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ScottR9
Posts: 3
Posted:
New President here - yeah what a smart thing to do!
Ok we have 195 residents and over 50 acres of common area including a lake.
Reviewing the common area plat, we found 9 residents who have built a structure (pool, deck, shed, fence) up to 25 feet onto the common area behind their homes.
Obviously our bylaws and common sense prohibit this.
We have discussed with our insurance company and they advised that we have liability for that structure since it resides on land controlled by the HOA corporation.
Our board is split-
1. Remove the structures
2. Sell the the additional land ( which we certainly can do)

Even in discussions on selling it, the board argues. Some want to make them a deal way under market and others want to use the PVA value per square foot.
I do not want to reward bad behavior and feel they should remove the structure or pay PVA rates.

Suggestions?
JonD1
Posts: 2,310
Posted:
On what basis have you concluded you as a board have the right to sell common property?

In many cases this would not be the case without a homeowners vote to approve.

Either way this will be a complicated and costly project.

1 to determine fair pricing and acceptance with the property owners IF they deem to accept the opportunity to buy

2 to pursue legal action forcing those same owners tomremovemtheir structures, at their cost, with no legal cost to the HOA for enforcing the restrictions.

Which path is easier impossible to tell. As Dr. Phil says " you should never reward bad behavior".

Either way better buckle up and prepare for a few or more unhappy campers.

TimB4
Posts: 20,986
Posted:
First,

I would find out if the Association approved those structures.
If they did, that rules out forcing a tear down if common area land was known to be used.

Second, I would offer both alternatives to the current owner. This should be down through an attorney (as property law may come into question if the owner wants to argue adverse possession).

Explain that the Association has become aware of xyz that has encroached onto common area.
Please move the structure or, the board will entertain selling the property to you at current market rate.

Be realistic for the current market rate as nobody else will likely purchase the property you are willing to sell. However, it shouldn't be heavily discounted either. Therefore, you will need to get the land appraised prior to sending letters (so you know how much you will be asking). Keep in mind that you have a fiduciary duty to all members of your Association and, if selling common area, you should seek to obtain a reasonable price for the property.

TimB4
Posts: 20,986
Posted:
Quote:
Posted By JonD1 on 06/13/2016 6:52 PM
On what basis have you concluded you as a board have the right to sell common property?

In many cases this would not be the case without a homeowners vote to approve.

Jon makes a good point. Read your documents to determine if the Board has the authority to sell common area or if that authority rests with the membership. In my Association, such a decision is up to the Board.
TimB4
Posts: 20,986
Posted:
Oh, to keep issues down, you may need to offer all lots backing up to those common areas the opportunity to purchase the same amount of land for the same price.
ScottR8
Posts: 5
Posted:
I agree. We have a number of homes that are backed up with common ground and would make the same offer.
The board can sell, lease, rent, etc -including common ground.
Truly we have no use for the land they encroached upon but they can't get it free and we have to remove the liability.

Thanks for the responses!
TimB4
Posts: 20,986
Posted:
Oh,

When arguing with those that want to sell the land inexpensively, explain that there will be costs associated with selling the land:

The Association will have to pay for the survey and associated recording to subdivide the common area to make the portions of land syllable.

The Association will have the normal closing costs anyone else who sells land will have.

The Association will likely have legal expenses regardless of what they decide to do.

Also, the income received from the sale of the land will be taxable.
GlenL
Posts: 5,429
Posted:
I'm not an attorney nor do I play one on the Internet but I strongly advise you to get the HOA's attorney involved in this mishigas before you decide what to do or make any offers to sell property you may not be able to sell. I don't know how mortgages are written in Kentucky but most of the mortgages I've seen that involves an HOA includes a description of the individual lot and a line similar to this: and with an undivided interest in the common areas. So you may not be able to sell ANY of the common areas WITHOUT approval of anyone holding a mortgage, nor I suspect as Jon mentioned without the approval of 95-100% of the homeowners.
LarryB13
Posts: 4,089
Posted:
Scott,

What causes you to believe that there is encroachment? The reason I ask is that there is another thread on this forum where the OP claimed that someone was encroaching on common area but it appears his source for this belief was an aerial photo on which lot lines had been superimposed; it was not the work of a surveyor.

Assuming that you have some reason to believe that encroachment has occurred, I would suggest hiring a surveyor as the first step. You will have to hire one sooner or later and sooner is better because all other decisions will have to wait until the survey is done.

I have heard that if there is an encroachment that it may not be legal to just tear down any structures. I would seek legal advice before removing anything.

BTW, about 30 years ago a Phoenix city councilman who owned a home that bordered on a large city park announced that during the course of remodeling he found that his swimming pool had been built on city property. This led to the city commissioning a survey of the entire park and finding many homes that were encroaching. The city wisely offered to sell the offenders the land they occupied at fair market value or getting their stuff of the city land. Most chose to purchase the land.

