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VitoC2 (Florida)
Posts: 1
Posted:
Several years ago our HOA purchased a club that had previously been owned by another entity but we had been required to be members of via a separate declaration. At that time the LLC that owned the club dissolved the declaration and the HOA purchased the property but not the LLC that recorded the declaration. No other documents were filed.

We were told that this would become common area. After some time it was discovered that a new declaration was filed by the board making a new entity, assigning the property to the club and making the HOA board the members of the Club board. This new entity is not an LLC or a corp. We have the same property that is common area and also a new "club" governed by a second declaration.

I'm having trouble determining what authority the board has to enact a declaration in this manner and quite frankly, it seems like a mess. This second declaration is not being included or revealed during sales from my understanding which could further compound matters. From the experts, how big of a problem is this and what can be done to fix this?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
You need to discuss this with a corporate lawyer. May need to apply for Incorporation status with the state. LLC's are tricky. I like to call them "The one who gets the shortest straw goes to jail for the rest". That is why it's important to get a full understanding of corporate set up that best works for your HOA.

Most HOA's are (non-charitable) non-profit HOA's. It may be that since your HOA is involved with what could be an income producing investment, you could be a "For-Profit" corporation. Some HOA's with example golf clubs are For-Profit. Still an HOA but the entire budget and filing status is different.

Don't use a Real Estate attorney in this mess. You have a corporate filing issues. The board could be taking you all for their ride if kept an LLC.

Former HOA President
GenoS (Florida)
Posts: 4,276
Posted:
I concur with Melissa and think you need a good lawyer. From my limited understanding, taking on or disposing of real property in the form of "common property" may require a 100% vote of approval from the membership. And maybe the mortgage holders as well. An attorney can assist you in checking declarations, deeds, and other covenants that run with the land.

Depending on when the property was first deeded or placed under the "second declaraiton", MRTA could extinguish the deed restrictions after 30 years. You definitely need to talk to a lawyer. Maybe more than one since it sounds complicated and the abilities and expertise of laywes in Florida is, um... shall we say "questionable" in many respects. There are many good attorneys in Florida; the thing is there's no guarantee that you're going to find a good one right off the bat.

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