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What Happens If An HOA Expires?

Started by MichaelB32 • 9 replies • 865 views

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MichaelB32 (California)
Posts: 141
Posted:
Our ByLaws and CC&R’s says the our HOA will expired in 2041. There is a ballot going around to extent our HOA life beyond this date. My question is if the HOA does not get the required 75% of the members to approve these revisions, what happens then? With an expired HOA, who collects dues and maintains the common area? Our HOA is in California. How does our States handle an expired HOA? How can it be legal anyway to expire a government? I though that only worked with invasions.
Michael Barto
[email protected]
TimB4 (Tennessee)
Posts: 21,059
Posted:
Can you provide the full language (leaving the name of the Association out of it) of that passage in your governing documents?

Thanks,

Tim
GenoS (Florida)
Posts: 4,276
Posted:
Michael, please don't use anyone's real name, even if it's your own. See "Our Posting Rules" above, it's included in #3.

It's a corporation, not a government.

Corporations can be dissolved. The actual deed restrictions and covenants would survive the termination. Usually there are provisions to automatically renew the existence of the association in 10-year increments (or some other number) unless the owners vote in some large percentage (90 or even 100 percent) to terminate. Even without the incorporated HOA, the homeowners would still be on the hook for whatever obligations the community is responsible for, e.g. roads, lighting, water and irrigation permits, maybe trash collection, maintenance of the common property, etc.

If you don't get the 75% needed to extend the life of the association you've still got 22 years to try again.
MichaelB32 (California)
Posts: 141
Posted:
This is from our CC&R's:

"Section 13.01. Duration. This Declaration shall continue in full force for a term of approximately sixty-two (62 years, commencing on the date hereof, and ending on August 31, 2041. There shall be n severance by sale, conveyance, encumbrance or hypothecation of an interest in any Unit from the concomitant Membership in the Association, as long as this Declaration shall continue in full force and effect. The provisions of this Article are subject to the provisions of Article X and XI of this Declaration."

Couple of other things. The Association property is on a land that is on a sublease that expires on August 31, 2041. The reason our HOA is doing this is to extent the sub lease. Note: I say sublease. A real estate developer has the lease with the property owner till 2056. Of course all of this has to be put to a vote (75% yes) for anything to happen.
Michael Barto
[email protected]
TimB4 (Tennessee)
Posts: 21,059
Posted:
Michael,

Thank you for the additional info.
I have never heard of this happening.
Your situation is the first I've read about.

Richard, being from CA, may have some insight.

Obviously, the Board should also consult with an attorney (I would think, one versed in property law).
DouglasK1 (Florida)
Posts: 2,046
Posted:
Just to be clear, it doesn't seem like just the HOA expires, but the entire declaration goes away. I'm with Tim, this would warrant spending some money on a lawyer to see what you options are and what will happen after the declaration expires. Do you have any common elements that require maintenance?
Escaped former treasurer and director of a self managed association.
FredS7 (Arizona)
Posts: 927
Posted:
> The Association property is on a land that is on a sublease that expires on August 31, 2041

On government land? This is the only case I have heard of when owned property is on leased land.

If the (sub)lease is up...can someone come in with a bulldozer and put up a shopping center?
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By FredS7 on 12/06/2018 7:21 AM
> The Association property is on a land that is on a sublease that expires on August 31, 2041

On government land? This is the only case I have heard of when owned property is on leased land.

If the (sub)lease is up...can someone come in with a bulldozer and put up a shopping center?

While not common it happens. It was quite common in mobile home parks. The land owner can take back the land. I do not know if the owner would have to compensate those living on it.
DouglasK1 (Florida)
Posts: 2,046
Posted:
It's not clear to me if only the common property is on leased land or if the houses are too. In any case, I doubt that you'll find anyone here with experience in this situation, and I'd be getting with a lawyer in a hurry.
Escaped former treasurer and director of a self managed association.
SueW6 (Michigan)
Posts: 814
Posted:
This sub lease contract has no assurance unless there is a legal lease between the property owner and the first lessee.

What do you know about THAT contract?

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