Legacy Homes

Started by AlexF2 • 7 replies • 899 views

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AlexF2 (Georgia)
Posts: 12

Posted:

Background:
A developer in Georgia built 19 homes in a new subdivision then went bankrupt. The homes were deeded into an HOA, but it was never funded by the developer and the owners never transitioned it to their own control, so while it remains on record as an incorporated HOA, the developer who bought the remaining 160 lots in the bankruptcy sale created a new HOA and included the lots for the original 19 homes in the list of eligible lots for the new HOA. The 19 lots are within the plotted geography of the HOA, but their deeds do not currently bind them to it. The legacy homes are free to join the newer HOA (opt in), but cannot be forced to do so. Three of them have joined, leaving 16 remaining outside the HOA.

Situation:
The HOA for the newer 160 homes is responsible for paying the utilities (entrance lights, street lights, common area watering, etc.), insurance for the common areas within the community, maintenance on the storm water retention ponds, and general repairs of common elements such as the equipment at the neighborhood playground. The 16 legacy homes that are not members have been getting a free ride in the amount of $125.21 per year, which is the per house portion of the common element expenses for the entire neighborhood. (The yearly assessment per member home is only $250)

Discussion Points:
* The Board could invoice each of the 16 legacy homes for their share of the expenses, and some might actually pay.
* The Board could provide the option of the homeowner joining the HOA, paying the yearly assessment which would cover their share of the expenses.
* The Board could take any of the legacy homeowners who didn't join or pay the invoiced charges to Small Claims court.

I am interested in other thoughts or ideas on this subject. Thanks.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

What I would do? Reduce the number in your membership by 16. Do they really need to be included in these other expenses anyways? Like insurance for the common property (Which I hope includes Board member liability)? They just don't get the full benefits. If they want them, then they have to join or Atleast contribute their fair share.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

The Board should not perpetrate a fraud by billing those who they know not to be members.

The legacy homes are not getting a "free ride". Blame the developer who failed to do things properly.

If you want to take legal action, fine.
Keep in mind, based on what you provided, you may lose - but at least you would have a definitive answer.

By the way, when the 3 owners joined, were those deeds amended to show the new HOA?
If not, this may be an issue when the home is sold.

This whole thing is a legal issue and you need to consult with an attorney and decide what can and what can't be done. Figure the cost of exploring options and decide if it's worth it or not.

AlexF2 (Georgia)
Posts: 12

Posted:

Thanks Tim.

According to our lawyer, we cannot bill them as members, but we could bill them actual costs for their share of expenses for items that they use, which includes the street lights, storm drains, etc. The $125 excludes anything related to the administration or management of the Association.

Further to that, the last developer amended the CC&R's so that the parcels that their homes are on are within the geographic responsibility of the HOA. Their deeds mention a different HOA, so they are technically encumbered under one either way, it's just that their original one is defunct. The three that joined us had to sign the Opt-In agreement which was registered with the county clerk placing them within our HOA.

You know, that gives me another thought. I might have our lawyer look at having their original HOA put into a receivership since it technically still exists. If we got the court to appoint our Board as the administrator for their HOA under receivership we could explore merging the two HOA's. Problem solved. What do you think?

LetA (Nevada)
Posts: 2,679

Posted:

Are these 16 home lots situated inside the other 160 lots? Do they use the same entrance & exit as the 160 lots? Is this a gated community?
Are you sure the deed wasn't annexed?

AlexF2 (Georgia)
Posts: 12

Posted:

The 19 legacy homes are in the same subdivision and the second developer amended our CC&R's to list the plot numbers for each of the legacy home lots within the defined geography of our HOA. The CCR's state that we cannot annex any of the legacy homes until two thirds (13) of them have opted in on their own accord. Then the rest can be forced to join us.

They use the same entrance as all the other homes in the neighborhood, and these are not gated. The original developer spaced these homes around on lots throughout the neighborhood, so you will find one on a street where the rest of the lots are newer homes and part of our HOA. Because they are so dispersed, it isn't a simple matter to just stop providing unpaid for services just to the legacy homes. Turning off their street lights for example would affect our HOA members as well.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Do they not have plats in Georgia? If so, what does the plat say for the community? Has it ever been amended?

DaveD3 (Michigan)
Posts: 796

Posted:

Quote:

Posted By AlexF2 on 02/17/2018 12:59 PM
The 19 legacy homes are in the same subdivision and the second developer amended our CC&R's to list the plot numbers for each of the legacy home lots within the defined geography of our HOA. The CCR's state that we cannot annex any of the legacy homes until two thirds (13) of them have opted in on their own accord. Then the rest can be forced to join us.

They use the same entrance as all the other homes in the neighborhood, and these are not gated. The original developer spaced these homes around on lots throughout the neighborhood, so you will find one on a street where the rest of the lots are newer homes and part of our HOA. Because they are so dispersed, it isn't a simple matter to just stop providing unpaid for services just to the legacy homes. Turning off their street lights for example would affect our HOA members as well.

Suck it up and leave them alone. They're not part of your association and have no obligation to it.

At best, you can sell them on the idea of joining. Or you can take them to court for money they don't want to give you, and ensure that they never want anything to do with your HOA.

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