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JA1 (Colorado)
Posts: 3
Posted:
What happens when a voluntary HOA collapses? HOA's been in trouble for a long time. It is slowly collapsing in on itself. A little history. Less than a year ago, the then current BOD all resigned at the same time due to being called out for inappropriate behavior. New officers/members were found although most of them really did not want the positions. They just stepped up to the plate because it was needed and absolutely no one else would volunteer. Prior board refused to assist in transitions. Basically dropped a box of papers off and said "here you go". Difficult situation and possible things have gone from bad to worse. New president resigned after a few weeks. New VP became VP and acting President. They think their position give them total control and blanket abilities to say yes or no about anything they personally do not want or agree with. Only 3% of the development has housing or a structure built. A wilderness area that allows hunting, camping, permanent or part time living in permanent structures. The VP/acting Pres. has decided that inspite of local and state laws, they don't like hunting and camping and is making noise about using hiring an attorney to make exclusions for just our development. Basically deciding to speak for all the property owners without their knowledge or consent. Board members are resigning and there are not enough left for a quorum vote about anything. By-Laws state 4 members must be present for a quorum. If someone asked about hunting or camping they are told it is not legal or allowed which is not correct. The HOA should be disbanded and land use left up to the County, whose regulations the development follow anyway. Ideas or information anyone??
GlenL (Ohio)
Posts: 5,491
Posted:
What is the voluntary HOA set up to administer?


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JA1 (Colorado)
Posts: 3
Posted:
The HOA is basically there to administer only the Covenants, of which there are very few and basically reiterate the county's land use laws. The development was specifically set up as 5 acre hunting ranches. It's wilderness or mountain desert terrain. 97% of the area is undeveloped vacant land. Less than 3% have utilities - eveyone thing else operates off-grid, i.e. solar, propane, wood stoves, generators. Also, when the land was sold, the Declarant status was transferred to the propety owners and the HOA is not certified. The county basically said the HOA was a mess and the rules and regs that mandate how the properties are used will be as per the county's land use documents define. It's a registered not for profit corporation.
JA1 (Colorado)
Posts: 3
Posted:
The HOA is basically there to administer only the Covenants, of which there are very few and basically reiterate the county's land use laws. The development was specifically set up as 5 acre hunting ranches. It's wilderness or mountain desert terrain. 97% of the area is undeveloped vacant land. Less than 3% have utilities - eveyone thing else operates off-grid, i.e. solar, propane, wood stoves, generators. Also, when the land was sold, the Declarant status was transferred to the propety owners and the HOA is not certified. The county basically said the HOA was a mess and the rules and regs that mandate how the properties are used will be as per the county's land use documents define. It's a registered not for profit corporation.
JH3 (Maryland)
Posts: 67
Posted:
Typically, board members have the authority to enact rules/regulations without a vote of the members. The only time a member vote is required is when changing the Declaration or the By-Laws, or electing a new board. Your governing documents will spell out exactly what the board can and cannot do. Most By-Laws say something along the lines of "the board may enact new rules from time to time."

The board can create any rules they would like, as long as they do not conflict with the two documents noted above, or state/federal law.

If the HOA fails, for any reason, then the county/state would take over, and you and the rest of the members are at their mercy.
GlenL (Ohio)
Posts: 5,491
Posted:
What happens when a voluntary HOA collapses?
I'm not an attorney but I would imagine it becomes inactive and it would be up to the homeowners to enforce the covenants in a court of law. After a period of inactivity I would suspect the state would suspend the corporation that is the HOA, which can pose a problem if the owners want to reactivate it somewhere down the pike.

Do the HOA documents state what steps are required to dissolve it? If the HOA has no assets and no debts, I would think it would be fairly a straightforward process. If the HOA is responsible for any common areas, drainage ponds, monument signs, etc. and is no longer around to maintain insurance for them and someone is killed or injured on them then all of the owners may become liable without the corporation to shield them. You and your neighbors should pony up a few dollars and get a legal opinion on the pros & cons of letting it go and just what is required to dissolve it.

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