Are our CC&Rs void?

Started by SterlingR • 16 replies • 807 views

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SterlingR (California)
Posts: 8

Posted:

I live in a rural "subdivision" of 10 parcels. The CC&Rs were recorded with the county in 1988 and I was given a copy of them when I bought the parcel in 2000. There is a clause in the CC&Rs that states:

"At all meetings of Members, the first of which shall be held no later than six (6) months following the sale of the first Parcel, the presence in person or by proxy of Owners holding at least 50% of the voting power shall constitute a quorum for the transaction of business."

I can find no record of any meetings being held and none of the older parcel owners believe any meeting took place. Some parcel owners believe that since no meeting took place within 6 months of the sale of the first parcel the CC&Rs are void. Some of the parcel owners may be interested enforcing the CC&Rs for road maintenance. It seems that we could send out a notice that we are going to hold a meeting and as long as at least 5 parcel owners showed up we could start enforcing the CC&Rs as outlined in the document. Is this correct? Would our actions be enforceable?
Thanks

SheliaH (Indiana)
Posts: 6,964

Posted:

You really need to speak to a HOA attorney, but I would think if they were recorded with your county, they don't disappear just because the meeting wasn't held and no one has bothered to enforce them. Maybe the meeting WAS held, but no one took notes. The older residents may have bought their homes from the original owners and never knew what happened because they weren't told either.

The CCRs are applicable to everyone, so anyone could decide to sue someone else for not complying with them. The question is whether you'd be sucessful because a judge might say "this hasn't been enforced since 1988" and deem them void.

You and your neighbors (preferably all of them) do need to meet and decide what you're going to do, especially if the HOA is responsible for road maintenance. That costs money and the HOA (meaning all of you) will have to pay for it unless you can figure out how to get your county to take it over - it may not want to because you'd probably have to be declared a special tax district or something so taxes can be collected from all of you to pay for it. If you do nothing and something happens on the road, the HOA might be held responsible and since it appears no one bothered to set it up and run it, you and all your neighbors might be held personally liable. That can get REALLY expensive.

Have your meeting and then pass the hat so you can talk to a HOA attorney about all this and see what your options are. Good luck!

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

RoyalP
Posts: 1,104

Posted:

Quote:

Posted By SheliaH on 05/10/2019 12:47 PM
You really need to speak to a HOA attorney, but I would think if they were recorded with your county, they don't disappear just because the meeting wasn't held and no one has bothered to enforce them. Maybe the meeting WAS held, but no one took notes. The older residents may have bought their homes from the original owners and never knew what happened because they weren't told either.

The CCRs are applicable to everyone, so anyone could decide to sue someone else for not complying with them. The question is whether you'd be sucessful because a judge might say "this hasn't been enforced since 1988" and deem them void.

You and your neighbors (preferably all of them) do need to meet and decide what you're going to do, especially if the HOA is responsible for road maintenance. That costs money and the HOA (meaning all of you) will have to pay for it unless you can figure out how to get your county to take it over - it may not want to because you'd probably have to be declared a special tax district or something so taxes can be collected from all of you to pay for it. If you do nothing and something happens on the road, the HOA might be held responsible and since it appears no one bothered to set it up and run it, you and all your neighbors might be held personally liable. That can get REALLY expensive.

Have your meeting and then pass the hat so you can talk to a HOA attorney about all this and see what your options are. Good luck!

+ you have publicly acknowledged that you KNOW y'all are responsible for the roads +

SterlingR (California)
Posts: 8

Posted:

I'm confused by the above statement. If the CC&Rs are not enforceable then there is no HOA, correct? (We don't have a separate HOA). Who would be holding us responsible for what?
I've called the law firm that wrote the CC&Rs (they are still in business) and asked for clarification on that clause but they haven't returned my calls.
This is a touchy situation since right now some of the residents that don't want to have the CC&Rs voluntarily participate in road repairs when they feel like it. Even discussion of having the CC&Rs enforced could remove any future participation if we were not to prevail and would cause a lot of ill-will between the residents. Most of the residents are on fixed income (some are on disability) and they are afraid of what would happen if they are in the minority when deciding on road maintenance (i.e., repaving vs fixing pot holes).

