Small HOA rules

Hello,

I hope you can help us. We have a small 7-owner HOA with CC&R's & a road maintenance agreement. It has never been incorporated, nor registered with the CA Sec of State. The CC&R's do not lay out a governing board, only an architectural committee. Collections have been ignored since 2008 & most of us now want to start collecting again.

I've read we don't need to be incorporated, nor non-profit. The back tax returns have been filed (a formality). I've read we don't need a governing board, as long as 4 of the 7 vote... is this true? Also, can we change our CC&R's by owner vote as long as we issue proper notification & file an addendum with our county? And can we revive ourselves easily or is there some kind of defunct rule (the CC&R's say they are in force for 30 yrs).

PS. no one wants to pay for lawyers & only one owner (the offender) is against revival.

Thank you.

Also, which document, the CC&Rs or the private road agreement, specifies collecting funds (assessments)?

Does either document create an Association to collect and manage these funds?

I got the unincorporated info from Sirkin Law at andysirkin.com :

Also, What is the difference between an incorporated HOA and an unincorporated HOA?

The law allows a homeowners association to be either incorporated or unincorporated. An incorporated association has a legal identity that is separate from that of its members, just as Microsoft has a legal identity that is separate from its shareholders. Unlike Microsoft, which is a for profit corporation, an incorporated homeowners association is a non-profit mutual benefit corporation which means that its powers are limited to those normally associated with a homeowners association, and it is exempt from certain governmental fees and taxes.

Traditionally, homeowners associations have been incorporated to protect owners from responsibility for association debts, losses and liabilities. But California law extends most of these protections to owners of unincorporated associations provided the associations have proper insurance. Under current law, the advantages of incorporation are some (very limited) additional protection from owner liability, ease of opening association accounts with certain banks and vendors, and qualification of the units or lots for mortgage loans from lenders that require an incorporated association. Balanced against these advantages are the costs of forming the corporation, the burden of annually filing a form with the Secretary of State, and additional procedural formalities such as having officers and directors, and conducting formal meetings

JsC

Do you have a Custodian of Funds?

Do you have any funds?

What do you plan on doing when road repairs are needed?

If all are happy living in your neighborhood and are not looking to "control" other owners then why not leave it as is, A Road Fund Association versus form an HOA?

First, I am not an attorney and I do not work in the legal profession. This is how I see it:


Based only on what you are posting, it sounds like the owners of the road may either appoint a single individual to serve as custodian (treasurer) or an entity such as an Association.


Translation - the custodian would bring legal action against those who did not pay or intentionally damaged the road and the court would decide. This of course would be a civil case.


Lots of wording that I read as the Association may only seek redress through the courts and may not impose monetary charges (fines).


Ok, so you may not amend the road maintenance agreement.

However, if you have 4 members in agreement (7 lots times .51 rounded up) the CC&Rs can be amended. Once amended, the amendment will need to be filed with the County records office and attached to the deeds of all 7 lots. Once you have an amendment, you may want to employ an attorney to do the filing to make sure it's properly filed.

All

I think the issue is JsC, and maybe a few others, are not happy with how one renter is behaving so maybe the real question, road aside, is how can they control him?

I could be wrong.

Thank you for the responses. Does anyone see any reason we can't 1) go straight to lien for failure to pay road fees if owners vote to do so and 2) have an owner vote to change CC&R's to allow for fines to be leveled by the architectural committee?

Thank you very much for your ideas & resources provided. I will check it all out!

Forget NOLO, follow civil code. An assessment is considered late after 15 days, OR, what is written in the governing documents. I have seen them due on the 1st and late on the last day of the month.

Larry B13, thanks for joining the discussion. Here's another question... It appears 2 to 3 of the owners want nothing to do with voting/participating because their lots are bare & they want to sell them. That leaves 3 who care & one who is violating & daring us to do something about it. If say only 4 decide to vote on changing CC&R's, is that 51%? If it's not & we need all 7 to vote, how do we force that?

Personal liability versus corporate shield.