Newbie: Our HOA's Name Question

Started by MelD1 • 34 replies • 3010 views

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MelD1 (Delaware)
Posts: 17

Posted:

Hi, just joined this site today looking for info sources on HOA's. My first question has to do with naming an HOA. We formed our baby HOA 2 weeks ago and today received a letter from management saying we can't use the name. The name is 'HOA of *name of community*', like most HOA's I've noticed are named. I haven't read any regulations anywhere regarding what you can or can't name an HOA. I'm in the State of Delaware.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

You can name it "Fish Guts Community" if you want as long as no one else is using it.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Mel,

Most likely that name is already in use. Your attorney should have verified your name with the States Corporation Commission prior to filing the paperwork (it's possible that this is what your management company did).

Tim

CarolF (Florida)
Posts: 435

Posted:

When you say "management" do you mean that you are still under the developers control? Who is management?
Are you starting transition from the developer to the homeowners? Did the developer start a corporation already for the HOA? Are you wanting to call it something different than what was set up. Also,it could be there is another corp. in Delaware already using the name you picked.

MelD1 (Delaware)
Posts: 17

Posted:

Yes, we are still under developer control. It's all rather confusing right now; we thought if we reversed the name and called it, say Mel's HOA instead of HOA of Mel that it would be alright, and no one gave us a heads up that it wouldn't be.

MelD1 (Delaware)
Posts: 17

Posted:

I'm sorry, I guess I'm not being clear...yes, the developer did incorporate an hoa about 4 years ago before a single home was built, but didn't tell any of the residents about it. In fact, it was stated that an hoa would never be necessary because the community would always be managed by them. We found out about the dev's hoa last month. We decided to form an actual homeowners association, used a reversal of the name of the first hoa and incorporated.
Clear as mud?
Anyone have any fun suggestions for a name using the initials n and p?

CarolF (Florida)
Posts: 435

Posted:

Mel - do you know if Delaware has any laws regarding mandatory transition to homeowners after a certain number of homes have been sold? Florida does. What does the paperwork you got when you bought your home say? Do you have "common ground" that is owned by the homeowners. Are you all individual homes,condominiums, or a combination?
Are we talking about a large community?

MelD1 (Delaware)
Posts: 17

Posted:

Thank you for taking an interest in my question; yes, I've found the laws pertaining to HOA's for Delaware. 75% homes sold is turnover time, but our documents received at closing say nothing about an HOA. On the contrary, they state that the homeowner will never be responsible for any common areas, but now they want to change everything. We have a combination of single detached homes and duplexes. The plan calls for 800+ homes but only 28 have been built and sold since the start of project.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Mel - individually, a homeowner is not responsible for common areas. COLLECTIVELY, as an HOA, they are.

MelD1 (Delaware)
Posts: 17

Posted:

Okay, that wasn't really my question, but thanks anyway.
So I've read up on some of the other threads and based on that, I'm going to recommend at tonight's meeting that we go ahead and change the name rather than fight this particular battle. We have bigger fish to fry. We'd like our name to reflect where we live as most HOA's do, but since their letter put us on official notice, we'll have to change it to something else rather than deal with litigation.
N. P. are the initials - anyone have any suggestions?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Why change it? Sounds like your pretty much legally sound with the one of the developers. Most of the time the Developers TURN OVER the HOA to the owners once they are done. The OWNERS then assume the responsibilities of the developer and paperwork. The OWNER formed HOA then CHANGES the existing paperwork to remove ALL Developer references.

Why reinvent the wheel? Your ONLY changing drivers!!! Matter of fact this is how most owner controlled HOA's are formed. The developer usually fills out the required paperwork on their end turning over the HOA to the owners and the owner's agree to those terms. They then get a copy of the CC&R's, By-laws, Articles of Incorporation, and/or Archectual Control documentation to do what they want with it. Sans the changes unless negotiated at the changeover.

This is a developer turnover correct? The owner's aren't jumping the gun and forming their own? Just make sure the developer did everything they promised to do like install drainage, pool or other amenities before they turn over. It's like the owners are buying the property as a collective from the developer.

Former HOA President

MelD1 (Delaware)
Posts: 17

Posted:

Since management has sent us this letter, that's putting us on notice. Sure, we can fight it, but frankly, we have far bigger fish to fry and in the long wrong it's better to let the dev think they won this little round - there's history on this dev that we recently discovered, but from out of state so it was not easily accessible.
No, this is not a turnover - we are only at 3.9% sold after 4 years.
The dev created the hoa and denied there ever being one. Our closing documents do not
state the existence of an hoa, and as a matter of fact, they state that homeowners will
never be responsible for common areas.
I apologize if I haven't made myself clear, but I realize that our situation is not exactly the normal
hoa startup situation.
Just looking for suggestions for names using the initials N and P?
Really, that's all for this particular thread. I'm sure I'll have lots more questions as they come up,
but for now this is the first issue we'll have to deal with tomorrow morning, and I've never seen a homeowner association name that was other than the name of the community.
Thank you, I appreciate everyone's help in this.

