How can we be a trust

Started by JoyceA2 • 7 replies • 737 views

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JoyceA2 (Tennessee)
Posts: 16

Posted:

At the yearly meeting for Home Owners meeting was last Sat. The Trustees Attorney was there and informed us we are NOT an HOA but a TRUST. I have no deal what this means for us as homeowners and when I bought my property was told an HOA.

I asked several questions and was told to sit down. How can we be in a trust and pay Fee's. Help!!!!!!

SueW6 (Michigan)
Posts: 814

Posted:

Check your deed. Are you still under developer's control? If so, THAT ownership may be a trust.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

A HOA is more like a "Club". A club made up of only homeowners. (When owned by the owners). Now a HOA can be "incorporated". If it is, then it's most likely going to be a not for profit corporation. Not all HOA's are incorporated. Lack of incorporation doesn't mean not required to pay dues. It just means your HOA isn't a corporation. Something that helps out with taxes.

A HOA is only funded by it's members for it's members. So there are still expenses to be paid. Whether or not your HOA is incorporated. It just doesn't live under what many call the "Corporate shield". A benefit for a group like a HOA.

Former HOA President

DouglasK1 (Florida)
Posts: 2,046

Posted:

As Sue mentioned, documentation attached to your deed would be your first source of truth. There are probably CCRs, Covenants, Deed restrictions, or some similar attached to the deed. If there is an association, it should be explicitly defined there. Any other structure (trust?) should also be defined, including any responsibilities or duties for that structure.

Escaped former treasurer and director of a self managed association.

JoyceA2 (Tennessee)
Posts: 16

Posted:

National Development corporation was the developer years ago but went bankrupt. The Attorney is saying it was at that time it went into a trust. I have checked my deed and it says nothing of a trust, HOA, covenants. Nothing.

Another homeowner asked the attorney for the Trustees for documentation showing it as a Trust and he said there are none. He also stated it would be on our deed. I know it is NOT on mine.

So if this is indeed in a trust, what does that mean as home owners here and the fee's we have been paying?

Thanks for all your help.

RoyalP
Posts: 1,104

Posted:

Reread your deed,

look for wording similar to:

subject to easements

subject to restrictions

subject to covenants

as per attached appendix 'x,y,z'.

Look for the type of deed:

warranty

quit claim

deed of/in trust.

Check with your 'closing attorney'.

Check with your 'title insurance' company.

Check with your county's 'register of deeds' for covenants or restrictions.

Your deed need not 'spell out' encumbrances, it needs only to refer to their existence.

eg. '...subject to any x,y,z of record...'

If your deed is in fact 'free and clear' of encumbrances you are 'off the hook', but, you may STILL be 'on the hook' for your share of funding any roads or essential infrastructure from which you benefit.

You probably will need an attorney versed in BOTH real estate AND HOA contract law.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

I have checked my deed and it says nothing of a trust, HOA, covenants. Nothing.

So if this is indeed in a trust, what does that mean as home owners here and the fee's we have been paying?

Keep digging. Its there somewhere. It might be on a previous deed. Or original deed to the development. Title search. You can remove or add anything you want to a deed and file it. I could remove my CCR's from my deed completely and re-file it with the state. I could add no golden retrievers to my deed. Anything I want.

The last owner could have removed it from the deed. That does not mean its not legally removed and your not still legally required to pay dues.

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By JoyceA2 on 11/12/2018 4:08 PM

So if this is indeed in a trust, what does that mean as home owners here and the fee's we have been paying?

Hopefully the fees have been used for some beneficial purpose, but in any case most likely that is water under the bridge.

If you don't think the fees benefit you adequately, and that you are not contractually required (via your covenants) to pay them, one option would be to just stop paying. If the trustee(s) think otherwise, they could record a lien, sue for the money, or potentially sue for foreclosure. A judge would then decide who is right.

That option seems like a big gamble to me without first having a competent attorney review your situation and provide you a written opinion that you are not subject to any assessments. If you have neighbors in a similar situation, you might see if they are willing to chip in on an attorney to share the cost.

Escaped former treasurer and director of a self managed association.

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