority were in favor, “enforcement” would not be the watch-word, “compliance” would be. It seems to me the enforcers are always a minority who depend upon the power of “the covenants” rather than the consent of the governed.
I should never have spoken up on this one. I’m in the process of trying to prepare for an annual meeting that is in total compliance with SB-100 or -089 (which ever is in effect just over a week from now). I’d better stay away for a while.

according to the ex president and her girlfriend: the ex vice president: to use a property management company would cost each of us $300 a year. Current dues were doubled from $50 to $100....having attended these meetimgs and seen their purorted expenses...it is clear they double the dues to cover erroneous ecpenses: $1000 for office meetings(meetings are held at residents home and they provide beverages etc)...christmas decorations $200-$700 although they reuse the same ones....before this was done on a voluntary basis...
Why do you say it is exepensive to disband?

Every HOA is unique in its own way. It will only be successful if ALL
the members become involved in its operation and management. I mean
serving on the Board, working on committees and obeying the rules and
regulations of the Association and working together to maintain the value of your home or property..

I am going to quote or say what a judge said to a deliquent association
member in court one day. It is up to you to know what you are buying
into before you sign on the dotted line.

A HOA or POA is only as good as the people running it and its members.

DorothyH

Sharon,

1) How many homeowners/members are in your HOA?
2) How many board member positions in total?
3) Do certain members tend to be on the nominating committee?

I would suggest speaking to homeowners individually to get a feel for their opinion, if any on the quality of the HOA and it's board members.

If people are willing to express that to you, let them know you are plan to run for the next board and would like to address their concerns. Find other homeowners that may be sound-minded & competent enough to be on the board and urge them to consider running.

If you see the same people on the nominating committee and think they may be biased, try to appoint different homeowners.

If you have 4 or less board members, I could understand why the two board members seem to dominate decisions. However if you have 5, you may be able to convince the other 3 to vote along with your decision. Just make a strong case and keep them focused on what is best for the HOA & homeowners. Unless they are biased or puppets of the other 2, you should be able to sway them.

Keep in mind, homeowners just vote for who will be on the board. The members of the board then decide who will be in certain positions. Technically, all board members should carry the same weight, while functionally, they perform specific jobs that may entitle them to additional powers.

If you aren't willing to deal with any of this, then moving out or proposing the HOA be dissolved to the rest of the members may be your only recourse.

There are 233 homeowners.
5 board members plus these two women who quit but still run the board.
The board members are to select the positions for president etc...PROBLEM: These members have been listening to the two women who dominated the board stating it is a cumbersome and very difficult job etc etc. They are scared to take on the jobs. Our HOA members are apathetic because "it's only $100 a year...." But fact is this board has doubled costs to cover who knows what and again no one looks into it as "its only....."
Your comment: However if you have 5, you may be able to convince the other 3 to vote along with your decision. Just make a strong case and keep them focused on what is best for the HOA & homeowners. Unless they are biased or puppets of the other 2, you should be able to sway them.
They are puppets and scared....
I have lived here for 20 years...this is a residential area not condos...we have no amentities. I have tried to disband the board for years as we have no amenities and the city took over the streets. This HOA consiists of a bunch of retired career women who have no life so they have expanded the dutieis of this HOA to make themselves important. And as we have apathetic homeowners they allowed this to happen.

The two are running it because they have convinced the board of directors that due to all the upcoming changes ONLY THEY can run the boad. No onein the HOA ia aware they quit....The board members don't want the jobs but don't quite either.
Recently we had a special meeting where we were to discuss who was going to volenteer for treasurer...I said I would do it. At the meeting however, one of the board members brought in his neighbor, whom the board then voted he become a direcotr at large and then voted him for treasurer......We have maybe 40 members who feel the board is worth salvaging.....This board talks about community etc etc but it is a wasted group of people who get togther for free booze and snacks...seriously!

1 233
2 7
3 yes the two women who ran it (as a couple for 8 years) then quit but are still running it
Most everyone I spoke to says the same: get rid of the baord.....but no one is willing to do anything

An HOA can also be disbanded by the Secretary of State of your particular state. You can go online to your Secretary of State's website and read through the rules for Associations or Nonprofits or however they are listed. In WA State the particular rules are titled the RCWs and then the section covering Associations falls under the number 24.
I ran a search and found the exact RCW covering the 'disbanding' of an HOA in WA: RCW 24.03.302 Administrative dissolution-Grounds-Notice-Reinstatement-Fee set by rule-Corporate name-Survival of actions.
There are stipulations for an administrative dissolution by the Secretary of State and it may not apply to your situation but it is a place to look.

Sharon:

Sounds like you have three options:

1) move

2) disassociate yourself from the HOA and save yourself the grief.

3) Get together with your neighbors and get determined to make a difference. I am puzzled how two women who are not on the board can rule the HOA? Get together with the other board members and convince them to follow your lead. I would think if you want to be president you should be.

I would also check into the $100 for a meeting and $200-$700 for christmas decorations. Sounds like someone is doing something that isn't up to par. We spent nothing on meetings, it is a meeting not a social gathering.

Best of luck to you, but if you are strong and persistent and can get some people behind you, you can succeed.

As stated by BrianB:

"the instructions provide by the Secretary of State apply to the dissolution of an HOA... However... the common areas must still be dealt with, and the Sec of State has no provisions for that... many common areas are not saleable... the city has blocked that option in perpetuity."

Yes, this is the primary reason we have not yet dissolved our HOA, however...
I heave heard there may still be an option that does NOT require the sale of the property.

