inactive HOA

We have not had an HOA meeting in over five years. All previously elected officers' commissions expired over three years ago (they were for 2-year terms). Currently, the last elected treasurer is paying Sec. of State fees to keep the HOA in good standing, paying HOA expenses and collecting yearly dues. She is also paying for neighbourhood improvement projects such as mailbox repair, etc. and deciding who should be hired to do the repairs. Two of the past Architectural Review committee members have been authorizing or denying homeowners' submitted home improvement projects. I say none of them have the authority to do any of this any more. Woman acting as treasurer has provided nothing but a one-year profit and loss statement for 2009--nothing else. This P&L showed over $20,000 in HOA bank account and yearly expenses of slightly over $3,000. She has denied my requests for full financial disclosure. Past President, VP and Secretary have all moved away.

Can anyone of these people actually file a lien on my house if I don't pay my dues? I would like to refuse payment until financial disclosures are made and an HOA meeting is organized. I offerred to organize a meeting three times last year to the only "acting" board member (the treasurer) but she refused to give me email addresses of neighbours so that I could do so. HOA dues are very small ($120/year) but I don't like the idea that three people are making all the decision about "my" money.

So the question is, under the above circumstances, do I HAVE to pay my dues?...thanks...ana

Here is the statute regarding association records:

38-33.3-317. Association records.

(1) (a) The association shall keep financial records sufficiently detailed to enable the association to comply with section 38-33.3-316 (8) concerning statements of unpaid assessments.

(b) The association shall keep as permanent records minutes of all meetings of unit owners and the executive board, a record of all actions taken by the unit owners or executive board by written ballot or written consent in lieu of a meeting, a record of all actions taken by a committee of the executive board in place of the executive board on behalf of the association, and a record of all waivers of notices of meetings of unit owners and of the executive board or any committee of the executive board.

(c) (I) The association or its agent shall maintain a record of unit owners in a form that permits preparation of a list of the names and addresses of all unit owners, showing the number of votes each unit owner is entitled to vote.

(II) Notwithstanding section 38-33.3-117 (1) (l), this paragraph (c) shall not apply to a unit, or the owner thereof, if the unit is a time-share unit, as defined in section 38-33-110 (7).

(d) The association shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

(2) (a) Except as otherwise provided in paragraph (b) of this subsection (2), all financial and other records shall be made reasonably available for examination and copying by any unit owner and such owner's authorized agents.

(b) (I) Notwithstanding paragraph (a) of this subsection (2), a membership list or any part thereof may not be obtained or used by any person for any purpose unrelated to a unit owner's interest as a unit owner without consent of the executive board.

(II) Without limiting the generality of subparagraph (I) of this paragraph (b), without the consent of the executive board, a membership list or any part thereof may not be:

(A) Used to solicit money or property unless such money or property will be used solely to solicit the votes of the unit owners in an election to be held by the association;

(B) Used for any commercial purpose; or

(C) Sold to or purchased by any person.

(3) The association may charge a fee, which may be collected in advance but which shall not exceed the association's actual cost per page, for copies of association records.

(4) As used in this section, "reasonably available" means available during normal business hours, upon notice of five business days, or at the next regularly scheduled meeting if such meeting occurs within thirty days after the request, to the extent that:

(a) The request is made in good faith and for a proper purpose;

(b) The request describes with reasonable particularity the records sought and the purpose of the request; and

(c) The records are relevant to the purpose of the request.

(5) In addition to the records specified in subsection (1) of this section, the association shall keep a copy of each of the following records at its principal office:

(a) Its articles of incorporation, if it is a corporation, or the corresponding organizational documents if it is another form of entity;

(b) The declaration;

(c) The covenants;

(d) Its bylaws;

(e) Resolutions adopted by its executive board relating to the characteristics, qualifications, rights, limitations, and obligations of unit owners or any class or category of unit owners;

(f) The minutes of all unit owners' meetings, and records of all action taken by unit owners without a meeting, for the past three years;

(g) All written communications within the past three years to unit owners generally as unit owners;

(h) A list of the names and business or home addresses of its current directors and officers;

(i) Its most recent annual report, if any; and

(j) All financial audits or reviews conducted pursuant to section 38-33.3-303 (4) (b) during the immediately preceding three years.

(6) This section shall not be construed to affect:

(a) The right of a unit owner to inspect records:

(I) Under corporation statutes governing the inspection of lists of shareholders or members prior to an annual meeting; or

(II) If the unit owner is in litigation with the association, to the same extent as any other litigant; or

(b) The power of a court, independently of this article, to compel the production of association records for examination on proof by a unit owner of proper purpose.

(7) This section shall not be construed to invalidate any provision of the declaration, bylaws, the corporate law under which the association is organized, or other documents that more broadly defines records of the association that are subject to inspection and copying by unit owners, or that grants unit owners freer access to such records; except that the privacy protections contained in paragraph (b) of subsection (2) of this section shall supersede any such provision.

Source: L. 91: Entire article added, p. 1756, § 1, effective July 1, 1992. L. 2005: Entire section amended, p. 1387, § 18, effective January 1, 2006. L. 2006: (2), (3), (4), and (7) amended, p. 1224, § 13, effective May 26.