ScottR9
Posts: 3
Posted:
It was discovered during a survey of all the common ground. An aerial view on the PVA website confirmed it also. It is pretty darn accurate as it shows property lines which I have confirmed by pins.
The big issue here is eliminating the liability.
We have discussed with our attorney and he confirmed we can sell a portion of the land to eliminate the liability.
I believe if we take it to a vote of the entire HOA, the vote will be to remove the structure. That will lead to legal issues we do not want to use our funds on.
Now to throw another wrench into this:
The survey was done to convey the common area from the developer to the HOA. This should have been done 10 years ago but the board then did not want the liability for the earthen dam on the lake.
The developer went into BK, the land was purchased by a land company.
They are honoring the deed of the common area to be conveyed to the HOA.
They gave no homeowner the right to build on land they owned at that time.
So in essence, we are inheriting this issue. Any previous board that may have verbally (there is nothing in writing) given approval truly had no right to do so.
Got to love being a president. At last count, I'm making $0.75 an hour!
TimB4
Posts: 20,986
Posted:
Makes it more simple.

Don't accept the land until this issue is cleared up.

Or has that time passed?
ScottR9
Posts: 3
Posted:
Land transfer is signed off. Ready for county approval on plats.
What a mess. I appreciate the input from all of you who have had more experience.
I am viewing running the HOA corporation as a business. A solution needs to be viable, fair and equitable and achieve the desire effect - eliminate the liability.
TimB4
Posts: 20,986
Posted:
The common answer seems to be give the owners the choice of:

1) Move the item
2) Buy the land at market rate
JeffT2
Posts: 896
Posted:
Quote:
Posted By TimB4 on 06/14/2016 7:32 AM
The common answer seems to be give the owners the choice of:

1) Move the item
2) Buy the land at market rate

Leasing the land is also possible, and depending on the lease provisions, will get rid of a lot of liability. Scott stated that the board has authority to lease.
BobD4
Posts: 997
Posted:
Quote:
Posted By ScottR9 It was discovered during a survey of all the common ground. It is pretty darn accurate . . I believe if we take it to a vote of the entire HOA, the vote will be to remove the structure. That will lead to legal issues we do not want to use our funds on. . .

ScottR9 KY Good advice above. Respectfully, unless your association wishes to tolerate whatever risks of allowing the status quo of the 9 encroachments, and unless it has good answers for future requests for others, why not ask your attorney to fashion a remedy from the condo universe. ( I presume your community is not subject to KY condo law).

Before the transfer is finalized on titles, could something like condo Exclusive Use common area agreements onto titles get the association indemnified ?

If - IF - such could be theorized as a pre-transfer developer deficiencies ( with the developer now safely defunct ), your lawyer might advise if maybe it could even squeak in without a 100 % owner & mortgagee vote.

Maybe the amendments might also get supplementary survey/conveyancing costs paid by all 9 sets of encroachers.

If I were an encroacher I would play ball to preserve my benefit. If I were a general member wanting to complete the devolution as cheaply as possible, I would consent.

TimB4
Posts: 20,986
Posted:
Scott,

If you do an internet search on HOA enforcement policies you will find actual policies of Associations (you will also see articles and ads for companies but those are easily ignored). If you add Kentucky to the front of those words, you may be able to minimize the search to just KY HOAs that have posted their polices online.
TimB4
Posts: 20,986
Posted:
Quote:
Posted By TimB4 on 06/14/2016 3:17 PM
Scott,

If you do an internet search on HOA enforcement policies you will find actual policies of Associations (you will also see articles and ads for companies but those are easily ignored). If you add Kentucky to the front of those words, you may be able to minimize the search to just KY HOAs that have posted their polices online.

OOPS Wrong thread.

Sorry about that.
LarryB13
Posts: 4,089
Posted:
Quote:
Posted By ScottR9 on 06/14/2016 6:49 AM
The big issue here is eliminating the liability.


How exactly does one acquire a "liability" when someone encroaches on his property?

ScottR8
Posts: 5
Posted:
According to our insurance company, we are responsible for the safety of all structures residing on common ground.
In the case of a swimming pool, liability would extend to proper fencing, maintenance, etc.
I'm sure a lawyer can find a good reason to include us and our multimillion dollar liability policy in any suit they bring especially if the structure causing the injury is on land we own.
LarryB13
Posts: 4,089
Posted:
Quote:
Posted By ScottR8 on 06/14/2016 7:06 PM
According to our insurance company, we are responsible for the safety of all structures residing on common ground.


