💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in

MelindaM3 (West Virginia)
Posts: 7
Posted:
I live in a "deed restricted" community with 75 single-family homes in West Virginia. The developer started building in the early 1970's.

My homeowners association was formed as a non-profit C Corp in 2004 when the homeowners took over from the developer. The HOA does not own, control, or maintain any common grounds, a pool, clubhouse, playground, golf course, etc. The streets in the community are owned and maintained by the county.

Unlike some other developments where the property deed references a CC&R document, our covenants and restrictions are directly written in each property's deed that was filed at the courthouse. The covenants haven't ever been changed.

In late 2009 the HOA sued a homeowner (filed an injunction) to stop construction of a shed in the homeowner's back yard.

In July 2010 the HOA had an annual meeting. The discussion about the lawsuit was "we filed suit because the shed violates the deed restriction stating that no external structures are permitted, the case is progressing, and on the advice of our attorney we can't say anything else."

Later in 2010 the HOA lost the suit, and the judge ordered the case dismissed with prejudice.

A few weeks ago the HOA had an annual meeting, the first since the July 2010 meeting. Yes, we went over two years between meetings. At this meeting we homeowners finally learned that that the HOA lost the lawsuit. The HOA president described the judge's ruling as "scathing" and said that it contained the following:

- While one covenant in our deeds states that there will be an "Architectural Review Board" that must approve exterior changes to the homes, the judge ruled that because there were never written standards created either by the developer or the HOA, that the covenant is unenforceable.

- Because other structures, including pools, fences, a doghouse, and children's play sets had been erected - some going back to before the HOA formed - and those homeowners were not cited/fined/sued, the HOA had lost the power to enforce the "no external structures" covenant.

- Because the HOA hadn't enforced or addressed violations of many other covenants, again some dating back even to before 2004 when the developer was still in control, the HOA had essentially given up it's power to enforce them as well. The current HOA president even admitted in the meeting that he had been quietly operating a home-based business (as an LLC) for over a decade, so he was in violation of the "no commercial use" covenant. And no, he did never cited himself for it, and the LLC is still active at his home address according to our Secretary of State's public records lookup site. So that covenant is now unenforceable.

- While the covenants are in our deeds, there is no stated process in our deeds for amending the covenants, so according to the judge any change would require filing a new deed with the county. This requires approval from 100% of the property owners as a property deed can't be changed without the owner's permission. Obviously 75 property owners are never going to agree 100% on a change to covenants, never mind that each homeowner would have to pay fees for filing an updated deed for the changes (estimate $3000 per homeowner from the HOA's attorney in legal and court filing fees).

I haven't read the case file or the ruling yet, though another homeowner plans to get the documents from the courthouse and make copies for everyone. IMO the HOA BoD should have at least had the ruling distributed two years ago. People in the community were quite upset to be finding out only now about the ruling.

If you've taken the time to read through all these details, my thanks. On to my questions:

1) While I know you can't read the judge's ruling or my deed, does anyone know if deeded convenants are severable or not? I can't find any language in my deed stating that if one covenant is deemed unenforceable then the remainder can stand. So, do they normally stand or fall as a group, or individually? Some homeowners seem to think that without a severability clause we have nothing left.

2) Do the current board members need to be personally concerned since they did not inform homeowners for two years about the decision? Several of the homes have been resold since then, and a new resident at the meeting indicated that she wanted to move into a community with a strong HOA, and only now she is finding out that the HOA has almost no power. To say she is PO'ed is an understatement.

3) Do the current board members need to be personally concerned if after the ruling the HOA did send out citations for violations even though the particular covenant was struck down by the judge? The board members have not changed since the case was filed in 2009.

4) It has been suggested that the HOA be terminated and a new one formed the "right way". My understanding is that:
- terminating the current HOA would require the approval of 80% of the affected homeowners (I found the appropriate code in WV law),
- if the HOA is shut down we would then have to wait a year before forming a new one, and
- forming a new HOA would require approval from 100% of the affected homeowners.

Frankly I don't see the HOA terminating as too many people want one and know that if it shuts down there are people in the community who would never vote to start up another one, especially those who got citations and paid fines for covenants that had been deemed unenforceable back in 2010.

Finally, the four people currently serving on the BoD (Pres, VP, Treas, Sec) are all resigning early next year; the Pres basically stated that he doesn't see the point of heading up an HOA that lacks the ability to enforce covenants. In fact, at the recent meeting he was the one who suggested that it be shut down.