CathyA3 (Ohio)
Posts: 6,299

Posted:

As Sheila noted, you really need to talk to an attorney who is well versed in HOA law.

CC&Rs are provisions and restrictions that are attached to your deed and the deeds of the others. These provisions nearly always "run with the land", which means they don't disappear if someone sells their property.

CC&Rs may exist independent of an HOA but often they go hand in hand. An HOA is a legal construct and also doesn't disappear if people are ignoring it. It would have to be dissolved by vote of a majority of members in order to get rid of it. It is possible that your corporate status has lapsed, which is a different matter. In the latter case, it means that property owners are jointly and *personally* liable if the HOA is sued.

CC&Rs can always be "enforced" via lawsuit. If someone is injured or harmed because the road wasn't maintained, then that person can sue those responsible for road maintenance, and the costs of fighting such a suit usually exceed the cost of keeping the road in good repair even if the judge ends up ruling in favor of the HOA. On going litigation can also make it difficult or impossible to sell your property until the legal issues are resolved.

If the majority of owners are on fixed incomes, it really is in their best interests to be proactive and do things properly, since that is usually the least expensive option.

SterlingR (California)
Posts: 8

Posted:

After re-reading the CC&Rs and the input here this is what I'm concluding:
1) All 10 parcel owners are members of a HOA as designated by the CC&Rs (whether they like it or not).
2) The original members of the HOA may have been delinquent by not having a meeting and electing directors within 6 months of the sale of the first parcel however it is unlikely that that voided the CC&Rs.

I understand the comments on getting an attorney but I know several members would not agree to that. We previously had a bad experience when we got together to get some culverts fixed and took the matter to court to collect. We did not prevail and some owners were quite disgusted with this. So if we were going to get an attorney a few members would need to take on the responsibility. I don't mind paying my fair share but I'm not going subsidize other members. And if we did get an attorney and it was determined that the CC&Rs were invalid there is no chance that we would get the same cooperation for future repairs from the members who did not want to get an attorney. That is why I'd like to determine for sure (or within reason) that the CC&Rs are valid before I pursue this.

Even if the CC&Rs were valid I'm not sure the members would want to pursue this. There is likely one member (and possibly more) that would refuse to pay on principal. So we would have to go through the process of placing a lien and (if we wanted to collect) go through foreclosure. I don't know if I or other members are up to doing this to neighbors.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By SterlingR on 05/11/2019 12:04 PM

So we would have to go through the process of placing a lien and (if we wanted to collect) go through foreclosure. I don't know if I or other members are up to doing this to neighbors.

I understand that. But on the flip side, this means that your recalcitrant neighbors are putting you and the rest of the neighbors at legal and financial risk. If you're OK with that, then so be it.

(Quote: "I go after deadbeats, they get mad. Deadbeats don't pay their share, I get mad. D@mn sight better they get mad.")

RoyalP
Posts: 1,104

Posted:

To the OP:

NO, they are not void, ie. they are still valid and still bind the land.

SterlingR (California)
Posts: 8

Posted:

Thanks for everyone's input. After some more review of the CC&Rs it appears we have a Property Owners Association (POA), not a HOA (I don't think that makes any practical difference).

I have another question. When the CC&Rs were drafted one of the parcel owners refused to participate so his parcel is not included in the POA. However, he uses the road system. Would the POA have any legal recourse to collect road maintenance fees from a non-POA member?

Thanks

RichardP13 (California)
Posts: 3,868

Posted:

If a delinquent owner refuses to pay their HOA assessments, can you deny them access to the gate to the community or the roads to their homes, NO. Likewise, you can't deny them access to the road system to their house.

