This is one for the experts or the curious

Started by TishS • 29 replies • 1953 views

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TishS (Washington)
Posts: 116

Posted:

Our year long court battle is over..or so I thought.

Judgement ruled that the definition of member in our bylaws was valid, so now the CCR's are not correct and we have 70 homes that need to get CCR's on their properties.

Problem. The HOA is refusing to take any action at all. They argued the bylaws were correct, but they knew that at least 30 properties had no idea they were being added to our HOA. They did however file the bylaws with the county assuming that when properties changed hands..no one would notice they had bylaws that dont have a corporation to go with them.

Many homeowners do not really understand the bylaws say it is a mandatory association and the board is telling everyone it is voluntary The board is planning on submitting something at closing to collect any unpaid assessments or dues (the ones no one knew they owed)

Do the banks send a document of some type to verify your dues are paid at closing?

No I dont endorse any of this mess..I am just living the dream.

TishS (Washington)
Posts: 116

Posted:

Mary..the judgement was so confusing that we had to go back in to court and have the judge clarify. The HOA is mandatory, the corporation has successor interest (so everything is the same as the original it was only a clerical correction), but the members could vote in all these properties. None of us really got what we wanted and it still obviously did not force anyone to follow any document, just create more to make it worse

RichardP13 (California)
Posts: 1,767

Posted:

Tish

I think you are confusing CCRs with Bylaws. The Bylaws are documents that give the HOA direction. It will tell you how elections are conducted, which officers your association will have and how they are chosen. It outlines the duties and powers of the BOD and most importantly the voting right of the owners.

The CCRs will tell the members whether or not the HOA is mandatory or not. It's also the document by which the Rules and Regulations come from.

RogerB (Colorado)
Posts: 5,067

Posted:

Tish, your post is confusing. It appears you may not understand the differences between CC&Rs, kBylaws, and Incorporation.
1) The CC&Rs define whether or not an association has maditory assessments of the owners. Only those owners defined in the CC&Rs are required to pay assessments and are members of the association. The association may not arbitrarily add members who's property is not defined in the CC&Rs but there can be voluntary members if defined as part of an association which allows both manditory assessments and voluntary dues.

2) The Bylaws define the organizational operations of the association and its' members. It is subordinate to the CC&Rs which means if the Bylaws conflict with the CC&Rs that the CC&Rs rule.

3) A corporation is not required for either a voluntary or a manditory association. But in both cases it is prudent to incorporate.

TishS (Washington)
Posts: 116

Posted:

Unfortunately...this is exactly why we went back to court. The judge ruled the definition of membership in the bylaws is valid. Which is in direct conflict the CC&R's.

So the HOA said the original group needs to start a new HOA and give them the common property, because they have none. The original group says you can start your own HOA and pay us to use our beach, but you cant vote on our HOA issues or control the board.

The non CCR group has control of the board and have the majority...so we are stuck. The controlling group has locked the original group out of the park..the one that is dedicated to CCR group through the plat of the subdivision.

It is hard to believe how screwed up things have gotten

TishS (Washington)
Posts: 116

Posted:

TishS (Washington)
Posts: 116

Posted:

TishS (Washington)
Posts: 116

Posted:

One more item. The county has notified us that there is nothing we can do about the beach title..because it woudd involve vacating the plat and there is a whole growth management issue in this area. So the locked out group still has to pay the property taxes in with our individual property taxes.

Crzzy huh? The judges ruling was based on the statute of limitations only...so do what ever crazy think you want just dont let anyone know it has been done until the statute of limitations is up. I guess you are suppose to do a title search on your property and every other one within a hundred miles every year.

DonaldN (Connecticut)
Posts: 183

Posted:

could someone spell out what CCR stands for - thanks

TishS (Washington)
Posts: 116

Posted:

Covenants, Conditions, and Restrictions

So we have one restricted group and one who only has the benefit of the restricted groups common property. The benefit group also gets to impose whatever restrictions on the CC&R group...it is a mess

Usually, either everyone has the same or similiar restrictions and enforcement in a community. We are more of a dictatorship than a democracy.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Tish:

And I thought I was dealing with a mess. WOW … I wish you the best of luck!!!

