Bought my home when HOA was dissolved. Now HOA is reinstated and demanding dues be payed.

Hi Max,

Welcome to the forum. I'll try to point out a few things within your posting and try to answer your questions:


A Homeowners Association/Condo Association is created by the deed restrictions (CC&Rs). The Association is typically formed to maintain common areas, provide specific services (trash/recycling, street lights, etc) and administer the contract known as the CC&Rs.

Most Associations become incorporated, as this gives the Association certain advantages and provides some protection to the membership. As a corporation, the Association must comply with State corporate laws, file annual reports etc.

Typically, if an Association fails to file an annual report for x years, the State will administratively dissolve the corporation. Dissolving the corporation does not dissolve the Association. It only removes the advantages that being incorporated provided.

To fully dissolve an Association the CC&Rs need to be amended or abolished. Typically this also requires the transfer or sale of all common areas.


Technically, you are both correct and incorrect with this statement.

When you purchased your property, I suspect that you signed some sort of paperwork acknowledging that there were deed restrictions (also known as the Declaration of Covenants Conditions and Restrictions or CC&Rs). These deed restrictions specified that, by buying the property, you agreed to comply with the deed restrictions.

Although you did not sign a contract with the Association, by purchasing the property and agreeing to comply with the CC&Rs, you entered into a contract with all other owners who have the same deed restrictions attached to their property.


Associations are either ran by the developer (also known as the Declarant) or by the membership (i.e. the owners of the properties). It's possible that the Declarant went bankrupt and the development, including the HOA, went into limbo.

It's also possible that no members were willing to serve on the Board and the Association went into limbo.

With either scenario, it's likely your neighbors didn't know anything and are just as surprised as you are on the turn of events. With either scenario, it's possible for an investor who owns many units to have enough votes to take control of the Association (which sounds like what happened).


If the deed restrictions specify that members will pay assessments, then yes - they probably have a legitimate claim.


This is how it works within mandatory Associations.
You will need to check your deed restrictions to be sure. However, it's typical for condominiums and Associations that have amenities (pool, playgrounds, trails, etc.) and common areas (roads, parks, parking lots, etc.) to requirements for the owners to pay their fair share for the upkeep, maintenance and repair of these items and to be mandatory members of the Association.


No, you do not fall into a loop hole.

If your property has deed restrictions, you are responsible to comply with the terms of the deed restrictions. Failure to do so allows the Association or any member to force compliance through the courts.


Yes, it's possible. The consent to have an Association is within the deed restrictions.

As I posted earlier, an Association is ran by it's members (i.e. you and your neighbors). If there is little to no involvement by the entire membership then those who are willing to be involved will be the ones who set the rules. Therefore, unless you like the way things are being done, it's best that you become involved with the running of your association.

I know that this isn't what you really wanted to hear, but it is the way things work within an HOA. I hope it helps.

I would suggest, in addition to paying the assessments you owe, request copies of the governing documents from your Association. The governing documents are the rules the members and the Association must comply with.

Here is a good description of the different govening documents and applicable GA laws.

Tim

This was the warning sign. But you ignored it. By signing this, you acknowledged there was an HOA and agreed to take care of the back dues.

Larry,

I believe that there are too many unknowns to even bring up that possibility.
For example:

Is the company that restarted the Association acting as the declarant?

Was a meeting held and the Max and the neighbors he talked to fail to receive notice or interpreted the notice as a non HOA meeting and failed to attend?

Are there common areas or amenities? (with the reference to "units" in Max's post, I am of the opinion that it's a condominium which would indicate common areas/common property)

Was the Association (not the corporation) functional but just failed to file the annual reports for lack of knowledge or, due to lack of involvement leave one or more individual/s who just paid the bills but never went after delinquent accounts?

Today I did some more research and found out some more information. First, the HOA was reinstated by the builder before he turned it over to the homeowners. He contacted a law firm to handle the process, and they remain the "agent" for the HOA. I called this law firm today and asked to speak with whoever is representing the HOA. I was transferred to a person who knew almost nothing. She said that I could email her with any questions and concerns, and she would forward my eamil to the board members of the HOA. I asked for names and contact information for the board members, and she said she was not allowed to give me that information. I asked for a copy of the covenants, and she didn't have them. As far as how they became the board members, I am still unaware. Concerning common areas, there are none. The subdivision is very small, consisting of two short streets and a small area where two dumpsters are located. When you enter the subdivision, there is a row of townhouses on both sides, and then another area begins and the units are individual houses. I guess my next step is to go to the local deed office, and get a copy of the covenants for myself. I'm beginning to think that I am required to be a part of the HOA, but I still have many questions about the shady way this all came to be. No one contacted me concerning a meeting to change possession of the HOA from the builder to the homeowners, I didn't get a vote for the board members, most of the units are rentals and a few of them are being rented as section 8 housing, the condition of the neighborhood is pretty poor. I really feel as though someone is trying to manipulate the system. Thanks for taking the time to respond with so much detailed information.

Its possible the two streets and the dumpster area are the common areas. How can you be sure that there is no common areas when you didn't even know there was an HOA? You have allot of homework to do.

I am dealing with EXACTLY the same situation in Texas. There was no HOA shown on my closing documents. I have filed a claim with my Title Policy....however, I am not confident this is going to help me. I never got any information that the HOA was reinstated, so maybe it never dissolved....I don't know. I got a Statement for $10 a month and $5 late fees for over a year. The statement was suspect because all 20 invoices are in sequential order, meaning they were created at one time and back-dated. I have finally received the CCRs, the document from the Secretary of State showing an appropriate non-profit filing and the by-laws from the attorney assigned to my lien. (He has actually been quite helpful.) This is a good sign. I will say that the Declaration CCR's talks about IF THERE IS AN HOA, so this does not seem to be the document that creates the HOA. I have asked for the names and contact information of the current board members, the minutes from the past 3 meetings, a most recent financial statement and the date of the next meeting. This would come from the management company and they have provided nothing. In fact, they never returned calls and never provided any information. Another fact that makes this situation suspect is the HOA fee is $10 a month. How can a management company support an HOA and still leave funds for the HOA at $10 a month? This is a rental property for me, so I am not in residence there. Has anyone heard of management companies finding defunct HOA's with appropriate documentation and "becoming" the HOA and collecting fees? Could this be happening?!? This has been a very frustrating process. Any insight is appreciated.

Does the actual deed (which you did sign) reference 'restrictions and/or covenants'?

Do said restrictions reference/establish the HOA?

Actually very simple issue:

Your deed is either

Encumbered

or

Not.

Read it and see for yourself.

This is exactly why your signature was required on the deed.

Next time: CAVEAT EMPTOR