Would I be correct in assuming that you are seeking legal advice from your insurance agent - and not from your lawyer - because the insurance agent does not charge $250 an hour to talk to you?

ScottR8
Posts: 5
Posted:
Our lawyer reviewed this situation also. We needed our liability insurance company to give us their take on it since they would be involved financially if something happened.
We need to remove any possible liability exposure.
BobD4
Posts: 997
Posted:
Quote:
Posted By LarryB13 on 06/14/2016 6:57 PM
Posted By ScottR9 on 06/14/2016 6:49 AM The big issue here is eliminating the liability.
How exactly does one acquire a "liability" when someone encroaches on his property ?

LarryB13 raises some very thought-provoking questions.

Can an 'occupier' be shielded from liability for - or able to be later indemnified - by an arms-length / external source of what now allegedly causes injury or loss occurring on the occupiers’ property ie sort of vicarious Occupiers Liability analysis ? Maybe not easy answers, particularly with knowledge of risks & passage of time . . .

Whether shielded or ‘No duty’ Scenario ONE : ten minutes after you blissfully jump onto a plane for a brief midsummer trip - leaving your property vacant & presumably not requiring a checkup - your neighbour without warning nor authority constructs or piles something without your knowledge or authority. It is partially or totally on your property.

You return innocently late on day 2, to see an ambulance taking away your own newspaper delivery person onto whom the buckshee debris has fallen without provocation or victim contribution. The injury occurred while your newspaper was being delivered to your door.

Is this much different from some traffic accident between strangers that happens anywhere offsite ?

But how much of the next scenario is ‘occupier - shielded’ ? Scenario TWO : You consciously accept a legal title to property with a surveyed boundary line visibly encumbered by the same sort of debris in Scenario ONE. But this time you previously saw the encroachments and have chosen to leave it there for some time- maybe for months or years : "I didn't put it there. Not my occupier liability ".
But finally the stuff injures a delivery person / visitor, say 3 years later . . . . .

Now sued or jointly sued by your delivery-person, could you get away with ? : “The neighbour put it there 3 years ago. Not my duty to remove nor cancel delivery !”

Could the neighbour get away with ? : “ My predecessor put it there many years ago; not my duty to remove it either !” .

Looking down at an injured plaintiff, what will a civil court do with these 'We didn't Do It' defences by you and your current neighbour ?

Fortunately sounds like Scott R9s lawyer, insurers & other Directors aren’t keen to run the risks to find out.

Even more there may also be a covenanted duty or statutory duty to defend the integrity of the boundary ( as noted by others ), to adequately address risks technically within the boundary howsoever they got there, maybe to receive future requests to add or enlarge encroachments.
AdrienneA
Posts: 2
Posted:
New member here. Your comment re: selling common ground was interesting. How can anyone belonging to an HOA buy common ground? After all common ground is owned by everyone living there.

Personally, there's a problem in the complex where I live in So. Cal. The HOA gave one homeowner a reasonably big chunk of common ground; and I was hoping to get info here re: whether it's legal or not.

From what I gather from your information it's a case of different HOA's have different rules.
ScottR8
Posts: 5
Posted:
Our situation is to clear up some encroachment issues when the common ground is deeded over by the developer- which will happen shortly.
This will be a one-time fix to an "inherited" situation.
The first two residents were notified this week. What a mess. One resident purchased their home 6 months ago with a deck and concrete playground on common ground. They will seek remedy from the realtor for misrepresenting the land.
More updates to follow.
KerryL1
Posts: 14,519
Posted:
Adrienne. You might find your answer in your CC&Rs. Our state that no common area may be sold without 67% approval of Owners. The Artice & section is cry near the end of our CC&Rs, but I don't know where else you might find it.

You might want to start a new thread with your question, which is somewhat different than this one.
AdrienneA
Posts: 2
Posted:
I'm new at this, so I am addressing both kind souls for answering me.

It's kind of scary. We buy homes in places like this, and then find that the left hand doesn't know what the right hand is doing. There always seems to be one problem or another coming up. I believe that common ground should stay like that; i.e, we all own a portion of it; otherwise it's just not fair that only 67% vote can give homeowners more land.
NpS
Posts: 4,187
Posted:
Quote:
Posted By JeffT2 on 06/14/2016 8:50 AM
Leasing the land is also possible, and depending on the lease provisions, will get rid of a lot of liability. Scott stated that the board has authority to lease.

Scott
Have you given any thought to jeff's suggestion?

Sikubali jukumu. Read all posts at your own risk.
ScottR8
Posts: 5
Posted:
Yes the issue with the lease is that not all the liability is removed and, as you all know, who wants to collect more money?
The board has chosen to solve the issue for all future owners of affected properties.
Don't want to have to deal with it in the future.

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