I'm not quite following everything here … as Roger stated above it is a little confusing. Can you clarify some questions:

1. You state there are 70 homes with no CCR’s on their deed … I’m not an attorney, but my question would be can these be attached after the fact if it was not done when individuals purchased?

2. Do the 30 properties you reference who have no idea of being added to HOA … show the CCR’s as part of their warranty deeds?

3. Did the judge rule regarding the CCR’s vs. By-Laws? As Roger stated the CCR’s should supersede if the By-Laws conflict. Was this just a court case regarding the By-Laws or did the Court consider all the documents?

4. What was the statute of limitations pertaining to?

I would think that the group who has the CCR’s on their deeds would have control of the HOA and the ownership of the common property bound by said CCR’s. So, I’m not sure what you reference when you talk about the beach title or vacating the plat.

In answer to your question:
Usually many closing documents will state that the dues are current or that they will be made current as part of the closing costs. However, possibly in some states there may be issues pertaining to due diligence in verifying certain information yourself. You might make a quick telephone call to a local realtor or title company to get their response to your question.

Because we happened to check the county records regarding our HOA documents, it ended up being one of the reasons we have options. It is something I would recommend everyone do every 6 months at least, because many statutes of limitations are one year. If we had not found out about the Amendment the Developer filed without our knowledge, after one year we would have been stuck with no recourse.

TishS (Washington)
Posts: 116

Posted:

Janet, you are not alone in not being able to follow this trainwreck. So I will try and break it down. So many things came out since the beginning and facts and arguements changed, we are in a very different place than when it began.

In 1971 a plat was platted with a private beach. The beach was deeded to the community and became a tax exempt piece of property. CCR's were recorded on the plat and within its dedication it named XYZ HOA.
In 1971 XYZ HOA inc was formed and CCR's were recorded on all the parcels within the plat.

Unknown to anyone except the president of the HOA in 1980 the corporate status was allowed to lapse.

In 1986 a new corporation was formed by the same name. The officers were the same, the bank accounts were the same, the bylaws were the same, everything except for the articles of incorporation. When anyone would asked for the articles they would receive the 1971 articles of incorporation (even though they were not correct)

Everyone was fat and happy.

In 2004 a meeting was held and bylaws were created adding 70 homes to the HOA this document was filed with the county. No one in the original group except for the president knew this had happened.

In 2009 one of the original group was given a copy of the 2004 bylaws and questioned how can this be? We have two completely different membership definitions. The original group is now outnumbered and do not have the voting power to change anything.

Well...what the judge decided was the original corporation was dissolved. The new corporation took over the common property and CCR responsibility by adverse possession. The new group does not have CCR's and cannot be forced to be a member, the old group has CCR's and must be members...I am not kidding you this is what actually happened

This is basically a weekend beach community..the original group are old, except for me so they still have no idea this has happened. I guess when they try and sell their properties with deeded beach access that is when they will find out.

Oh by the way the original corporation was a HOA..the new one is a voluntary community club that enforces CCR's. Figure that one out???

Oh your title question..they take no responsibility for HOA junk...it is specifically excluded from title insurance. My title to this day still would make you think I was part of a 30 property mandatory HOA

TishS (Washington)
Posts: 116

Posted:

The vacating the plat issue. Only the properties in the original group are taxed for the benefit of the beach. The only was to get this removed is to vacate the plat, which the county will not do because the subdivision is required to have so much open space common area by county code...so there ya go!

So as far as a learning experience goes this has been a doozy. In the future before buying a piece of property I will spend a week in the county recorders office and with the state to research the property back to the days of adam and eve.

DJ1 (Ontario)
Posts: 798

Posted:

JanetB2,

In our experience, only the owner of the property can agree to have CCR's registered on their property. Previous owners of the same property cannot. In our screwed up sub-division the developer sold properties in 1999-2001, but didn't register CCR's until 2002 and by then he could not register them against our titles as we were among the ones sold in 1999-2001 properties.

TishS (Washington)
Posts: 116

Posted:

By the way...we just got further clarification and that is when the whole second group being strictly voluntary was clarified yesterday and the non HOA status of the group. I had a new lawyer look at this mess..he said after looking at everything I have no idea what this is or who belongs to it? This is after the ruling.

