Form a HOA or find another way to enforce covenents?

I recently purchased a residence with my husband when we retired from the military (well, I was already retired, he just retired last year). The propery is in a division that has a dirt road with covenents that the residents are to maintain. The covenents also state that there are supposed to be meetings and that there are to be fees for the road collected yearly.

Here's my dilemma. We bought the property from the guy who was basically "in charge", for lack of a better phrase, of the collection of the fees for the road maintenence. I was given all of the documents that his wife did regarding that little chore. Basically, she sent out letters each year detailing who owed how much and people sent them (or didn't) checks.

Here's where it gets somewhat sticky: There was no board or HOA or Committee or any legal entity formed in this regard. The covenents were put in place by the company that owned the land prior to parceling it out. The problem I have now is twofold: Where is all the money that has been collected previously and how to move forward from this point?

I have decided to set a date to get the residents and property owners (folks that have lots without homes) together and hash all of this out. I want to proceed delicately, but there is already a problem with two of the residents running businesses on their properties in violation of the covenents.

The main issue right up front is establishing how much to charge for road maintenence. I have already spoken to several of the residents who feel the people that are illegally running businees should be charged more, but how do we even begin to determine how much more, let alone justify that?

I am thinking that at the least forming some sort of legal entity will help in that regard and also to prevent future owners from violating covenents. Needless to say, several property owners have not paid road fees. I imagine in order to recover those fees we would need a legal entity in place, right?

Any advice would be appreciated. I do intend on speaking to a lawyer to get a better idea of the legality of forming a board.

Thanks!

Kimberly H4 Va Good for you for volunteering. Good advice from Larry B13 (Ariz). Regular commenters from Va will be very helpful to you too.

1 - You say that the (restrictive) covenAnts on titles specify requiring meetings held & fees paid.

Meetings stated held by what or as part of what ? Fees stated paid to whom ? / to what entity ? Or is it a "to-be-created" entity stated under what formula within those covenAnts ?

You might take a look at Virginia's Ch 26 Virginia Property Owners' Association Act http://law.lis.virginia.gov/vacode/title55/chapter26/
§ 55-509. Definitions
. . . "Property owners' association" or "association" means an incorporated or unincorporated entity upon which responsibilities are imposed and to which authority is granted in the declaration."

2 - If your intention however is to persuade 100 % of owners , 100 % of mortgagees etc to consent voluntarily to a creation/incorporation/ assumption of roads ownership etc of something not platformed by lesser formula within the restrictions, I would be careful pedalling too aggressively about halting alleged violations at this point.

( As a legal researcher & member of a Building Scheme whose CCRs neither platform a compulsory POA nor provide for more than bare tenancy in common ownership of common element waterfront, it would now be over my dead body to allow the voluntary POA here to even get close to the powers of the condos I used to manage. Just look at some of the beefs at this website alone . . . )

3 - Larry cited above the interesting Arizona judgment Freeman v Sorchych 2011 upholding contributions where HOA lacks governance status even short of "unjust enrichment" but enough for its individual contributors to be compensated collectively for "equitable enrichment".

State be state, sets of covenants by covenants, outcomes can vary.

Last August a Texas Appeal court confirmed a lower court's striking down an "association"'s claims under equitable contribution, unjust enrichment, quantum meruit & contract. Very interesting discussion. That Texas association had even obtained municipal status & tried to operate like a legitimate municipality before being hogtied . . .

TIMBERCREEK CANYON POA V FOWLER et al 2015 http://caselaw.findlaw.com/tx-court-of-appeals/1710636.html

These outcomes can vary widely. If owners can be persuaded voluntarily, so much the better. Good for you for volunteering.

Thanks for all the input. I do think that I will simply make an attempt to get everyone together to hash out how we can get the road taken care of, first and foremost. Then we can worry about recouping some of the money for those who have not paid. I believe that trying to form an association at this point might not be in everyones interest, but we do need to have some way to agree on how to enforce the road fees and the covenents moving forward.

Hope you are all having a good start to your New Year!

Kimberly

Do you have a copy of the document that spells out the road covenant in it's entirety? It would seem that it too would spell out what to do to get others to pay up. It would seem that this type of covenant is similar in it's legal fortitude as the covenants that govern an HOA. And if it didn't then can you create any resolutions to fortify it, like we do to clarify certain sections?