SterlingR (California)
Posts: 8

Posted:

I wasn't thinking denying them access to the roads.
I'm just trying understand if there is any legal recourse or are they legally allowed to use the roads without paying their fair share of maintenance?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By SterlingR on 05/12/2019 11:04 AM
I wasn't thinking denying them access to the roads.
I'm just trying understand if there is any legal recourse or are they legally allowed to use the roads without paying their fair share of maintenance?

While I do not know how they "stayed" out of the association, them paying their fair share for road maintenance is something that should be legally looked at. I expect you will need an attorney to re-establish the association so maybe this is something the attorney can look at.

I say you will need an attorney if for no other reason than if you try to activate the association by yourself, you are going to be considered by some to be the "crazy" that lives down the road and you will be ignored. You need some "legal weight" behind what you want to do.

SterlingR (California)
Posts: 8

Posted:

I'm not going to try to invoke the "Nuclear Option" on my own. My approach would be as follows:

1) Determine if there is a high probability that the CC&Rs are valid without hiring an attorney. If I can't do this then this is where I stop pursuing the POA.

2) Discuss getting the road repairs done with the parcel owners. If they all agree to pay their fair share then the POA idea gets tabled for the time being.

3) If all of the parcel owners don't agree to pay their fair share then I will discuss having a POA meeting with some of the more reasonable parcel owners. If I can get 4 others (50% including me) to agree we would send out notices and have our first meeting as outlined in the CC&Rs.

4) Send out notices to all of the parcel owners that that their annual maintenance fee is due.

5) If one or more parcel owners refuses to pay the fees on the basis that they believe the CC&Rs are invalid then we would convene another meeting to see if we want to use the fees we've collected to hire an attorney to evaluate our position that the CC&Rs are valid. If confirmed by an attorney we would send out the information to all of the parcel owners.

6) Convene another POA meeting to pursue fee collection per the CC&Rs if any parcel owners still refuse to pay the fees.

SueW6 (Michigan)
Posts: 814

Posted:

Do you assume that the Annual Reports to the state were never filed all this time?

SterlingR (California)
Posts: 8

Posted:

The POA would have been unincorporated per the CC&Rs. Does an unincorporated POA need to file with the state? Is there an easy way to search to see if it did a filing?
Thanks

SueW6 (Michigan)
Posts: 814

Posted:

WHO filed the CCRs you talked about in your original post?

To check on a corporate status, google CA. Sec of State and do a search. The developer had to turn it over to “something”. That may or may not be a corporation.

SterlingR (California)
Posts: 8

Posted:

Quote:

Posted By SueW6 on 05/12/2019 4:40 PM
WHO filed the CCRs you talked about in your original post?

To check on a corporate status, google CA. Sec of State and do a search. The developer had to turn it over to “something”. That may or may not be a corporation.

My understanding of how the CC&Rs were filed and how we got to where we are is as follows:

1) Four parcel owners wanted to split their land (no houses) into 10 parcels. The county required the owners to file CC&Rs if the parcels were to be split (which they did).

2) A separate home owner that used the road system did not want to be included in the CC&Rs so he wasn't included. There was no way to compel him and I suspect the land owners didn't care anyway.

3) The 10 parcels were eventually sold off and people started to build or put up manufactured homes (there is currently only one parcel left that is bare land). The road system was gravel roads at that time. The roads were maintained by whoever felt like doing maintenance. Most of the original parcel buyers didn't want CC&Rs and never held any POA meetings.

4) Some of the parcels are close to a school. We live in an area of naturally occurring asbestos. At one point in time the state/county was concerned about airborne naturally occurring asbestos. There was an effort to reduce airborne asbestos around schools. The state/county put a single layer of chip seal on the road section adjacent to the school that all parcel owners use. That section is starting to degrade. Some of the parcel owners (me included) would like to keep that section of road maintained. Some of the other sections (not chip sealed) haven't been maintained and require a four wheel drive to get through. Some of those owners are less enthusiastic about having a formal POA.

I did a search on the California Secretary of State website and nothing under the name of our POA came up.

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