Voluntary to Mandatory Conversion?

I have another thread related to our "voluntary" HOA with mandatory covenants. Have gotten great advice and shared experiences from everyone. As I noted in the thread, the neighborhood is rather elderly and apathetic, but there is hope!
(http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/244179/view/topic/Default.aspx)

This is such as different topic, I am starting a new thread.

Background - 189 single family houses, elderly owners, about 20% rentals, 1 acre park and entrance signage.

I have read quite a bit about other organizations in Florida in the same circumstances - developers gave them CC&Rs based on voluntary association membership - some neighborhoods have folded and become like much of unregulated Florida neighborhoods (opinion only). Some neighborhoods figured a way to get 100% agreement to change the "voluntary" to "mandatory." I think our community might be the right kind for this to be the right solution - I say right kind as it is always going to be a magnet for older owners without much interest in involvement, and right solution because changing to mandatory might make it possible to pay a professional management company to stabilize the neighborhood by doing the administrative and financial record keeping - freeing the members to manage and provide oversight. It also is a good way to ensure even and neutral enforcement.

My thoughts... broadly, the concept involves standing up a CCR rewrite committee that would, in addition to removing "voluntary" and integrating "mandatory" throughout, remove those covenants that are unenforceable (our's has one that mandates no cars in the driveways and no garage doors open :-)). In NO way would we make the covenants more restrictive.

While the rewrite is going on, the Board and supporters in the community would talk up the need and offer to meet with anyone with questions - or, have a couple of community meetings where this could be accomplished. At every point the point would be to be open and answer questions, bring in neutral experts, etc.

Knowing there will NOT be 100% acceptance, use some of the "transition" methods spoken of on HOAT to allow continuation of voluntary status (i.e. not members) for those who want to remain so with the caveat the property will be sold with mandatory membership as terms of the sale - this seems to have worked in some areas, as those non-supporters are thinking pretty much only of themselves. Question: our CCRs are specific with a 90% requirement for modification - some on HOAT have noted this change would required 100%, others have said to try it with 90% with the strategy that unless the HOA is sued, the property will likely transfer as mandatory. Lots of fuzzy area here - BUT, some HOAs have been successful!

Without stable, fair dues payment (btw - I'm talking $50-70/year if everyone paid), the neighborhood is going to crumble ... given our circumstances, what would those that have done this, or seen this done, recommend?

Thanks!!

I wish I had more for you, George, but I think such a fundamental change in the nature of the association, from voluntary to mandatory, might require a 100% vote of approval from the owners in order to amend your CC&Rs since a fundamental right is being altered, namely, the right to not be under any obligation to pay dues or assessments. It might even take the approval of all mortgagees. Fundamentally impairing contractual rights in Florida is a big, big thing. The state constitution forbids it.

I'm no lawyer, but if you can't afford legal advice on the subject I think you should do extensive research on it. If it was me, I'd want to locate other associations that have done the same thing and take a close look at their experience.

My neighborhood was voluntary. An association amended to force mandatory membership upon transfer of ownership or voluntary joining. They did not obtain unanimous consent. They are currently being challenged in court (by me) with this being part of the argument, with legal precedent supporting my case.

Another neighborhood of mine also converted with less than 100%. They were sued. They lost. Better hire an attorney with experience in such a matter. If not, you can take the advice of the law firm that performed the conversions of my two neighborhoods. They argued that it was a legal gray area that you could get away with unless challenged...

My situations may be different but can present themselves as a lesson for what not to do for conversion. For instance, in neighborhood #1, there was no common property and the HOA in question was actually a neighboring association that attempted a complete rewrite and annexation of my section with a simple majority. In neighborhood #2, my property originally had no HOA but when another developer built a recreational facility down the street they assumed they were the HOA for the neighborhood. Despite not being anywhere in my original covenants they rewrote my restrictions to grant themselves authority and force membership with a littleore than a simple majority.

I am suing because of the clouding of my title and because the club has overstepped their authority. They insist architectural control and invent arbitrary and subjective rules that I believe diminishes the value of my property. I should not be be liable to a corporation I am not a member to and in which I had not consented to granting them expanded authority over my property.

Melissa,

As has been discussed in the past, there are different types of value.
You speak of one type. The OP may be speaking of a different type.

Melissa,

Kevin didn't say he was suing due to lose of property value.
He said he was suing for a clouded title.

He stated an opinion that he felt the boards decisions were lowering his property value.

Sounds like the OP is still under developer control and not owner. The Developer seems to have rewritten or filed new CC&R's. Which don't know how that "clouds a title". Don't get that connection. If developer is still in control, then not much one can do till they turn things over to the actual owners.

In my scenario, I believe it is probably the case of developers being sloppy. My original restrictions detail the specific lots that would be subject to the restrictions. There was no established HOA or recreational facility developed until 5 years after development, after many properties were sold and then after a change in developer. Their solution was to just build a clubhouse on a lot that is legally not a part of the neighborhood. They never altered the original documents or sought consent from the owners.

As for the other neighborhood, the area had numerous subdivisions, each with their own restrictions and potentially own association. Two different subdivisions made their own neighborhood. My home did not but that didn't stop the association from believing they could run the show and they filed new restrictions anyway. The county and state do not verify documents filed so in each case the associations did what they wanted.

This is why I use these two neighborhoods as an example of why someone may want to do their due diligence in crossing all their Ts and dotting all their Is. The costs can be destructive.

As for the lawsuit, I am suing because they have clouded my title, insisting a set of expired covenants and more restrictive covenants exist on my property that give eternal authority to a corporation that I am not a member to. It is also my belief that you not being part oof a HOA in Central Florida gives me an advantage and increased value should I determine to sell - any future owner would have the freedom to do whatever they wanted.

I guess I was unlucky to have two properties in two different neighborhoods that were represented by the same lawfirm that used dubious methods for conversion so I would recommend finding a firm well versed in the law and not one that will do what you ask and find a way to make it happen afterwards. The results could be detrimental to your association.

If I bought a home without any deed restrictions that obligated me to pay assessments to anyone and a stranger attempted to alter those deed restrictions without my consent you bet your a$$ I'd challenge their authority to do that. I don't have to prove that I suffered any monetary damages. It's enough that now my property is worth less simply because there would be additional restrictions on the property that didn't exist when I bought it. If the monthly carrying costs all of a sudden go up $20 a month then that diminishes the value of the home by locking out that segment of the market with purchasers that cannot afford that extra $240 a year.

My title would have been "clouded" since all of a sudden someone claimed the legal right to change the deed restrictions unilaterally without my consent. The damage is obvious and it doesn't take a specific dollar amount to prove it.