MelD1 (Delaware)
Posts: 17

Posted:

Quote:

Posted By MelD1 on 02/27/2011 12:48 PM
Since management has sent us this letter, that's putting us on notice. Sure, we can fight it, but frankly, we have far bigger fish to fry and in the long wrong it's better to let the dev think they won this little round - there's history on this dev that we recently discovered, but from out of state so it was not easily accessible.
No, this is not a turnover - we are only at 3.9% sold after 4 years.
The dev created the hoa and denied there ever being one. Our closing documents do not
state the existence of an hoa, and as a matter of fact, they state that homeowners will
never be responsible for common areas.
I apologize if I haven't made myself clear, but I realize that our situation is not exactly the normal
hoa startup situation.
Just looking for suggestions for names using the initials N and P?
Really, that's all for this particular thread. I'm sure I'll have lots more questions as they come up,
but for now this is the first issue we'll have to deal with tomorrow morning, and I've never seen a homeowner association name that was other than the name of the community.
Thank you, I appreciate everyone's help in this.

Sorry for the mispellings - I don't see an edit button to correct my typing errors!

CarolF (Florida)
Posts: 435

Posted:

Here are a few P words - Pointe, Park, Pines, Place, Preserve
N words - Nova, Northwood, Northgate

Mel - I sure would like to know how the county approved the development under the terms you state. Is there any way that you can research the original agreement. In FL this might be called a PUD (planned unit development) agreement.

MelD1 (Delaware)
Posts: 17

Posted:

Thank you! I'm liking New Preserve!
I've researched everything available in the public record, and it appears there were some pretty shady dealings, all this after what took place earlier in the other state.
We've got our hands full here with this.
Yes, it is a PUD.

BarbaraB10 (California)
Posts: 117

Posted:

Hi Mel

Finding a new name for the new entity will not solve your dilemma.

Attempts to set up another HOA within the established or pre-existing HOA could create more problems for you.

A new HOA would seemingly have no legal authority to collect assessments, rules enforcement, hold valid elections, etc. I don't even know if it would be permitted by law and I would encourage you to consult a competant attorney.

I understand your intention but perhaps there is a better way to accomplish your goals.

CarolF (Florida)
Posts: 435

Posted:

Barbara - I think there must be a lot more going on here. Perhaps the developer is going bankrupt or wants to sell off the original parcel and split off the 28 homes that are built from the original 800 platted and sell off the land. With today's environment it could take decades to complete the 800 unit development as planned. (sorry.....I'm speaking as a Floridian. Perhaps your area is not under the same dire economic conditions)

MelD1 (Delaware)
Posts: 17

Posted:

Carol, you may have just hit the nail on the head. This is a 10 year project and they should have around 220 homes completed by now. We have 29. I think renaming our hoa may be the least of our problems, but it's what we have to parry today. Tomorrow might be something else.
The executive board is meeting tonight, and we'll be speaking to our attorney in the morning, but I honestly believe the sooner we can resolve this relatively minor inconvenience, the sooner we can focus on the important issues.
I'm sure I'll be back again for more guidance in the future. Thanks everyone.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Mel - I am totally confused.

Why do you think you can establish an HOA when there is already one legally there - even if it is under developer's control and he's doing a crappy job?

Your HOA will have no legal authority and at this point will be nothing other than a social group.

Your REAL issue sounds like a developer who is evasive and non communicative.

Please keep us posted. I am curious as to what your lawyer says you can do.

Perhaps he can guide you as to how to get the developer to respond to your concerns.

MelD1 (Delaware)
Posts: 17

Posted:

I'm sure I'll be back with other questions, so no Susan, you haven't heard the last from me and my community I'm sure.
Our lawyer along with several of the state agencies say we don't have to change our name since we've already incorporated it and it is after all where we live.
But we will be changing it nevertheless. I believe this is bait to entice our hoa into a draining and lengthy legal fight in order to wear us down, so no, I'm not biting. We'd rather save our endurance and limited funds for the things that matter, like the fact that some of our homes are sinking into the wetlands the developer built them on, and the roofs that have caved in.
None of our homes are over 3 years old...yes, it's all very interesting. Thanks for your interest and have a great day.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

The good news is you may be able to claim some of your legal expenses off your taxes. If the legal costs involve your investment property. You may want to check into this to help out.

