State Charter

Hello all,
I am new to a small neighborhood, 12 homes, and as I was looking for the governing documents, I found that the state has forfeited our charter.

Does this mean the HOA is defunct and cannot pursue any violations or collect fees? I asked the one neighbor that I've met and she didn't have much to say about the HOA at all, that it depended on the board as to how active it really its. We want to upgrade our driveway, so should I follow all the restrictions?
Thanks for your help!

Fran

If the restrictions allow you to do as you want to do, then it should not be an issue to follow proper procedure and protect yourself.

Better safe then sorry.

HOA's are a unique type of corporation as their authority to operate is derived in part from state statutes and in part by the contractual provisions of the CC&R's.

In most states when a corporation is administratively dissolved, the corporation continues to exist but only for the limited purpose of winding down its operations; it cannot continue to conduct business. I interpret that to mean that a dissolved HOA cannot levy assessments or fines, hold meetings, or grant approvals as those part of its normal business activity.

I disagree with Tim's suggestions here and in other threads that the association still exists and may act as an unincorporated body. If the CC&R's obligate the owners to be members of a specific association organized as a non-profit corporation, then there is no authority to substitute some other association or some other form of organization without amending the declaration.

CC&R's normally seem to have at least some unconditional prohibitions and many also contain conditional items. If the CC&R's state that all houses must be painted white, then you cannot paint your house hot pink as the color choice is unconditional. On the other hand, if the CC&R's say house colors must be approved by the association, then the restriction is conditional; though unlikely, the association could approve a hot pink house.

My opinion (and I know of no law to support it) is that if the association has been dissolved by the state it no longer has authority to conduct its business, part of which would be to approve or reject color changes. Therefore, conditional restrictions cannot apply while the association is dissolved but unconditional restrictions stated in the declaration remain enforceable.

In the case of the driveway upgrade, you cannot do anything that is unconditionally prohibited by the CC&R's but you can make changes that might require approval if there was a functional association.

Since all attorneys are not created equal, the only safe option is to do nothing with the driveway, sell the house, and buy what you want elsewhere.

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