After all that, my husband suggested that I run for a position on the Board as I am good at cleaning up messes and smoothing ruffled feathers. Before I throttle him for the suggestion, does anyone here have any experience as a member of a relatively toothless HOA for a group of really PO'ed homeowners?
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By MelindaM3 on 12/17/2012 10:22 AM

1) While I know you can't read the judge's ruling or my deed, does anyone know if deeded convenants are severable or not? I can't find any language in my deed stating that if one covenant is deemed unenforceable then the remainder can stand. So, do they normally stand or fall as a group, or individually? Some homeowners seem to think that without a severability clause we have nothing left.

This will depend on the judges written ruling and the actual language in the governing document. This may be a question for your attorney.

Quote:
Posted By MelindaM3 on 12/17/2012 10:22 AM

2) Do the current board members need to be personally concerned since they did not inform homeowners for two years about the decision? Several of the homes have been resold since then, and a new resident at the meeting indicated that she wanted to move into a community with a strong HOA, and only now she is finding out that the HOA has almost no power. To say she is PO'ed is an understatement.

I don't think so. The concern would be the members.

Per your posting, the Board didn't hold a meeting for two years. Typically, corporate laws require annual membership meetings. Where were the members demanding one?

Checks and balances exist in an HOA only if the membership are engaged enough to perform those checks.

Quote:
Posted By MelindaM3 on 12/17/2012 10:22 AM

3) Do the current board members need to be personally concerned if after the ruling the HOA did send out citations for violations even though the particular covenant was struck down by the judge? The board members have not changed since the case was filed in 2009.

Can't answer this without reading the ruling.

Typically, providing the Board enforces covenants equally, then there are no issues. They don't have to (they should, but don't have to) enforce all the covenants but those they do enforce should be enforced equally across the membership. Otherwise, as you have found out, the Board may lose if challenged in court.

Quote:
Posted By MelindaM3 on 12/17/2012 10:22 AM

4) It has been suggested that the HOA be terminated and a new one formed the "right way". My understanding is that:
- terminating the current HOA would require the approval of 80% of the affected homeowners (I found the appropriate code in WV law),
- if the HOA is shut down we would then have to wait a year before forming a new one, and
- forming a new HOA would require approval from 100% of the affected homeowners.

Terminating the corporation known as HOA,Inc. is not the same as dissolving the Association. This is because the deed restrictions created the HOA. Filing paperwork and paying filing fees created the corporation known as HOA, Inc.

To fully terminate the Association, you would need to amend the deed restrictions which, per your posting, will require 100% agreement.

To dissolve the corporation and reincorporate under a new name may not require 100% agreement. You would need to check with a local attorney versed in corporate law and property law.

Quote:
Posted By MelindaM3 on 12/17/2012 10:22 AM

Finally, the four people currently serving on the BoD (Pres, VP, Treas, Sec) are all resigning early next year; the Pres basically stated that he doesn't see the point of heading up an HOA that lacks the ability to enforce covenants. In fact, at the recent meeting he was the one who suggested that it be shut down.

After all that, my husband suggested that I run for a position on the Board as I am good at cleaning up messes and smoothing ruffled feathers. Before I throttle him for the suggestion, does anyone here have any experience as a member of a relatively toothless HOA for a group of really PO'ed homeowners?

Not that specific. However, I do have experience in rebuilding membership confidence in the Association.

Basically, start out be organizing the paperwork and keeping the membership informed. Once organized, you may be able to start enforcement procedures but will need to deal with:

a) documenting existing changes/violations - perhaps granting approval and moving forward.

b) developing architectural guidelines - if done correctly, it could take over a year to complete.

c) gather other volunteers - it appears apathy has set in and you will need help to clean up the mess. Therefore, you need to overcome this apathy.

d) Research, read and understand your deed restrictions, applicable HOA/COA and corporate laws and this court decision. Then ask questions based on your understanding. Perhaps this thread will be helpful: Subject: How to read a statute (law)

Welcome to the forum!

If you can provide a link to the ruling, it may provide better advice from other members of this forum.

Hope this helps,

Tim

LarryB13 (Arizona)
Posts: 4,099
Posted:
First impression is that is a real mess.

Why was the builder in control for 30 years? Was he only building two houses per year?

