Bankruptcy

Started by MyticeW • 2 replies • 1005 views

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MyticeW (South Carolina)
Posts: 1

Posted:

Our HOA is in process of being turnover to the community. The owner has been struggle in bankruptcy court for the last 18 months. In February they lost the battle and the courts have taken over. Now they are turning over the HOA over to the community. Is it possible to lower our HOA dues due to the fact that we have no club house, pool, play ground or any other amenities. Would it be more fesible to let the city take over or elect officers on our own. And for the ones that are behind on their dues since the community is being turned over to us can all past due balances be cancelled out and everyone start fresh.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You have got yourself some baby steps to take. No, the past debts can't be erased and started over from scratch. They are most likely already on the books for that property. Unless the members vote and decide to start over and forgive all previous debts prior to the turnover, I don't see it happening. Those dues are the INCOME of the HOA. HOA's are ONLY funded by it's members for it's members.

Of course you can reduce dues after the turnover to reflect the true costs of your HOA. However, you have to realize your going to have a more difficult time RAISING those dues in the future. It's easy to lower but nearly impossible to raise. Plus your HOA hasn't even decided what to cover yet and those costs. You are going to need a reserve fund, insurance, utilities, maintenance, and of course legal costs. It's the continued maintenance and upkeep of common property that takes the most money.

The HOA could disband altogether unless there are reasons you all need to stick together. There wouldn't be any turnover to the city. You all be separate homes and responsible for your own upkeep.

Former HOA President

BradP (Kansas)
Posts: 2,640

Posted:

It would be a bad idea to waive past debts, what about those folks who actually paid? Remember, once you open pandora's box you can't close it. You need to figure out what your costs are as an HOA and then look at your dues.

As for disbanding, you need to follow your documents. More than likely you have some common property that needs to be maintained and it is the homeowners responsibility to do so.

My suggestion, get a group of folks together and take on the task of making your place a good community. you bought knowing it was an hoa and what the dues were, be careful what you wish for.

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