JanetB2 (Colorado)
Posts: 4,219

Posted:

You are in a mess ... let's see if we can come up with some options or ideas for you to pursue.

The first thing that royally sticks out for me is:

Quote:

In 2004 a meeting was held and bylaws were created adding 70 homes to the HOA this document was filed with the county. No one in the original group except for the president knew this had happened.

1. How could this happen if no one attended the meeting except the president from the original HOA, as there should have been vote requirements in the original documents to add properties?

2. Does the new CCR's now show all 100 properties or just the new 70 properties added?

Here is a link for the statutes: http://www.associationtimes.com/stateInformation.htm

Titles 63 and 64 are for Washington HOA's, but we also should review other titles pertaining to the corporations and regarding vacating property.

Maybe we can find some ideas for you to ask the new lawyer.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Something else I would do if you have not already, as it greatly helped me is to make a copy of all your documents. Then put them in a 3-ring binder with tabs (i.e., original corp, new corp, by-laws, old CCR's, etc.). I even in the last tab have a copy of the state statutes in mine.

Then using different colored highlighters and going through your scenario, highlight in the different sections the procedures that should have been followed. Make notes in the margin if needed to reference the different sections or other information. Do this for the statutes also ...

Be sure to check the definitions on some of the items. For example in CO the statutes refer to "units" and many individuals would assume this means homes. However, in a single family subdivision this actually refers to the lots as they are what has the boundaries.

You may be surprised at what will pop out as possible avenues to pursue.

RogerB (Colorado)
Posts: 5,067

Posted:

Tish, I find your posts to be so confusing and convoluted that it is difficult to understand what you are trying to achieve. Can you clearly indentify the basic problem for which you are trying to get clarification? Who took whom to court? What was the purpose of the suit? Who won? What are you trying to achieve?

If you provide thorough and unbiased information on the ultimate objective you are attempting to achieve perhaps those willing to respond can provide some useful information.

TishS (Washington)
Posts: 116

Posted:

Roger, My only questions from the very beginning of my court case was "Is this a homeowners association? If so is it mandatory?" I thought this was a question that needed an answer. My divison has CC&R's Bylaws, and Articles of Incorporation. I discovered 2 divisions without anything no deed restrictions of any kind. One division with a set of bylaws on their deeds that are written more like a covenant, not the same bylaws as mine, but naming the same corporation or so I thought. The association meetings were a nightmare..no one followed anything because everyone had a different belief. They group that only had bylaws believed they had deeded beach interest. The group that has nothing thought it was a voluntary HOA, my division was completely confused. The BOD said you are all wrong. This is not a HOA at all but a voluntary community club..no different than the YMCA anyone can join for one year at a time, except the original division you have to pay.

What was discovered is The original HOA (mine) administratively dissolved. A new corporation was formed with exact same name. The bylaw only group was just something a developer did, he thought it would be nice if people had beach access.
The group that had nothing were told back in 1971 they were eligible for membership..so that meant to them they could participate at any time.

The final ruling after heading back to court and people argueing every's angle possible. Was the entire group belongs to a voluntary group. The corporation is not the original corporation but gained successor interest over the original CCR's and property (the original group was mandatory) The lien rights and CC&R's stay in place..however if they try and lien a property any property they will have opened the door for additional legal action (I cant remember the exact term the judge used) The new corporation does enforce the CCR's on the original group.

My only goal at this point is to sell and get out, but how do you disclose this? I have been trying to get my deed to at least come close to reflecting what is happening..not that anyone in their right mind would sign up for this program. The HOA has already stated if you dont pay we will lien you at closing...so you finally get a buyer and you have to try and explain this mess and clear it up before you lose your buyer or try and close your property without the BOD find out that it was even for sale.

Oh I am not opposed to paying dues I am opposed to our assessments last year we had a very large assessment it happened in 4 installments because people decided they were not volunteering to pay..so my division had to pick up the slack..membership went from 97 to 32 after the assessment. Good news is this year (no assessment) back up to 82.