With the covenants stated in each deed, how do you even know if your deed has the same covenants as the home next door? The only way to know would be to read all 75 deeds word-by-word and compare each one to all the others. Over 30 years of selling homes the developer may have made changes that you know nothing about.

It sounds like part of the problem is that during the 30 years the developer was in control he allowed many exceptions to his own covenants. It would be extremely difficult to persuade a judge that the covenants prohibit certain things that the declarant himself permitted.

Why was there no association formed while the developer was in control? Normally CC&R's require owners to be members of an association and the developer establishes or incorporates the association before he begins selling homes. You cannot be a member of an association that does not exist. When the association was incorporated in 2004, where did the incorporating parties get their authority to do so?

In answer to your questions:

1) Based on your explanation of the judge's ruling, it sounds like you have little to nothing left to enforce. Your development has a 40-year history of neglecting the covenants. Unless you can get all the owners to agree to a new set of covenants, you have nothing to work with.

2) I see no personal liability for the board members in failing to inform the membership about a matter that is public record.

3) Yes, board members should be worried if they are attempting to enforce the covenants in defiance of a judical ruling. If a new violation should end up in court in front of the same judge, there will be hell to pay. The judge has already ruled that the covenants -- all of them -- are unenforceable.

4) If you really feel the overwhelming need to be told by others how to live your life it sounds like you need to start over with a new set of covenants because what you have now is trash.

MelindaM3 (West Virginia)
Posts: 7
Posted:
Wow! Thank you both for your responses. They were very helpful. I don't have answers to all of your questions, so I will answer the ones I can and find out the answers to the others.

This will depend on the judges written ruling and the actual language in the governing document. This may be a question for your attorney.

I think it is definitely a question for the attorney. Actually now I wonder if the attorney already answered this question for the current BoD, which is why the President said that the HOA corp should just shut down since it can't enforce the covenants.

Per your posting, the Board didn't hold a meeting for two years. Typically, corporate laws require annual membership meetings. Where were the members demanding one?

Several homeowners said they asked and kept getting put off - the BoD was looking for a meeting room, trying to coordinate their schedules, etc.

Terminating the corporation known as HOA,Inc. is not the same as dissolving the Association. This is because the deed restrictions created the HOA. Filing paperwork and paying filing fees created the corporation known as HOA, Inc.

To fully terminate the Association, you would need to amend the deed restrictions which, per your posting, will require 100% agreement.

To dissolve the corporation and reincorporate under a new name may not require 100% agreement. You would need to check with a local attorney versed in corporate law and property law.

Given that, I don't see how terminating the corp and creating a new one would change anything - the judge's ruling would still state that certain covenants in our deeds are unenforceable.

If you can provide a link to the ruling, it may provide better advice from other members of this forum.

Once I have a copy I can redact and then scan it, as my understanding is that we can't post personal or identifying info here, and I'm sure the ruling contains names, addresses, my HOA's name, etc. Otherwise my county doesn't post that stuff online - we're too small/poor to maintain that sort of an IT system.

Also, thank you for the link on how to read a statute/law.

First impression is that is a real mess.

And second, third, fourth...

Why was the builder in control for 30 years? Was he only building two houses per year?

With the covenants stated in each deed, how do you even know if your deed has the same covenants as the home next door? The only way to know would be to read all 75 deeds word-by-word and compare each one to all the others. Over 30 years of selling homes the developer may have made changes that you know nothing about.

It sounds like part of the problem is that during the 30 years the developer was in control he allowed many exceptions to his own covenants. It would be extremely difficult to persuade a judge that the covenants prohibit certain things that the declarant himself permitted.

Why was there no association formed while the developer was in control? Normally CC&R's require owners to be members of an association and the developer establishes or incorporates the association before he begins selling homes. You cannot be a member of an association that does not exist. When the association was incorporated in 2004, where did the incorporating parties get their authority to do so?

I don't know, I moved into my home in 2006. I do know that this isn't a "cookie cutter" community - people would buy a lot and then have a home built. The builder would sign off on the design and then build the house.

One of my neighbors is an original owner, I will ask her for the history on the rest.

3) Yes, board members should be worried if they are attempting to enforce the covenants in defiance of a judical ruling. If a new violation should end up in court in front of the same judge, there will be hell to pay. The judge has already ruled that the covenants -- all of them -- are unenforceable.

Well, since my county only has two judges for everything, there's a 50/50 chance of getting the same one - and I'm sure they talk to each other.

