Order of Docs / dissolving HOA

Order of Docs:

constitution
federal code
state law
local law (county, city)
Covenants, Conditions, & Restrictions
articles of incorporation
by-laws
resolutions (HOA rules and regs)

the HOA merely administers the Covenants

it is 'usually' incorporated for liability purposes (corporate shield of members)

removing the corp does NOT dissolve a required HOA under the Covenants

make ABSOLUTELY SURE y'all own no 'common elements' nor have ANY obligations as a group before you dissolve your shield

Hi Crystal

There are really 2 separate and independent paths to follow.

1. Articles of Incorporation. This gives your association protection under the Corporate laws of your state. It's typically filed with the Secretary of State. You could either let this lapse or you can fill out a form (probably available on the State's website) to dissolve it. Cost is probably in the range of $20-$50. I would do this last. In case you find something that bogs you down, it's best to keep the Articles (corporate protection) intact until everything else is gone.

2. Deed Restrictions. aka CC&Rs. These are filed at Recorder of Deeds office. If you have a valid vote to dissolve the HOA and eliminate all the deed restrictions, that dissolution document should be filed with the Recorder of Deeds. You can hold the vote without a lawyer, but I recommend using a lawyer for filing the dissolution document. Should be fairly inexpensive if you provide the lawyer with the appropriate record of the vote.

The complication comes in if a non-member has rights that will be affected by a dissolution. Example = mortgage lender. It really depends what your CC&Rs say. If the association has no real estate or easements, it should be fairly easy.

Do you have deed restrictions? Nothing about what can or cannot be built, etc.?

Crystal,
1) You can stop being a Corporation by not paying the yearly fee required by your state. But, that does not dissovlve the homeowners association.

2) Check your Bylaws to determine if the association can be terminated. But, terminating the association does not terminate the Declaration of CC&R (or whatever is the name of the document which controls your community).

3) To terminate the Declaration of CC&R you should talk to an attorney to see if it is possible. And if so, it may be very difficult and expensive.

If you want to be guaranteed that it will be both difficult and expensive, hire a lawyer. Heck, why not hire two so you can pay them both to argue with each other.

Crystal, you have already found the clause in your CC&R's that allows you to dissolve your association. Just do it. It is neither difficult nor expensive.

Thanks for the help everyone! In answering the questions We don't have any common area, but there is a sign, I guess that could be a hiccup. We have no services of any kind. I believe that our HOA was solely created to benefit the developer so that he could make the deal happen. The county owns the road and the water collection pond or whatever it's called. We do not pay any property taxes, so I would think that means we own no property.

We started to self manage several years ago so at this point, we are only building up our bank account since we don't have anything to spend it on. No one wants to be on the board and as it is in most HOA's, the same group of people show up for meetings. So add that no one wants to enforce any of the CCR's even when we had a board, it only makes sense to disband it.

There are some hold out's but I feel that they are living in a bit of an HOA fantasy land where the HOA drives the home values. And that is subjective at best.
thanks again!

Crystal

My immediate concern would be how would we "control" our neighbors without an HOA? Like all of a sudden 2 junk cars show up on someones property. A house needs painting real bad. Sheds pop up all over.

The controls (an active HOA) to prevent things are important to me.

Some years back I was looking at two similar new HOA developments. We decided on one versus the other. Some years later I drove through the one we looked at. The place had become chit hole. It looked like no one was in charge and people were doing as they wanted to do. The one we choose looked as good if not better then when we first bought.

The HOA purpose is NOT to keep or improve Home VALUES... It is to keep your homes ATTRACTIVE to potential buyers. Your example of why you did not buy proves that point. Home VALUES are based on real numbers. A Home being
ATTRACTIIVE TO POTENTIAL BUYERS keeps people wanting to pay those prices for that value.

Our HOA stated we could disband our HOA. However, if we did it had to be turned over to a management company. Which meant that we as owners lost all voting rights or control in our neighborhood. The Management company would be in charge. There would be no HOA board driving the MC. It would be ALL the MC. An option we choose not to do.

So make sure your documents don't have that caveat... Most HOA's do not own land. That is another misconception as well. That is why you do not hire a Real Estate attorney in a HOA. A HOA is a corporation and deals with contractual laws...

Thanks again for the advice, my next step is to research the deed as suggested here. I did find a deed last night, but the date the developer signed over the deed to our Association was while we had no state status as a corporation. We had lost our charter years before that and it wasn't until 2013 that we reinstated it. That may be a just a technicality or could it void the deed I wonder!

I also found the right of way easement for electric company for each lot. Is that common area?

Regarding the home values etc, in order to maintain that aspect of the HOA, you need a board. No one wants to be on the board, the same six people are quite done being on the board, which is why I feel the way that I do, just get rid of it. Even with the previous boards no one wanted to enforce the covenants. Everyone takes care of their yard etc and we are pretty lucky up to now that is the case.

But for now it feels like we are only paying an annual assessment for the sole purpose of, having a headache.

Crystal,

As a side note, are there any services the Association provides (trash/recycling, utilities for street lights, etc.)?

If there are, those would need to be handled as well.

I find it way too much work to control others. That is why HOA living is not a good fit for me. I just do not see that in Crystal's case the benefits out way the headaches and I believe worthy of looking into dissolution.

But obviously it works for you and many others. I wasn't being critical just making a statement.

if I found the Plat, and it's the only one recorded, would that be considered the approved plat? I ask because the only one I found still has the builder listed as the owner. I am still looking though! love the internet on a rainy sunday!

Thanks again everyone! I am going to start a new thread as I move forward, I have deduced the same thing now that I have the approved plat and the deed transferring it to us. We were not a corporation, but that does not affect the HOA itself from what you all have helped me to understand. So I need to figure out how to determine who the developer sold it to, (using a loophole), as I suspect it is they who are paying the taxes on it.