You have to understand this is a weekender community that the original owners are passing away, so most of us are newer buyers and some are from a brand new developement, the old people have stated they just want to die in piece.

TishS (Washington)
Posts: 116

Posted:

I dont know if I clarified..no ones paperwork changed. The name says Homeowners Assocition, but I cant get anyone willing to say that is what this thing is anymore. My division is the only one that is property tax effected by the HOA.

Most people in my division are either selling or just waiting for death to get out. The judge was clear on this one issue..this was all caused by the administrative dissolving of the corporation and no one noticing except a very cleaver individual that owned many acres of land locked property (280 acres) Development has only just began.

TishS (Washington)
Posts: 116

Posted:

RogerB (Colorado)
Posts: 5,067

Posted:

Tish, you stated "My only goal at this point is to sell and get out". Since you said after the trial you sought an opinion from a different attorney, I presume you brought the suit and lost. I would suggest the facts were presented in court and the judge was in a much better position to decide than any help that can be provided on this board. You did not state the purpose of the suit. You mentioned some water front property so possibly the value of that property motivated you sue. Am I right so far? What is the value of your property? Is it worth the legal costs incurred? I suggest you either accept the court's decision or sell your property and move on.

TishS (Washington)
Posts: 116

Posted:

That is how I came to own this property it turns out..people discovered the problems and as opposed to doing anything about it just passed it on to the next person. I would like to be honest with the next buyer. I know it is a crazy concept.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By TishS on 10/13/2010 10:15 PM
That is how I came to own this property it turns out..people discovered the problems and as opposed to doing anything about it just passed it on to the next person. I would like to be honest with the next buyer. I know it is a crazy concept.

Tish ... I so commend you for this attitude!!!

We have had realtors tell us in our situation that there is due diligence for the next buyer, but we also do not want to place a burden on the next property owner.

I noticed in one of the posts where you are considering contacting other homeowners who may end up in a similar situation to let them know the consequences and hopefully avert this issue for others. KUDOS to you!!!

I and other neighbors are working on getting a local ordinance passed to help protect property owners in our city from a similar situation as ours in the future. The city is dragging its feet at this time, but at the next meeting I will remind them:

“The registered voters of the City shall have the power to propose ordinances to the Council. If the Council fails to adopt such an ordinance without any change in substance, the voters may adopt or reject it at an election.”

It is one thing to mess with me personally … when you mess with my family, friends, neighbors, or community at large I have a BIG PROBLEM with that.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

You seem to want to divert the questions asked of you by going on to another subject. Did you initiate the suit and if so did you lose? Exactly what was the decision of the judge? What is the value of your property?

Anyone is real estate knows that an owner is legally liable when they knowingly withholding information related to a property sale. So you do need to let a potential buyer know what you know about your property. The association's property is a separate matter. Perhaps you need a good real estate broker to assist you!

I have no idea about the real situation based on your posts. Apparently neither does your second attorney.
If you can not clearly communicate and answer these questions then I will no longer respond to your posts.

TishS (Washington)
Posts: 116

Posted:

The reason I started the suit was to quiet the title. I purchased a property that the paperwork reflected I had CC&R that "ran with the land" and automatically transferred with the title. The CC&R's have jurisdictional property described. However in practice, the actual "HOA" does not resemble my CC&R's at all. The group in control do not have CC&R's, it is voluntary (with the exception of the original group) and they vote people out of the HOA. The BOD do not own property described by the CC&R's. There was not a single document in existence that explain this.

The only reason I lost was due to the statute of limitations. So there has been a "hybrid" voluntary/mandatory group created still without documentation. So, if I were to sell my property today, the new owner would get exactly what I did. Deed (listing CCR's and membership) Deed for common property (indicating 1/30th ownership) CC&R's (With one corporation) Bylaws and now they would also get Bylaws for a second corporation by the same name with completely different membership description.

Without the lawsuit, there would have been no way to uncover all of this garbage. Many people never even knew their properties had been named as part of any association, they have absolutely nothing on their deeds. Others only found out after the fact that they were part of a voluntary group and that they could be voted out and there was already a plan in place to get rid of them.