4) If you really feel the overwhelming need to be told by others how to live your life it sounds like you need to start over with a new set of covenants because what you have now is trash.

Actually I don't, which is another reason my husband suggested I take over. I manage IT folks and demanding customers in my day job, so I've become adept at using a soft touch to herd cats.
KevinK7 (Florida)
Posts: 1,343
Posted:
If each individual property has its own set of covenants and restrictions, I would think it is entirely possible to interpret that every home is its own individual subdivision capable of having its own HOA of one member - you. If there is no reference to a master association in charge of all the individual properties with their separate C&Rs, I don't see how an HOA can attempt to enforce the C&Rs because it would essentially amount to one subdivision attempting to enforce a neighboring subdivision's rules.

I would have to see the actual wording of the C&Rs but I am skeptical into the powers the HOA you mentioned possess.
MelindaM3 (West Virginia)
Posts: 7
Posted:
Just wanted to update, we have another meeting scheduled this weekend.

I did get a chance to read the ruling, "scathing" is an understatement. The HOA's authority to enforce any of the CC&R's is effectively dead due to selective enforcement since 2004, and other than filing suit, there are no provisions for other methods of enforcement, such as fees and liens, that exist in other developments.

While the covenants and restrictions still exist, if someone is bothered by a violation then the individuals will have to battle it out themselves. So, if my neighbor starts raising chickens, then either I get free eggs or I pay my attorney a retainer. I'll take the eggs, over medium... ;)

Most people I've spoken with do want the corporate entity to remain as a "Community Owners Association" that can accept voluntary dues for services like the street lights and snow plowing. The county is supposed to handle the latter, but it's rare to see a county truck in a residential area. They're also willing to chip in for the services. One person jokingly suggested that anyone who doesn't pay will get a pile of snow dumped at the end of the driveway.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By MelindaM3 on 02/04/2013 6:59 AM

Most people I've spoken with do want the corporate entity to remain as a "Community Owners Association" that can accept voluntary dues for services like the street lights and snow plowing. The county is supposed to handle the latter, but it's rare to see a county truck in a residential area.

Many snow plow companies won't plow city streets unless they are contracted to do so by the city. You should check with your attorney on the legalities involved if you do want to plow a city street yourself.
MelindaM3 (West Virginia)
Posts: 7
Posted:
Quote:
Posted By TimB4 on 02/04/2013 7:06 AM
Many snow plow companies won't plow city streets unless they are contracted to do so by the city. You should check with your attorney on the legalities involved if you do want to plow a city street yourself.

I did that at the meeting this past weekend and learned that since our roads are "priority 4" the county turns a blind eye if subdivision residents pay for private service. There is no "city" to get involved.

As for the rest, I did finally have to pull the case file and speak with the homeowner to get the full story, as the prior board just isn't talking (and they all resigned at the last meeting). Only one board member really met with the attorney and attended the hearings, the others had day jobs so depended on regular updates. The updates they got were so heavily edited as to be worthless.

Long story short, at the preliminary hearing the judge told the HOA attorney and the one board member pushing the case that if he saw them in court again, they would not like his ruling. Board member apparently thought he knew better and didn't convey that statement to anyone else. So, the case progressed through interrogatories, depositions, etc. and it came out how many current and prior homeowners, board members, etc. had violated the covenants - and many in fact had been quietly in violation for years - with no action taken and no intention by the board to address the issues.

Now, bear in mind these violations are not immediately noticeable like a pink house with purple polka dots, or unkempt property with cars on blocks, or any of the other things that everyone fears if they don't live in an HOA community. Far from it! If you drive through the subdivision it looks absolutely incredible. BUT, when you find out that one in five homes has an active, abeit low-key, business being run, the homeowner is on the HOA Board, and the public filing was done back in 1998 and it's been active ever since with no action taken by the HOA Board... not gonna fly with the judge. Same for all the other structures, pools, sheds, detached garages, gazebos, decks, etc. put up over the decades with no violation letter issued no matter how nicely built and well-maintained they are... not gonna fly with the judge.

So, long story short, we pay for the electric lights and snow plowing, and otherwise keep out of each other's business.
NicoleW4 (Georgia)
Posts: 41
Posted:
Hi Melinda,

I am going through this right now. I would really like to know the court case. Anything that will help me find it wuld be great!

Thanks,

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • ✓ Ask follow-up questions
  • ✓ Share your experience
  • ✓ Get expert advice
  • ✓ Access 350,000 discussions
Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here