Paste the below statute information into a letter you write and where you are requesting your annual information Pursuant to CCIOA 38-33.3-209.4. Then send the letter Certified Return Receipt to the appropriate individuals.

38-33.3-209.4. Public disclosures required - identity of association - agent - manager - contact information.

(2) Within ninety days after assuming control from the declarant pursuant to section 38-33.3-303 (5), and within ninety days after the end of each fiscal year thereafter, the association shall make the following information available to unit owners upon reasonable notice in accordance with subsection (3) of this section:

(a) The date on which its fiscal year commences;

(b) Its operating budget for the current fiscal year;

(c) A list, by unit type, of the association's current assessments, including both regular and special assessments;

(d) Its annual financial statements, including any amounts held in reserve for the fiscal year immediately preceding the current annual disclosure;

(e) The results of its most recent available financial audit or review;

(f) A list of all association insurance policies, including, but not limited to, property, general liability, association director and officer professional liability, and fidelity policies. Such list shall include the company names, policy limits, policy deductibles, additional named insureds, and expiration dates of the policies listed.

(g) All the association's bylaws, articles, and rules and regulations;

(h) The minutes of the executive board and member meetings for the fiscal year immediately preceding the current annual disclosure; and

(i) The association's responsible governance policies adopted under section 38-33.3-209.5.

Also ... just noticed I forgot the subsection 3 which needs to be added to your letter.

(3) It is the intent of this section to allow the association the widest possible latitude in methods and means of disclosure, while requiring that the information be readily available at no cost to unit owners at their convenience. Disclosure shall be accomplished by one of the following means: Posting on an internet web page with accompanying notice of the web address via first-class mail or e-mail; the maintenance of a literature table or binder at the association's principal place of business; or mail or personal delivery. The cost of such distribution shall be accounted for as a common expense liability.

to answer your questions with my opinion:

Is $20K a surplus? No. One major disaster, heck, even repairing ditches, drainage and resurfacing the road will drain that.

I have not only heard of such HOA's, but i have been involved in them. Heck, I ran one for several years, somewhat like your treasurer is doing.

Is the HOA legally inactive? Is there such a definition in the legal terms? What constitutes inactive? And if it is legally inactive, so what? The HOA has assets, it has contracts, so what does inactive mean to an organization that really can't be inactive.

Your HOA is not efficient. Perhaps it is inactive. But basically, so what? It still has a job to do, and legally, if the HOA fails at doing those jobs, then the owners who belong to (but don't activate the) HOA can be held legally responsible for said failure.

Horrible case scenario: HOA is supposed to have insurance on the common area road. HOA is inactive, doesn't pay insurance. road deteriotes, someone has an accident on it, gets hurt. THey sue the HOA, because the HOA is the owner of the road, and has a duty to maintain it in a safe condition. There's no HOA, so guess what... the members of the HOA are now on the hook for the lawsuit.

And I am not a lawyer, but it's possible, those with the deepest pockets will lose the most. So as an owner and member of this inactive company you are a shareholder of, I urge you to get active and get it going, for your own protection.

I don't know what kinds of accounts the money is in, that will be a good question...there are about 40 homes in our HOA and for some reason two of the cul-de-sacs are not county maintained while the rest of them are...I don't know why...I will keep plugging on getting things going...thanks for all your advice...Ana

we checked, in fact we live right next to the county shop where the road maintenance equipment lives...thanks, A

38-33.3-401. Registration - annual fees.

(1) Every unit owners' association organized under section 38-33.3-301 shall register annually with the director of the division of real estate, in the form and manner specified by the director.

(2) (a) Except as otherwise provided in paragraph (b) of this subsection (2), the annual registration shall be accompanied by a fee in the amount set by the director in accordance with section 12-61-111.5, C.R.S., and shall include the information required to be disclosed under section 38-33.3-209.4 (1). The information shall be updated within ninety days of any change, in accordance with section 38-33.3-209.4 (1).

(b) A unit owners' association shall be exempt from the fee, but not the registration requirement, if the association:

(I) Has annual revenues of five thousand dollars or less; or

(II) Is not authorized to make assessments and does not have any revenue.

(3) A registration shall be valid for one year. An association that fails to register, or whose annual registration has expired, is ineligible to impose or enforce a lien for assessments under section 38-33.3-316 or to pursue any action or employ any enforcement mechanism otherwise available to it under section 38-33.3-123 until it is again validly registered pursuant to this section. A lien for assessments previously filed during a period in which the association was validly registered or before registration was required pursuant to this section shall not be extinguished by a lapse in the association's registration, but any pending enforcement proceedings related to such lien shall be suspended, and any applicable time limits tolled, until the association is again validly registered pursuant to this section.

(4) Administratively final determinations by the director of the division of real estate concerning the validity or timeliness of registrations under this section are subject to judicial review pursuant to section 24-4-106 (11), C.R.S.

(Editor's note: This section is effective January 1, 2011. Source: L. 2010: Entire part added, (HB 10-1278), ch. 365, p. 1723, § 5, effective January 1, 2011.)

What questions do you have,after seeing the P/L for the year?

How did you find out the HOa had $20,000 surplus? Was that on th P/L for this year? Probably not.

Ask for a Balance Sheet and an itemized P/L for the year.

Is she keeping the finances on a computer? Maybe her hesitancy is that she uses a handwritten ledger.