I agree with the other poster. You have an apple and oranges issues going on here. I can't tell you what to do but it seems there may be some renduncey with developer/homeowner association formation. If anything, it seems best to pursue a CLASS action lawsuit against your developer than form a HOA. A HOA is already formed and the best way to EVER sue your HOA is by class action or Majority voting.

Former HOA President

MelD1 (Delaware)
Posts: 17

Posted:

That is good news about the possible tax deduction, thank you.
As far as a class action, that is one of the many things already on the table, if it becomes necessary to do so. At present, we are still pursuing any and all avenues to avoid litigation.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Mel:

Here is a link for Delaware State Statutes, if needed: http://delcode.delaware.gov/title25/c081/index.shtml

Does your actual “Warranty Deed” for your property show Declaration of CCR’s attached to the property?

If not then I am somewhat a little confused regarding what the intentions are here. Are all the homeowners now agreeing and “signing” to form an HOA? Are they doing so because there is common property or common areas to maintain?

MelD1 (Delaware)
Posts: 17

Posted:

Hi Janet,
I just came across that law a few days ago and haven't digested the whole thing as yet.
No, there's no declaration of CCR's.
We're not at transition yet since we're only at just under 3% homes completed for this project.
We're a little confused too since when we all purchased, we were told there would never be an hoa, this is a completely maintenance free community, homeowners will never be responsible for any common areas whatsoever, etc, in writing. These are the reasons many of us built homes here.
Separately, at the rate homes are being built here, we may not be alive to deal with transition. So we have to deal with the problems with the tools we have now.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Mel:

Do me another favor ... read your Title Insurance Policy you received after closing and see if anything is listed regarding Articles of Incorporation, By-Laws, or CCR's. If not you may be able to call the Title Insurance Company and receive legal advice or other assistance from them also.

Be careful of anything you sign, vote, or participate in until you get some answers.

MelD1 (Delaware)
Posts: 17

Posted:

Done...nothing. No mention of Articles of Incorporation, By-Laws or CCR's in my Title Insurance Policy.

The last time we've given our signatures was at our closing - nothing since.

Thanks for guiding me to this.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Mel:

You are most welcome. The other item I recommend is to print a copy of the State Statutes, put into a small binder, read with different colored highlighters in hand. Highlight (i.e., orange) any developer rights and (i.e., yellow) homeowner rights, etc. Put post-in notes on possible items with questions you have. This will then inform you and help you in asking questions of MC, attorney, etc.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Mel - does this subdivision have ANY common areas? sidewalks, roads? entry gate? ponds? community center? lakes, docks, beach? parking structure? entry sign? landscaping? own a water system?

If so, WHO has been maintaining them?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Also, when reading on some items be sure to reference the “definitions”, if needed. For example it may reference units and which some may think are houses (and possibly be true for condominiums), but the definition may state something to the effect of area describing boundaries. For single family homes the only thing that describes boundaries is Lots in the plat. Just be aware of what you are reading and read carefully.

MelD1 (Delaware)
Posts: 17

Posted:

The developer Susan.

MelD1 (Delaware)
Posts: 17

Posted:

Yes, these things are tough reads and I already have quite the stack of documents. My head has been spinning with all of this since January.

MelD1 (Delaware)
Posts: 17

Posted:

I'm trying!
I also had to pull up some maps regarding wetlands; some from the FEMA website, some from state sources, but I need a degree to decipher them. According to some documents I've been able to retrieve, there were some issues during the planning phase, but approvals were signed anyway, and some of our homes have been built on wetlands.
We have alot of issues here.
Since I'm new here, should I start a new thread if I have a different question, or just continue on this thread?

BarbaraB10 (California)
Posts: 117

Posted:

HI Mel

If it's a NEW question & different topic, start a new thread.

If it is related to this topic, keep it here.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Mel:

Regarding some of the maps/plats ... if you need help reading or have questions take to your local city planning department and have them help you understand your Subdivision. Your taxes help pay their salaries and I found my local planning very helpful when needed. Sometimes you will need to ask very specific questions.

When you feel overwhelmed take a break for a few days ... it will still unfortunately be there later, but sometimes taking a short break gives a fresh outlook.

MelD1 (Delaware)
Posts: 17

Posted:

Now why didn't I think of that? Thanks Janet, I must be overwhelmed to have not thought of this answer about the maps.
And you're right - I'm sure I need to get away from this for a while.

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