In a nutshell, you establish a credible management company to handle all basic issues with this property and offer that to the city. The money to pay that company still comes from the homeowners, but generally is still less, since they would not have all the overhead related to HOA-specific functions.

I have heard others have successully used this method to then go ahead and dissolve the HOA entity, but would like more details of what to be careful of when doing something like this. My first thoughts are, exactly how is the mgmt company paid? Would it still be direct payments from homeowners? Or handled by the City via taxes on those homeowners for the equivalent amount?? Also: What if the mgmt company decides to inflate the cost without just cause (actual expenses haven't changed to match new amount taxed/charged)?

I am curious if anyone here has done this before and what kind of issues were dealt with in the process (during and after). Any feedback is appreciated.

Thanks,
Kevin

Kevin, as you said "the common areas must still be dealt with". That is the key question which must be resolved prior to dissolution of an association. The Secretary of State only gets involved when the association incorporates or terminates the corporation. Yes, a HOA can dissolve the corporation (if ever incorporated). But that does not dissolve the HOA nor the homeowners' responsibilities under the Declaration of CC&Rs. So until such time as the homeowners have no responsibility for common areas I think the HOA must remain intact.

Kevin, IMO the good of an HOA comes from better maintenance of properties AT LESS COST than the senerio you mentioned. Some HOA can dissolve but many can not because their CC&Rs are for pertetuity. What may be required is court action to place the association in receivership. The judge assigns a receiver and your assessments significantly increase. And what do you think will happen to the selling price

I am confused why you say maintenance at LESS COST than the scneario I discussed. How so?

The basic deed restrictions on homes will remain, but they generally do not prevent an association from disbanding.

I'm not sure why you say the assessments will significantly increase and the that the association may have to be placed in receivership.

The management of the HOA brings with it more overhead than the focus on JUST the management of the common areas.

The concept of an HOA is relatively new and does not exist everywhere. Many neighborhoods thrive without one. It boils down to the homeowners in that neighborhood and how much they care about the neighborhood. As stated, the deed restrictions remain intact and can be enforced by any homeowner(s) if they choose.

My aggravation with HOAs is more about the social mess they often create. I see little point to any association where the well being of the neighborhood is lost among all the politics and backstabbing of a few homeowners. In many aspects, they pull apart a community more than bring them together.

The average homeowner didn't create that fire, yet are held financially responsible for taming it. One possible method may be to remove the social mess and leave a mgmt company in place to focus on the management of the common areas (lawncare and utility bills essentially). Granted, ideally this should cost less. Reality may take a different spin on it however.

Ultimately, there is no easy answer, but there are options. Dissolution is one of them. It comes with good and bad, but may be the best answer for some neighborhoods. Yes, there is also the choice to change the HOA for the better. For some that can be an uphill battle. For others, it may be a challenege worth taking on. I'm in the latter stage at the moment. Dissolution is currently on standby.

Thanks. I'm just trying to make sense of it all.

I think you may be hitting a good point. Perhaps we need to push for new legislation that protects homeowners in existing CAM-based communities and places a greater restriction on developers when designing new communities.

For example:
What if they were to PREVENT developers from incorporating common areas in their design that have little to no resale value of their own?

Any property established as a common area, should be adequate enough to be usable for other development, such as a park (city property) or even other homes (private property), etc. If the city looks at the common areas and says, hell no, we wouldn't even be able to do anything with that property, then they shouldn't authorize the zoning plans and property lines. They should be able to tell whether a piece of property will be of any value or use to someone, other than the proprietary plans of the developer. At least give the future home owners a chance to decide whether they want to keep the common areas or not. If the property has little to no resale value, then the homeowners have hardly any choice but to keep it. That seems unfair.

In our HOA, we have these 9 little taxable strips of land, that we cannot resell or bargain with the city on. We have no leverage whatsoever. Why did the developer lay it out this way? They could just have easily included parts of those strips in the property lines of adjacent neighbors from the start. The approval must have happened at the city level when the developer proposed his design plans. So in a way, the CITY allowed this happen and now we as homeowners must pay for the maintenance, property tax, utilities, and management of that property (of which my house is not adjacent to).

In addition, our developer had gone bankrupt just after the first phase of development (our phase). Phases 2 and 3 were supposed to be part of the HOA, but due to the bankruptcy, were never added. So instead of 200-300 homeowners helping to cover this expense, it is only 100 homes.

I realize why the city won't take it. Basically we are introducing a new cost that the city must somehow absorb. Responsibility for that property was long-removed from the city's budget over 20+ years ago and they're not just going to tack it back willingly. Fine. But in our case, no one would buy those small strips of property.

Perhaps we should advertise them on eBay and see what happens. Knowing our luck, we have all sorts of advertisement signs strewn up and down those strips of property because the people that bought it hoped to get low cost advertising space for it.

;-)

WAY TO GO GREG,

Working from the inside is the only successful way to get your community back from the non doing, non caring, self indulgent turds that have had a grip on it. It might be like starting from scratch but if you plan on being there and you love your home, then it is up to you and your good neighbors to take back the community.

I have such issues with those who have the idea that at the stroke of a pen and if we just say so, we can dissolve our HOA. NA AH, it isn't that easy because every HOA has at least some type of common area or property. Someone has to own it and to just say that you are walking away doesn't work.

Sharon!!, it is also your choice. Do something to fix the problems or sell and leave with a lesson learned.

HOATALK!!! Thanks for the language reminder to the O.P. It's that attitude that is counterproductive and may be part of her problem.