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JoeM16 (Idaho)
Posts: 1
Posted:
Greetings,

I'm looking for advice. About a year ago my wife and I moved into a 14 lot subdivision. The subdivision, like most in our area, has an HOA with CCRs. HOAs in our area are popular for two reasons - (1) The city/county does no code enforcement so the HOA fills that role & (2) all new subdivisions are not part of the city/county roads system and we're responsible for our own road maintenance and snow removal.

Shortly after moving into our home we realized that the HOA is nonexistent. Of the 14 lots, only 4 have homes constructed and only 2 are full time residents. Now for the history... The division was developed by the original land owner who farmed the parcel for years. CCRs were registered with the county. In the CCRs it says that the HOA would be turned over to the home owners once 60% of the lots were sold. This never happened. The developer, who kept 2 lots for himself, moved from developer to an assumed role of President around 10 years ago. At first some residents payed HOA dues and payed their share or road maintenance (around 5k per year for the division). The "President" does all the road maintenance and other work covered by the dues (mostly infrastructure maintenance and weed removal). All the money paid in HOA dues and for road maintenance are just kept with no paper record. Quickly most homeowners stopped paying as the "President" never sent out bills, there was no communication, and conflict grew with a couple lot owners. The main conflict between the "President" and lot owners is the fact that his lot is a mess. He keeps an assortment of heavy equipment on his lot and a bunch of other junk (broken down car, shop equipment, and other items best described as junk) - all of which is prohibited in the CCRs. The only people that pay their bills are the 4 developed lots.

Now for what I've done... I talked with the other full-time resident and shared my concerns. Fortunately he had the same thoughts. We met with the "President", expressed our concerns, and laid out a plan. From that meeting we decided to open a bank account, send out a letter with a bill for 2017 HOA dues and 2016/17 road maintenance, assign temporary officers to get us started, and schedule our first meeting to elect officers. We also talked to the "President" about getting everything above board. If he's going to keep doing work around the division he needs to provide proper bills and be paid out of our account. I know this is still a stretch but the "President" wouldn't stop doing the work even if we asked him - Even though he subdivided the property he still feels like its his... which is very apparent in any discussion. My neighbor actually thought the "President" still owned of the area. I sent out the letter and we went to the bank to set up an account. When we went to the bank we figured out that we needed to have a tax ID number. We applied for non profit status yesterday using legal zoom. I sent out the letters to the other lot owners a week ago and haven't heard anything yet... but its still early.

For all the "Presidents" faults, he's really a nice guy. He hard working and would do anything for you - as long as you're on his good side. I feel like he understands things are not working... but isn't ready to turn over the reigns.

Are we on the right track? Does anyone have advice or thoughts?
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By JoeM16 on 03/13/2017 7:47 PM
G Of the 14 lots, only 4 have homes constructed and only 2 are full time residents. Now for the history... The division was developed by the original land owner who farmed the parcel for years. CCRs were registered with the county. In the CCRs it says that the HOA would be turned over to the home owners once 60% of the lots were sold. This never happened.

Were 60% of the lots sold? From your wording, I cannot tell.

AugustinD
Posts: 5,144
Posted:
Ignore my last post. You wrote that the developer kept two of the 14 lots for himself. So 12 lots were sold, and this is more than 60%.

1.
Obtaining the contact information for all of the HOA's members.

2.
Read and follow your CC&Rs regarding election of directors for the new board, and run an election. See what the CC&Rs say about reimbursing yourself for expenses paid for running an election.

3.
Until you have become legally elected to the board, I do not think it's appropriate to try to collect dues and open a bank account. If you do, you're kinda acting ultra vires.

4.
Once you have a legally elected board, open the bank account, compute what is needed to maintain roads etc., follow the CC&Rs regarding same, and start collecting dues, paying bills, and so on.
JanetB2 (Colorado)
Posts: 4,219
Posted:
You are on potential right track. The owners with the prior developer/president needs to call for a proper HOA meeting following your governing documents and state laws to elect your Board of Directors. Then take the ball and run ....

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