But I agree with you Roger...whatever this is that we have now I would not try and call it a homeowners association. Perhaps with everyone now knowing what is going on, we could form one.

TishS (Washington)
Posts: 116

Posted:

Oh by the way..the statute of limitations had run on this mess 11 years before I bought my property. I trusted the documents I received from title and then again at the beginning of the court action. It was not until way into the case did it come out about the dissolving of the corporation and the creation of a brand new corporation by the same name. The second set of bylaws that were recorded with the county were only recorded on 6 of the 97 original properties effected by the new corporation bylaws. The properties these were recorded on are actually in a completely different HOA..this was not an accident..they purchased separate beach rights from their lots or so they believed..they are part of the voluntary group.

Trust me I know this is crazy, but I have found two other HOA's that are dealing with the same situation caused by the same developer, they have no answers either.

RogerB (Colorado)
Posts: 5,067

Posted:

Tish, I think the answer is:
1) Stay in the current HOA and accept the current situation with an agreement that your assessment would be the same as the dues for those homeowners who voluntarily join the HOA. And hopefully all would be allowed access to the HOA's amenities; or
2) Those owners who have a manditory assessment could form a separate HOA.

MaryA1 (Arizona)
Posts: 388

Posted:

Tish,

Copied below is an explanation of a quiet title suit. As I stated in an earlier thread I cannot understand why you started a quiet title action.

You say you lost your case because of the statute of limitations. That also does not make any sense to me. I know that some states have a law that if an amendment to the CCRs is not challenged w/i one year after it was approved then it cannot be challenged. Is that what the statute of limitations applies to?

You also stated the judge ruled that the new HOA is legal (the one started after the orig one was administratively dissolved, which was the one you belonged to)and that it is voluntary. To me this means you do not have to belong to the HOA if you don't want to. Whether the HOA is voluntary or mandatory or even if there is an HOA has no bearing on your CCRs. The CCRs are still attached to your land and can be enforced by the voluntary HOA-- even on those prop owners who choose not to join the HOA. BTW the deed would not state the presence of an HOA, only whether there were deed restrictions attached to the property.

From the info you have posted regarding the court's ruling, the orig CCRs that you received when you purchased your property no longer apply because that HOA was admin. dissolved. The new HOA that was formed is voluntary and has a new set of bylaws and CCRs.

IMO, the BOD should take the following action:

1) Review the CCRs and make changes according to the court ruling, i.e. HOA membership is voluntary.

2) Review the bylaws and make changes as necessary.

3) Send a letter to each property owner letting them know that the HOA is voluntary and only those who wish to belong are subject to the CCRs and bylaws. The deed restrictions are still valid on those properties that have deeds stating "subject to deed restrictions". The HOA may enforce the deed restrictions on those properties whether the property owner belongs to the HOA or not. Also let the property owners know that they no longer have beach priviliges unless they are members of the HOA since the HOA owns the beach property.

4) Once the CCRs and bylaws have been amended they should be sent to all the members of the HOA. The members should be instructed to destroy any CCRs and bylaws that they have and only use the ones that are being sent now.

MaryA1 (Arizona)
Posts: 388

Posted:

Tish,

Sorry, I forgot to paste this to my last message! It's no fun getting
old(er)!

I'm curious to know why you filed a quiet title suit. Did you have any of the issues mentioned in the explanation below?

From law.com:
quiet title action
n. a lawsuit to establish a party's title to real property against anyone and everyone, and thus "quiet" any challenges or claims to the title. Such a suit usually arises when there is some question about clear title, there exists some recorded problem (such as an old lease or failure to clear title after payment of a mortgage), an error in description which casts doubt on the amount of property owned, or an easement used for years without a recorded description. An action for quiet title requires description of the property to be "quieted," naming as defendants anyone who might have an interest (including descendants-known or unknown- of prior owners), and the factual and legal basis for the claim of title. Notice must be given to all potentially interested parties, including known and unknown, by publication. If the court is convinced title is in the plaintiff (the plaintiff owns the title), a quiet title judgment will be granted which can be recorded and thus provide legal "good title." Quiet title actions are a common example of "friendly" lawsuits in which often there is no opposition.

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